Criteria: The Uniform Guidance (2CFR 200.514) requires the auditor to obtain sufficient appropriate audit evidence to express an opinion on compliance for each major federal program. Condtion: The Uniform Guidance was unable to obtain sufficient appropriate audit evidence to express an opinion on the Distric'ts compliance with the applicable requirements for the major federal program(s) because a disclaimer of opinion was issured on the financial statements because the District did not maintain certain customary accounting records and supporting documents for various transactions. Cause: The scope limitation resulted from inadequate recordkeeping and the inability to provide necessary supporting documentation. Effect: As a result, the auditor was unable to determine whether the District complied with the applicable federal program requirements, and a disclaimer of opinion was issued on compliance for the affected program(s).
The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department of Transportation (Department) in the previous year and has not been remediated as of June 30, 2025 because the original implementation date provided by the Department was in a subsequent fiscal year. This complete finding and recommendation can be found within the original report and the complete recommendation can be found within Section IV: Disposition of Prior Audit Recommendations of this report. Finding 2024-058 Compliance with Subrecipient Monitoring for the Formula Grants for Rural Areas and Tribal Transit Program, Highway Safety Cluster, and SLFRF The Department receives federal grant funds directly from the federal government for the Formula Grants for Rural Areas and Tribal Transit Program, Highway Safety Cluster, and the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program and then subgrants, or passes through, a portion of the funds to cities and counties and other organizations that are considered to be either a subrecipient or a contractor. For Fiscal Year 2024, the Department had the following transactions that were subject to subrecipient monitoring testing: • Formula Grants for Rural Areas and Tribal Transit Program – 783 subrecipient transactions totaling $23,075,270. • Highway Safety Cluster – 829 subrecipient transactions totaling $5,669,865. • SLFRF – 232 subrecipient transactions totaling $38,321,493. For the SLFRF program, Intergovernmental Agreements are executed between the Department and subrecipients to communicate all relevant federal award information. For both the Formula Grants for Rural Areas and Tribal Transit Program and Highway Safety Cluster, Subaward Agreements (subawards) are executed between the Department and subrecipients to communicate all relevant federal award information. Intergovernmental Agreements and subawards are signed by authorized State personnel, generally the State Controller and the Department’s Chief Engineer. The Department includes a “Subrecipient Risk Assessment” tool with its Intergovernmental Agreements or subawards, which must be completed by Department staff prior to making the award. The Department’s subrecipient monitoring procedures are dependent on the assessed risk level noted in the Subrecipient Risk Assessment tool. Federal regulations [2 CFR Part 200 Section F] state that a non-federal entity that expends $1,000,000 or more in federal awards during the non-federal entity’s fiscal year must have a Single Audit conducted in accordance with 2 CFR 200.514. The Department’s Internal Audit Division staff tracks and receives Single Audit reports from its subrecipients. As part of the Department’s monitoring procedures, the Internal Audit Division personnel complete a “Single Audit Report Review Summary” form to show they reviewed the subrecipient’s Single Audit report, summarized any findings, and concluded on any risks presented to the Department and any related future actions to be taken. The form is signed by a Department preparer and a Department reviewer. For those subrecipients not required to file a Single Audit, an “Audit Division Single Audit Certification Form” must still be submitted by the subrecipients to the Department. These forms note that the entity was exempt from a Single Audit. What was the purpose of our audit work and what work was performed? The purpose of our audit work was to determine if the Department complied with federal requirements for subrecipient monitoring during Fiscal Year 2024 for the Formula Grants for Rural Areas and Tribal Transit Program, Highway Safety Cluster, and the SLFRF program and to determine whether the Department had adequate internal controls over subrecipient monitoring. As part of our audit work, we reviewed the Department’s internal controls over compliance for subrecipient monitoring and tested the Department’s compliance with federal subrecipient monitoring requirements. Specifically, we performed the following testwork related to each of the following federal programs: • Formula Grants for Rural Areas and Tribal Transit Program—We selected and reviewed a random sample of 40 subrecipient payment transactions. We reviewed subawards, amendments, and other supporting documentation provided by the Department. • Highway Safety Cluster—We selected and reviewed a random sample of 40 subrecipient payment transactions. We reviewed subawards, amendments, and other supporting documentation provided by the Department. • SLFRF—We selected and reviewed a random sample of 29 subrecipient payment transactions. We reviewed Intergovernmental Agreements, amendments, and other supporting documentation provided by the Department. How were the results of the audit work measured? Our audit work was designed to measure the Department’s compliance with the following criteria: • Federal regulation [2 CFR 200.303] states that the Department, as a federal grant recipient, must “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” • Federal regulation [2 CFR 200.332 (a)(1)] states that the Department’s subawards must clearly identify certain information, including but not limited to, the ALN, the Federal Award Date, and the FAIN. • Federal regulation [2 CFR 200.331] states that a pass-through entity, in this case the Department, must make case-by-case determinations as to whether each agreement it makes for the disbursement of federal program funds represents a payment of funds to a subrecipient or a contractor, depending on the role the entity plays. What problems did the audit work identify? We determined that the Department did not fully comply with subrecipient monitoring requirements during Fiscal Year 2024. Specifically, we noted the following: • Formula Grants for Rural Areas and Tribal Transit Program o For 10 of 40 (25 percent) subrecipient payment transactions selected for testing, we determined the subaward documents did not contain the federal award date in the subaward agreement, as required. The 10 transactions totaled $7,432,248 in subrecipient awards. • Highway Safety Cluster o For 1 of 40 (3 percent) subrecipient payment transactions selected for testing, we determined that the subrecipient should have been classified as a contractor, not a subrecipient. The transaction totaled $75,325. The Department had not made an adjusting entry in CORE to reclassify the transaction and correct this error by the end of our audit testwork. o For 5 of 40 (13 percent) subrecipient payment transactions selected for testing, we determined the subaward documents did not contain the federal award date in the subaward agreement. The 5 transactions totaled $25,100 in subrecipient awards. • SLFRF o For 2 of 29 (7 percent) subrecipient payment transactions selected for testing, we determined that the Intergovernmental Agreement did not include the FAIN and Federal Award Dates. The 2 transactions totaled $3,277,779 in subrecipient awards. o For 1 of 29 (3 percent) subrecipient payment transactions selected for testing, we determined the transaction did not include the ALN. This transaction totaled $1,851,279 in subrecipient awards. Why did these problems occur? The Department’s procedures and internal controls were not sufficient to ensure that Intergovernmental Agreements and subawards included all the required information to be included in the subaward, and internal controls did not prevent or detect errors. Department staff were not aware that this information was needed for the subaward to be in compliance with federal regulations. In some situations, the FAIN was only provided to the Department from the U.S. Department of Transportation subsequent to when the subaward was made. In these instances, the Department was not aware that they were required to provide the FAIN to their subrecipients once it was determined by the U.S. Department of Transportation. The Department’s procedures and internal controls were not sufficient to ensure that payments were properly classified as general disbursements or subrecipient payments, and internal controls did not prevent or detect errors. Department staff lacked the appropriate knowledge of the difference in contractors and subrecipients to ensure the proper classification of expenditures. The Department’s reviewers did not complete a sufficient review of the expense classifications to be able to identify the misclassification and propose a subsequent correction. Why do these problems matter? Based on the issues we identified, the Department is out of compliance with federal subrecipient requirements and could face sanctions or other penalties. In addition, by failing to properly report the required federal grant award information at the time of subaward issuance, subrecipients may be uninformed about what funding the subaward related to. This could result in misclassification of subaward information on the subrecipients’ Schedules of Expenditures of Federal Awards (SEFA) and the subrecipient may not know what federal requirements they need to follow as part of receiving the federal award funds. The Department’s improper classification of expenses as general disbursements versus subrecipient payments could lead to misstatements in the amounts reported on the SEFA, both for the State as a whole and at the subrecipient level. See "Schedule of Findings and Questioned Costs" for chart/table. Recommendation 2024-058 The Department of Transportation (Department) should strengthen its internal controls over and ensure that it complies with federal subrecipient monitoring requirements for the Formula Grants for Rural Areas and Tribal Transit Program, the Highway Safety Cluster, and the Coronavirus State and Local Fiscal Recovery Funds. Specifically, the Department should ensure that all required information is included in subawards or intergovernmental agreements or provide amendments to the subawards or intergovernmental once the Department receives the necessary information from the federal government, and that Department staff are sufficiently aware of the difference in subrecipients and contractors and properly classify general disbursements versus subrecipient payments. Response Department of Transportation Agree Implementation Date: June 2026 Department will strengthen controls to ensure that the required award information is provided, once available. Certain information such as Federal Award Identification Number and Federal Transit Administration and National Highway Traffic Safety Administration award date are not available at the time of contracting CDOT is working on a process to provide this information, once it is available in a publicly available format on CDOT’s website or on a subrecipient facing grant management site. We will add a note to the contract explaining where the information will be posted on our site when it becomes available. The Department will also identify staff requiring additional training on classification and coding for contractors vs. subrecipients.
