Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Finding 2022-002: Internal Controls (Material Weakness) Criteria A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. Condition As noted in finding 2022-001, we noted a lack of evidence to support the operation of internal controls for the fiscal year. Cause The Organization has experienced growth over the past couple of years, however has not evaluated and updated internal controls. Effect The Organization lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested. Recommendation We recommend that the Organization institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required process, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process. Views of Responsible Officials The Organization agrees with the auditor's findings. We have already begun to make adjustments to record all grants ahead of time in Quickbooks and deduct funding as we spend from these areas to directly show grant balances and that the restricted funding is spent in compliance with the funding received. We will also provide these findings to a certified public accountant to make sure they are adhered to correctly and meet the requirements of both state and federal funding.
Finding 2022-002: Internal Controls (Material Weakness) Criteria A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. Condition As noted in finding 2022-001, we noted a lack of evidence to support the operation of internal controls for the fiscal year. Cause The Organization has experienced growth over the past couple of years, however has not evaluated and updated internal controls. Effect The Organization lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested. Recommendation We recommend that the Organization institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required process, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process. Views of Responsible Officials The Organization agrees with the auditor's findings. We have already begun to make adjustments to record all grants ahead of time in Quickbooks and deduct funding as we spend from these areas to directly show grant balances and that the restricted funding is spent in compliance with the funding received. We will also provide these findings to a certified public accountant to make sure they are adhered to correctly and meet the requirements of both state and federal funding.
Finding 2022-002: Internal Controls (Material Weakness) Criteria A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. Condition As noted in finding 2022-001, we noted a lack of evidence to support the operation of internal controls for the fiscal year. Cause The Organization has experienced growth over the past couple of years, however has not evaluated and updated internal controls. Effect The Organization lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested. Recommendation We recommend that the Organization institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required process, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process. Views of Responsible Officials The Organization agrees with the auditor's findings. We have already begun to make adjustments to record all grants ahead of time in Quickbooks and deduct funding as we spend from these areas to directly show grant balances and that the restricted funding is spent in compliance with the funding received. We will also provide these findings to a certified public accountant to make sure they are adhered to correctly and meet the requirements of both state and federal funding.
Program: AL 17.225 ? Unemployment Insurance ? Admin ? Special Tests & Provisions Grant Number & Year: UI-36202-21-60-A-31 grant period 1/1/2021 to 9/30/2022; UI-37991-22-60-A-31, grant period 1/1/2022 to 9/30/2023 Federal Grantor Agency: U.S. Department of Labor Criteria: Unemployment Insurance Program Letter (UIPL) 10-22 (January 21, 2022), Section 4.d., from the U.S. Department of Labor (USDOL) states the following, in relevant part: i. Required Engagement of UI Staff ? UI staff must be engaged in the administration of the RESEA program. This includes, but is not limited to: ? Participating in the planning, administration, and oversight of the RESEA program; * * * * ? Ensuring accurate data are provided in the RESEA-required reports[.] UIPL 10-22 also goes on to state, under section 4.d.v.B., the following: Performance reporting for FY 2022 consists of the ETA 9128, Reemployment and Eligibility Assessment Workload, and ETA 9129, Reemployment and Eligibility Assessments Outcomes; Office of Management and Budget (OMB) Control No. 1205-0456, expiration