Program: AL 84.010 – Title I Grants to Local Educational Agencies – Subrecipient Monitoring Grant Number & Year: All open, including S010A230027, FFY 2024; S010A240027, FFY 2025 Federal Grantor Agency: U.S. Department of Education Criteria: 2 CFR § 200.332 (January 1, 2024, and January 1, 2025) requires a pass-through entity to monitor the activities of subrecipients as necessary to ensure that subaward funds are used for authorized purposes in compliance with Federal regulations, track Single audit requirements and verify that a Single audit was obtained if required, review financial and performance reports of the subrecipient, and follow-up and resolve all audit finding pertaining to the Federal award. 2 CFR § 200.501 (January 1, 2024), as it applies to audit requirements of entities for fiscal years ended prior to October 1, 2025, states the following: (a) Audit required. A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. (b) Single audit. A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514[.] Good internal control requires policies and procedures to ensure that subrecipient monitoring is sufficiently designed and performed regularly to provide assurance that grant funds are used in accordance with Federal requirements. This includes maintaining adequate documentation to support fiscal monitoring performed for Federal programs and documentation of follow-up procedures performed when subrecipients are expected to have Federal expenditures exceeding Federal audit requirement thresholds but do not receive a Federal Single audit. Condition: The Agency’s procedures can be improved to ensure that: • Subrecipients’ uses of funds were monitored to ensure compliance with all Federal and grant requirements. • Subrecipients obtain Single audits mandated by Federal requirements. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The Agency disbursed $106,911,261 of Title I Federal funds to 242 different subrecipients during the fiscal year ended June 30, 2025. We noted the following during our subrecipient monitoring testing. Insufficient Subrecipient Fiscal Monitoring Procedures Per its fiscal monitoring procedures and schedule, the Agency is to perform fiscal monitoring of the various subrecipients on a three-year rotational cycle. These procedures include reviewing subrecipient expenditures claimed for subgrant awards applicable for the period the Agency is monitoring. We randomly selected 25 subrecipients to review the fiscal monitoring documentation provided by the Agency. We noted the following for two subrecipients: • For one subrecipient tested, the fiscal monitoring was last completed in August 2021 for the 2019–2020 program year, during which no compliance errors were noted. Per the Agency, fiscal monitoring was scheduled to be performed again in calendar year 2023 for the 2022–2023 program year; however, this monitoring was never performed. As of June 30, 2025, no fiscal monitoring review had been initiated. Additionally, during a review of reimbursement requests submitted during the fiscal year, we noted some questionable expenditures, including $3,027 spent on hotels at Disney’s Animal Kingdom in Florida, which were reportedly in association with a teaching conference held eight miles away at the Orlando World Center Marriott. The daily rate charged by the hotel was $299 per night; the Government Services Administration’s rate for lodging in Orlando for June 2024 was $140 per night. We also noted that a possible travel expenditure of $955 was paid to Holiday Express for which no support was obtained. These types of higher-risk expenditures further highlight the need for subrecipient monitoring to be performed regularly. • For another subrecipient, the Agency last completed its fiscal monitoring in August 2025 for the 2023–2024 program year. However, monitoring documentation was not sufficient to determine what monitoring procedures were completed or whether that monitoring was adequate. While we did observe various records on file, including employee time and effort logs and invoices supporting supplies and service costs, the audit worksheet that the Agency is supposed to complete for all fiscal monitoring performed did not indicate what items were reviewed or the conclusion regarding those items. We did observe an exit letter issued by the Agency in August 2025, which indicated that no issues were found. Single Audit Tracking Procedures During our review of subrecipient audits and Single audit tracking procedures implemented by the Agency, we noted that, for one subrecipient tested, the Agency had identified the subrecipient as having more than $750,000 in Federal expenditures for the subrecipient’s fiscal year ended August 31, 2024, but noted that no Single audit was required. After we inquired with the Agency, no documentation could be provided to support that the Agency performed any follow-up procedures to verify that a Single audit was not required. Cause: Inadequate procedures to ensure that subrecipients complied with all Federal and grant requirements or to ensure that subrecipients obtained Single audits when required. Effect: Without adequate monitoring and review procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency strengthen procedures to ensure that subrecipient monitoring is properly designed to ensure compliance with all Federal and grant requirements and that documentation is maintained to support procedures performed. We also recommend the Agency strengthen procedures to ensure that subrecipient Single audit requirements are properly tracked, and all Single audits are reviewed in a timely manner. Management Response: NDE agrees with this finding.
2025-003: Noncompliance related to SEFA, FAC Reports, and Single Audits for fiscal years ended June 30, 2022, 2023, and 2024 Federal Assistance Listing Number: 10.553, 10.555, 10.559, 84.041, 84.010A, 84.060, 84.358B, 84.365, 84.367, 84.323, 84.424A, 84.425D, 84.425U, 84.048, 94.243, and others potentially unknown in prior years. Federal Award Year(s): Multiple Program Title(s): Multiple Name of Federal Agency(ies): U.S. Department of Agriculture, U.S. Department of Education, and U.S. Department of Health and Human Services Name of Pass-Through Entity(ies): Various, including the Colorado Department of Education, Colorado Community Colleges System, and Colorado Department of Human Services COVID-19 Program(s): Yes Criteria: Section 200.510b of the Code of Federal Regulations Title 2, Subtitle A, Chapter II, Part 200, Subpart F (also known as 2CFR200) states that the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with section 200.502. In addition, in accordance with Section 200.501(a) and (b) of the 2CFR200, a non-Federal entity that expended $750,000 or more in Federal awards during the non-Federal entity’s fiscal year (2022, 2023, and 2024) must have a Single Audit conducted on major Federal programs in accordance with 200.514. The FAC report is required to be submitted the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Condition: The District has not prepared a schedule of expenditures of federal awards (SEFA), did not have an auditor conduct Single Audits on major Federal programs, and failed to submit the required report to the Federal Audit Clearinghouse (FAC.gov) for the fiscal years ended June 30, 2022, 2023, and 2024 (prior three fiscal years). The FAC report is required to be submitted the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The District lacked internal controls and awareness of the requirements noted above to prepare the SEFA, conduct an annual Single Audit, and submit an annual FAC.gov report in a timely manner. Effect: The District was noncompliant with multiple requirements of the 2CFR200 for fiscal years ended June 30, 2022, 2023, and 2024. This noncompliance impacts multiple federal grant programs and may impact future federal awards and require increased oversight, heightened risk classification, and/or special monitoring, if imposed by the grantor. The District had conversations with the Colorado Department of Education and obtain an understanding of the impacts of this noncompliance. Additional requirements may be imposed on the District by grantors as a result of this noncompliance and backlog of Single Audits on major Federal programs. Repeat Finding: No. Questioned Costs: Questioned costs are not known, because the Single Audits on major Federal programs for fiscal years ended June 30, 2022, 2023, and 2024, was not performed. However, there is likelihood and potential for questioned costs or fraud that has not been identified without the completion of the Single Audits on major Federal programs. Recommendation: The District must discuss with the grantors regarding this noncompliance and potential remedies, including the backlog of Single Audits on major Federal programs for fiscal years ended June 30, 2022, 2023, and 2024. In the future, we highly recommend that the District maintain proper internal controls and accurate grant records to prepare an accurate SEFA that will allow auditors to perform the Single Audits on major Federal programs, and submit the FAC report in a timely manner. We also recommend that the District evaluate the options to remedy the backlog of Single Audits and internally determine the best course of action for the District.
Condition During our audit of the School Board’s financial statements for the year ended June 30, 2025, we encountered circumstances that imposed pervasive limitations on the scope of our audit. Specifically: • We were unable to obtain sufficient appropriate audit evidence regarding significant financial statement balances, transactions, and disclosures. • Accounting records and supporting documentation necessary to perform audit procedures were incomplete, unavailable, or unreliable. • Management representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations. • These conditions, combined with the risk that management could override internal controls, further limited our ability to obtain evidence that financial reporting was complete and accurate. In addition, these same conditions prevented us from performing required audit procedures over the School Board’s federal programs, including testing of internal control over compliance and compliance with applicable federal statutes, regulations, and terms and conditions of federal awards. As a result, we were unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each major federal program. Criteria Uniform Guidance (2 CFR §200.303 and §200.514) requires non-federal entities to establish and maintain effective internal control over federal programs and to provide auditors with access to records and personnel necessary to perform a Single Audit. Uniform Guidance §200.516 requires auditors to report material weaknesses and noncompliance when identified. Cause The conditions described above resulted from inadequate recordkeeping and documentation practices, deficiencies in internal control over financial reporting, and management actions and behaviors that restricted the auditor’s ability to obtain reliable audit evidence and representations. These conditions directly impaired the auditor’s ability to perform planned audit procedures and obtain sufficient appropriate audit evidence. These conditions affected both financial reporting and compliance with federal program requirements. Effect Because of these pervasive limitations and the risk of management override, we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. The potential effects on the financial statements are both material and pervasive, and therefore we issued a disclaimer of opinion on the School Board’s financial statements for the year ended June 30, 2025. For the same reasons, we were also unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each of the School Board’s major federal programs and on internal control over compliance. Accordingly, we disclaimed an opinion on compliance for each major federal program under the Single Audit. Context Questioned costs could not be determined