date 9/30/2022. . . . A state UI staff member must review these reports for accuracy each calendar quarter and prior to submission, in addition to being reviewed by the RESEA program lead (if a different staff member). The various grant agreements to which the State agreed state the following: In performing its responsibilities under this grant agreement, the awardee hereby certifies and assures that it will fully comply with all applicable Statute(s), and the following regulations and cost principles, including any subsequent amendments: Uniform Administrative Requirements, Cost Principles, and Audit Requirements: 2 CFR Part 200; Uniform Administrative Requirements, Cost Principles, and Audit Requirements[.] Additionally, per 2 CFR ? 2900.4 (January 1, 2022), the U.S. Department of Labor adopted the OMB Uniform Guidance as its policies and procedures for financial assistance administration. Per 2 CFR ? 200.514(c)(3) (January 1, 2022), we, as the auditors, must test controls. AICPA auditing standards require that, in designing and performing tests of controls, the auditor should obtain more persuasive audit evidence the greater the reliance the auditor places on the effectiveness of a control, and inquiry alone is not sufficient to test the operating effectiveness of controls. Condition: Documentation was not maintained to verify that Unemployment Insurance (UI) staff were reviewing all the quarterly Reemployment Services and Eligibility Assessments (RESEA) performance reports prior to submission. Repeat Finding: 2021-056 Questioned Costs: None Statistical Sample: No Context: The Agency has a process for a UI staff member and a RESEA staff member to review the quarterly RESEA performance reports prior to submission. However, documentation of UI staff?s review was not maintained for the following reports: ? 9128 report quarter ending 3/31/2022 ? 9129 report quarter ending 9/30/2021 ? 9129 report quarter ending 12/31/2021 ? 9129 report quarter ending 3/31/2022 Cause: The Agency?s UI staff did not document its review for all RESEA performance reports. Effect: When documentation is not maintained to support the review of RESEA performance reports, there is an increased risk that inaccurate reports will be submitted. Additionally, there is no evidence the Agency complied with Federal requirements to review the reports prior to submission. Recommendation: We recommend the Agency implement a documented review of the RESEA performance reports by UI staff to demonstrate such review was completed prior to the submission of the reports. Management Response: The process currently being used by NDOL is that UI staff submit the RESEA report. In the USDOL Final Determination for FY 2021, USDOL stated that: In response to the Initial Determination (ID), the SON stated they have moved their report submission to a UI Program Supervisor. The grantee?s UI Program Supervisor is responsible for submitting all Federal unemployment reports. Prior to submitting the report, the program supervisor reaches out to the impacted program supervisors to verify accuracy of the report. This is done via e-mail with a deadline response time provided. Specific to this report, verification is done through the above process with both UI and Reemployment Services supervisors prior to submission. Determination: Based on the above, ETA has determined the finding is corrected. APA Response: During fieldwork, we asked the Agency multiple times for documentation that the four reports referenced herein were reviewed by UI staff prior to being submitted, but no such support was provided for any of the reports.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Significant Deficiency Finding No. 2022-001 U.S. Department of Health and Human Services Child Support Enforcement Title IV-D Federal Assistance Listing Number 93.563 Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition We noted that the Department has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2022, within the stipulated nine months after the end of the audit period. Cause The Department did not adhere to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form due to the untimely completion of the previous year’s single audit. Effect The Department is not in compliance with the Uniform Guidance terms and conditions regarding the timely submission of the single audit report and Data Collection Form for the year ended June 30, 2022. Recommendation We recommend that the Department incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the timely submission of single audit reports and the Data Collection Form.