due to the disclaimer of opinion. Recommendation We recommend that the School Board take immediate action to strengthen its internal control environment. Specifically, management should: • Ensure that all accounting records and supporting documentation are complete, accurate, and readily available. • Enforce oversight of financial reporting and internal control procedures. • Promote transparency, accountability, and cooperation with auditors to facilitate future audits. • Implement measures to mitigate the risk of management override, including additional supervisory review, approval requirements, and segregation of duties. • Ensure compliance documentation for federal programs is complete, accurate, and available for audit. Views of Responsible Officials and Planned Corrective Action A. OBJECTION On December 29, 2025, following LPSB’s submission of its Response to the Draft Findings of Kolder, Slaven, and Company, LLC (“KS&C”) relating to its 2024-2025 Annual Audit, LPSB received two additional findings characterized as Disclaimers of Opinion. The issuance of these post-response Disclaimers of Opinion regarding the findings highlights KS&C’s apparent lack of objectivity and its failure to adhere to generally accepted government auditing standards in conducting the 24-25 audit. A Disclaimer of Opinion “is expressed when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.”1 According to LLA, “a local auditee that provides for an audit report with a disclaimer of opinion” is regarded as being in noncompliance with its reporting requirements to LLA under the audit law (Louisiana Revised Statute 24:513). LLA further expects the CPA to include in such a report a finding that provides a full explanation for the disclaimer of opinion.2 The two supplemental responses provided are, however, substantially lacking the “full explanation” mandated by the Legislative Auditors for the serious allegations being presented by KS&C. As with its other findings, these recent findings fail to cite any specific conditions present during the audit period that would have precluded KS&C from forming a conclusion. Therefore, as with the original findings, LPSB, on January 6, 2026, again requested that KS&C provide supporting evidence for its claim that it was unable to obtain “evidence regarding significant financial statement balances, transactions, and disclosures.” KS&C responded by stating that these new findings were based on Finding 16 - Invoices Paid Without Sufficient Supporting Detail (IC & C), Finding 26 - Management Override of Established Internal Controls (IC), Finding 31 - Unsupported Experience-Based Pay Increases (IC), and other undisclosed matters. Notably, none of these specific findings are instances where KS&C was prevented from forming a conclusion. To the contrary, the original findings identified by KS&C reflect otherwise. For instance, in Finding 16, KS&C notes it “tested 539 and identified 213 in which invoices were paid without sufficient documentation.” Despite KS&C’s assertions, LPSB has at no point failed to provide information to KS&C upon request (see Corrective Action sections below). In fact, KS&C issued 33 Findings, each purportedly substantiated by documentation. As stated in LPSB’s Response, a request was made by LPSB for KS&C to produce the referenced specific supporting documentation. However, KS&C declined to provide the documentation. Auditing standards stipulate: “Auditors should document supervisory review, before the report release date, of the evidence that supports the findings and conclusions contained in the audit report.”3 They further require: “Auditors should document any departures from the GAGAS requirements and the effect on the audit and on the auditors’ conclusions when the audit is not in compliance with applicable GAGAS requirements because of law, regulation, scope limitations, restrictions on access to records, or other issues affecting the audit.”4 Despite LPSB, in its Response and communications prior thereto pointing out erroneous references to the law and facts, KS&C refused to modify its findings. Instead, it introduced these two ambiguous Disclaimers of Opinion, alleging that LPSB failed to provide necessary information for KS&C to reach a conclusion. However, a cursory review of its original findings clearly reflect that KS&C did reach conclusions, which they assert were based upon conditions found during their investigation. Which is it? Are KS&C’s findings supported or not? KS&C’s ex post Disclaimers of Opinion not only misrepresent LPSB’s cooperation and full disclosure of information, but they are also predicated upon the unfounded assertion that LPSB’s “representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations.” After 33 years of engagement with LPSB audits, KS&C has now made the unwarranted claim that LPSB’s representations are unreliable, without pointing to a specific instance of unreliability. Ironically, it is the auditor’s own representations that are demonstrated to be unreliable, as evidenced by the submission of these two vague and contradictory Disclaimers of Opinion. “[A] CPA cannot enter into the engagement with a pre-conceived notion that the local auditee is doing everything wrong. Going into an engagement with [this] attitude impairs the independence of the CPA firm.” The two findings, submitted after LPSB responded to its original findings, do not meet the standards set forth in the Louisiana Governmental Audit Guide. They contradict the original findings, misrepresent LPSB’s cooperation throughout the audit, insert slanderous statements as to the reliability of LPSB’s representations, and fail to provide a full explanation for the disclaimer of opinion. KS&C should remove these findings from its report. 1 LGAG 400-1160, Types of Auditor’s Opinions 2 LGAG 400-1160, Types of Auditor’s Opinions 3 GAO-24, Sections 6.31 (emphasis added) 4 GAO-24, Sections 6.32 B. CORRECTIVE ACTION Prior to the financial audit, Lafayette Parish School Board (LPSB) staff prepared reports and documentation for at least 185 requests that were made by the external auditors. These requests consisted of, but were not limited to, all General Ledger data and information on all Major and Non Major Funds (i.e. General Fund, Construction Funds, Debt Service Funds, and Special Revenue funds), worksheets, personnel records, copies of checks, copies of invoices, grant reimbursement requests, expenditure detail reports, capital asset data and reports, accounts payable data and reports, the type of computer equipment used (including the software and operating systems), construction related documents, copies of contracts, insurance invoices, schedules of judgments and agreements, check registers, calendars, securities pledged, accounts payable details, financial statements, schedule of construction contracts, retirement reports, listing of new hires, purchase orders, check requests, financial reconciliations, sales tax reports and documents, other insurance related documents, insurance policies, monitoring reports, AFR report, arbitrage documentation, copies of deposits receipts, copies of budgets, outstanding checks, revenue reports, expenditure reports, and balance sheet reports. Under the Department of Education agreed upon procedures audit, LPSB staff provided Class size data, PEP data and a user guide. Under the Statewide Agreed Upon procedure, LPSB staff provided proof of required trainings such as ethics, bond insurance policies, list of all bank accounts, a listing of employees, officials employed during the year, and a list of deposit and collection sites. Other requests from our external auditors may come via email throughout the audit process and responses are provided likewise. All of the items listed above, and other items that were not listed above, are routinely provided each year. For several decades this has been the standard and nothing has changed in terms of provided supporting documentation within this particular audit. Internal controls have been in place for many decades. The external auditors have been reviewing, studying and auditing our internal controls for three decades. Over the years, LPSB internal controls have been adjusted, strengthened or heighten to prevent operational deficiencies, fraud and/or non-compliance of which the auditors have contributed to its advancement. Substantially, there has been no change to internal controls as they are in place for a reason. Systematically, internal controls are planted and executed in various areas and departments for various functions and/or lawful requirements. The biggest threats to any organization are misappropriation or improper disbursement of funds. Neither have occurred, because internal controls such as the utilization of electronic requisitions and check request processes were in place to ensure goods and services were precured properly and vendor payments were substantiated. LPSB stands by its management representations that have been provided to the auditors. We acknowledge our responsibility for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In addition to supporting documentation, the external auditors had complete access to our financial software to ascertain the completeness and accuracy of our financial records. Auditor’s Response The School Board’s response to this finding contains statements and characterizations that are inconsistent with the audit evidence obtained and the procedures performed. The auditor stands by the condition, criteria, cause, and effect as presented in the finding, which are based on documentation, observations, interviews, and other information available during the audit. Management’s response has not resulted in any change to the finding or the auditor’s conclusions.
Condition During our audit of the School Board’s financial statements for the year ended June 30, 2025, we encountered circumstances that imposed pervasive limitations on the scope of our audit. Specifically: • We were unable to obtain sufficient appropriate audit evidence regarding significant financial statement balances, transactions, and disclosures. • Accounting records and supporting documentation necessary to perform audit procedures were incomplete, unavailable, or unreliable. • Management representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations. • These conditions, combined with the risk that management could override internal controls, further limited our ability to obtain evidence that financial reporting was complete and accurate. In addition, these same conditions prevented us from performing required audit procedures over the School Board’s federal programs, including testing of internal control over compliance and compliance with applicable federal statutes, regulations, and terms and conditions of federal awards. As a result, we were unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each major federal program. Criteria Uniform Guidance (2 CFR §200.303 and §200.514) requires non-federal entities to establish and maintain effective internal control over federal programs and to provide auditors with access to records and personnel necessary to perform a Single Audit. Uniform Guidance §200.516 requires auditors to report material weaknesses and noncompliance when identified. Cause The conditions described above resulted from inadequate recordkeeping and documentation practices, deficiencies in internal control over financial reporting, and management actions and behaviors that restricted the auditor’s ability to obtain reliable audit evidence and representations. These conditions directly impaired the auditor’s ability to perform planned audit procedures and obtain sufficient appropriate audit evidence. These conditions affected both financial reporting and compliance with federal program requirements. Effect Because of these pervasive limitations and the risk of management override, we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. The potential effects on the financial statements are both material and pervasive, and therefore we issued a disclaimer of opinion on the School Board’s financial statements for the year ended June 30, 2025. For the same reasons, we were also unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each of the School Board’s major federal programs and on internal control over compliance. Accordingly, we disclaimed an opinion on compliance for each major federal program under the Single Audit. Context Questioned costs could not be determined due to the disclaimer of opinion. Recommendation We recommend that the School Board take immediate action to strengthen its internal control environment. Specifically, management should: • Ensure that all accounting records and supporting documentation are complete, accurate, and readily available. • Enforce oversight of financial reporting and internal control procedures. • Promote transparency, accountability, and cooperation with auditors to facilitate future audits. • Implement measures to mitigate the risk of management override, including additional supervisory review, approval requirements, and segregation of duties. • Ensure compliance documentation for federal programs is complete, accurate, and available for audit. Views of Responsible Officials and Planned Corrective Action A. OBJECTION On December 29, 2025, following LPSB’s submission of its Response to the Draft Findings of Kolder, Slaven, and Company, LLC (“KS&C”) relating to its 2024-2025 Annual Audit, LPSB received two additional findings characterized as Disclaimers of Opinion. The issuance of these post-response Disclaimers of Opinion regarding the findings highlights KS&C’s apparent lack of objectivity and its failure to adhere to generally accepted government auditing standards in conducting the 24-25 audit. A Disclaimer of Opinion “is expressed when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.”1 According to LLA, “a local auditee that provides for an audit report with a disclaimer of opinion” is regarded as being in noncompliance with its reporting requirements to LLA under the audit law (Louisiana Revised Statute 24:513). LLA further expects the CPA to include in such a report a finding that provides a full explanation for the disclaimer of opinion.2 The two supplemental responses provided are, however, substantially lacking the “full explanation” mandated by the Legislative Auditors for the serious allegations being presented by KS&C. As with its other findings, these recent findings fail to cite any specific conditions present during the audit period that would have precluded KS&C from forming a conclusion. Therefore, as with the original findings, LPSB, on January 6, 2026, again requested that KS&C provide supporting evidence for its claim that it was unable to obtain “evidence regarding significant financial statement balances, transactions, and disclosures.” KS&C responded by stating that these new findings were based on Finding 16 - Invoices Paid Without Sufficient Supporting Detail (IC & C), Finding 26 - Management Override of Established Internal Controls (IC), Finding 31 - Unsupported Experience-Based Pay Increases (IC), and other undisclosed matters. Notably, none of these specific findings are instances where KS&C was prevented from forming a conclusion. To the contrary, the original findings identified by KS&C reflect otherwise. For instance, in Finding 16, KS&C notes it “tested 539 and identified 213 in which invoices were paid without sufficient documentation.” Despite KS&C’s assertions, LPSB has at no point failed to provide information to KS&C upon request (see Corrective Action sections below). In fact, KS&C issued 33 Findings, each purportedly substantiated by documentation. As stated in LPSB’s Response, a request was made by LPSB for KS&C to produce the referenced specific supporting documentation. However, KS&C declined to provide the documentation. Auditing standards stipulate: “Auditors should document supervisory review, before the report release date, of the evidence that supports the findings and conclusions contained in the audit report.”3 They further require: “Auditors should document any departures from the GAGAS requirements and the effect on the audit and on the auditors’ conclusions when the audit is not in compliance with applicable GAGAS requirements because of law, regulation, scope limitations, restrictions on access to records, or other issues affecting the audit.”4 Despite LPSB, in its Response and communications prior thereto pointing out erroneous references to the law and facts, KS&C refused to modify its findings. Instead, it introduced these two ambiguous Disclaimers of Opinion, alleging that LPSB failed to provide necessary information for KS&C to reach a conclusion. However, a cursory review of its original findings clearly reflect that KS&C did reach conclusions, which they assert were based upon conditions found during their investigation. Which is it? Are KS&C’s findings supported or not? KS&C’s ex post Disclaimers of Opinion not only misrepresent LPSB’s cooperation and full disclosure of information, but they are also predicated upon the unfounded assertion that LPSB’s “representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations.” After 33 years of engagement with LPSB audits, KS&C has now made the unwarranted claim that LPSB’s representations are unreliable, without pointing to a specific instance of unreliability. Ironically, it is the auditor’s own representations that are demonstrated to be unreliable, as evidenced by the submission of these two vague and contradictory Disclaimers of Opinion. “[A] CPA cannot enter into the engagement with a pre-conceived notion that the local auditee is doing everything wrong. Going into an engagement with [this] attitude impairs the independence of the CPA firm.” The two findings, submitted after LPSB responded to its original findings, do not meet the standards set forth in the Louisiana Governmental Audit Guide. They contradict the original findings, misrepresent LPSB’s cooperation throughout the audit, insert slanderous statements as to the reliability of LPSB’s representations, and fail to provide a full explanation for the disclaimer of opinion. KS&C should remove these findings from its report. 1 LGAG 400-1160, Types of Auditor’s Opinions 2 LGAG 400-1160, Types of Auditor’s Opinions 3 GAO-24, Sections 6.31 (emphasis added) 4 GAO-24, Sections 6.32 B. CORRECTIVE ACTION Prior to the financial audit, Lafayette Parish School Board (LPSB) staff prepared reports and documentation for at least 185 requests that were made by the external auditors. These requests consisted of, but were not limited to, all General Ledger data and information on all Major and Non Major Funds (i.e. General Fund, Construction Funds, Debt Service Funds, and Special Revenue funds), worksheets, personnel records, copies of checks, copies of invoices, grant reimbursement requests, expenditure detail reports, capital asset data and reports, accounts payable data and reports, the type of computer equipment used (including the software and operating systems), construction related documents, copies of contracts, insurance invoices, schedules of judgments and agreements, check registers, calendars, securities pledged, accounts payable details, financial statements, schedule of construction contracts, retirement reports, listing of new hires, purchase orders, check requests, financial reconciliations, sales tax reports and documents, other insurance related documents, insurance policies, monitoring reports, AFR report, arbitrage documentation, copies of deposits receipts, copies of budgets, outstanding checks, revenue reports, expenditure reports, and balance sheet reports. Under the Department of Education agreed upon procedures audit, LPSB staff provided Class size data, PEP data and a user guide. Under the Statewide Agreed Upon procedure, LPSB staff provided proof of required trainings such as ethics, bond insurance policies, list of all bank accounts, a listing of employees, officials employed during the year, and a list of deposit and collection sites. Other requests from our external auditors may come via email throughout the audit process and responses are provided likewise. All of the items listed above, and other items that were not listed above, are routinely provided each year. For several decades this has been the standard and nothing has changed in terms of provided supporting documentation within this particular audit. Internal controls have been in place for many decades. The external auditors have been reviewing, studying and auditing our internal controls for three decades. Over the years, LPSB internal controls have been adjusted, strengthened or heighten to prevent operational deficiencies, fraud and/or non-compliance of which the auditors have contributed to its advancement. Substantially, there has been no change to internal controls as they are in place for a reason. Systematically, internal controls are planted and executed in various areas and departments for various functions and/or lawful requirements. The biggest threats to any organization are misappropriation or improper disbursement of funds. Neither have occurred, because internal controls such as the utilization of electronic requisitions and check request processes were in place to ensure goods and services were precured properly and vendor payments were substantiated. LPSB stands by its management representations that have been provided to the auditors. We acknowledge our responsibility for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In addition to supporting documentation, the external auditors had complete access to our financial software to ascertain the completeness and accuracy of our financial records. Auditor’s Response The School Board’s response to this finding contains statements and characterizations that are inconsistent with the audit evidence obtained and the procedures performed. The auditor stands by the condition, criteria, cause, and effect as presented in the finding, which are based on documentation, observations, interviews, and other information available during the audit. Management’s response has not resulted in any change to the finding or the auditor’s conclusions.
Information on Federal Program ‒ Grants to States for Medicaid (Assistance Listing Number 93.778) Criteria – Consistent with the requirements of 2 CFR 200.514, Subpart 3, L Reporting and consistent with the requirements of the subaward agreement, the University is required to submit compliance reporting to the grantor annually beginning in the year the funds were received. Condition – During our testing of this grant, we noted the following: The University did not submit the compliance reporting required under the subaward agreement. The grantor never provided the appropriate report templates so the University was unable to submit the necessary documentation. Cause – Management oversight and insufficient internal controls over grant compliance and lack of support from the grantor. Effect – The University was not in reporting compliance with subaward agreement, however, the funds were appropriately utilized within parameters of the grant agreement. Questioned Costs – None Context – The University never received the templates required for reporting and the grantor never requested the University submit the reporting. The University used the funds in compliance with the agreement but did not follow the full length of reporting requirements. Indication of a Repeat Finding – This is a new finding in 2025. Recommendation – We recommend the University ensure its internal controls, policies, and procedures are followed on a consistent basis regarding post award grant compliance and reporting. Views of Responsible Officials – See corrective action plan.
MANAGEMENT IS RESPONSIBLE FOR ESTABLISHING AND MAINTAINING AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS TO ENSURE COMPLIANCE WITH 2 CFR PART 200, SECTION 200.514(C) AND SUBPART E COST PRINCIPLES DOCUMENTATION OF INTERNAL CONTROLS SURROUNDING ALLOCATION OF NON-PAYROLL COSTS, IS A KEY COMPONENT OF EFFECTIVE INTERNAL CONTROL OVER COMPLIANCE. THE COALITION COULD NOT PROVIDE DOCUMENTATION OF REVIEW AND APPROVAL OF NON-PAYROLL EXPENSES ALLOCATED TO THE FEDERAL PROGRAMS THROUGH THE JOURNAL ENTRY PROCESS.
Program: ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Procurement and Suspension and Debarment Repeat Finding: Yes Condition: During our audit we noted that procurement documentation was not available to support the selection of a sole source vendor nor able to obtain documentation to support the Foundation entering into contractual agreements with vendors who were not debarred or suspended from doing business with the federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Per 2 CFR 200.318 General procurement: (b) The non-federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in this part. Per Uniform Guidance, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for procurement. Effect: If procurement were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that management develop and implement written procurement policies and procedures in accordance with Uniform Guidance, provide periodic training to program personnel, and establish a review process to ensure procurement activities comply with applicable federal requirements. We also recommend the Foundation follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
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.