Condition: The Single Audit reporting package, as defined and required in 2 CRF 200.512 for fiscal year ended June 30, 2022, was not submitted timely. Context: Despite the Municipality’s best efforts to provide, on a timely basis, the information needed to complete the preparation and subsequent audit of their financial statements, the effects of the major disaster area declaration due to Hurricane Fiona delayed the submission of the Single Audit reporting package of the current year. Criteria: As per 2 CRF 200.512, the audit, data collection form, and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. However, for any 2022 submissions with fiscal periods ending between January 1, 2022, and October 31, 2022, the requirement stating that single audits are due to the Federal Audit Clearinghouse 30 days after receipt of the auditor’s report(s), is waived. These audits will be considered on time if they are submitted within nine months after their fiscal period end date. Cause: On September 18, 2022, Puerto Rico was declared a major disaster area due to the passage of Hurricane Fiona. As a result of this declaration, the OMB granted a six-month extension for all single audits that cover recipients in Puerto Rico and have due dates between September 18, 2022 and December 31, 2022. For June 30, 2021, the extended due date was March 31, 2023. The Municipality benefited from this extension and submitted their financial statements and data collection form on March 17, 2023. The due date of the current fiscal year, June 30, 2022 however was not extended and was also due on March 31, 2023. This situation prevented the timely submission of the current fiscal year Single Audit reporting package. Effect: Because of the situation described above, the Municipality did not comply with the report submission requirement since the audit was not submitted within nine months after their fiscal period end date. Auditor’s recommendation: Management should continue to fulfill their auditee responsibilities as stated in 2 CRF 200.508 which among other things, require management to prepare appropriate financial statements and provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit to ensure that subsequent financial reporting packages are submitted timely. Views of Responsible officials and corrective actions: The Municipality Administration is committed to complying with all submissions and has ensured the proper signing of an external auditors firm to comply with such requirements. Auditor Comments: 2 CFR 200.501 states that a non-federal entity that expends $750,000 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. 2 CFR 200.508 states that it is the auditee responsibility to (1) prepare financial statements, including, the schedule of expenditures of Federal awards in accordance with 2 CFR 200.510, (2) promptly follow up and take corrective action on audit findings, including preparing a summary schedule of prior audit findings and a corrective plan, and (3) provide the auditor access to personnel, accounts, books, records, supporting documentation, and any other information needed for the auditor to perform the audit required by this part, among other things. Audit Status: In process of completion.
Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition Due to the unexpected resignation of its independent auditor, we noted that the Organization has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2022, within the stipulated nine months after the end of the audit period. Cause The Organization has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended June 30, 2022. Effect The Organization is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended June 30, 2022. Recommendation We recommend that the Organization incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form. Views of Responsible Officials and Planned Corrective Action The Organization concurs with the recommendation. The Organization acknowledges that the unexpected resignation of the former independent auditor, and the subsequent domino effect of a delay in securing a new independent auditor, the delay in the new independent auditor’s completion of the final June 30, 2022 audit report, and the issuance of the Organization’s single audit report delayed the related Data Collection Form for the year ending June 30, 2022, beyond the nine-month deadline stipulated by the Uniform Guidance. The Organization has established internal compliance controls---the oversight of the process for timely filing with the director of administrative operations, chief executive officer, Board finance sub-committee and full Board.
Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition Due to the unexpected resignation of its independent auditor, we noted that the Organization has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2022, within the stipulated nine months after the end of the audit period. Cause The Organization has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended June 30, 2022. Effect The Organization is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended June 30, 2022. Recommendation We recommend that the Organization incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form. Views of Responsible Officials and Planned Corrective Action The Organization concurs with the recommendation. The Organization acknowledges that the unexpected resignation of the former independent auditor, and the subsequent domino effect of a delay in securing a new independent auditor, the delay in the new independent auditor’s completion of the final June 30, 2022 audit report, and the issuance of the Organization’s single audit report delayed the related Data Collection Form for the year ending June 30, 2022, beyond the nine-month deadline stipulated by the Uniform Guidance. The Organization has established internal compliance controls---the oversight of the process for timely filing with the director of administrative operations, chief executive officer, Board finance sub-committee and full Board.
Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition Due to the unexpected resignation of its independent auditor, we noted that the Organization has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2022, within the stipulated nine months after the end of the audit period. Cause The Organization has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended June 30, 2022. Effect The Organization is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended June 30, 2022. Recommendation We recommend that the Organization incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form. Views of Responsible Officials and Planned Corrective Action The Organization concurs with the recommendation. The Organization acknowledges that the unexpected resignation of the former independent auditor, and the subsequent domino effect of a delay in securing a new independent auditor, the delay in the new independent auditor’s completion of the final June 30, 2022 audit report, and the issuance of the Organization’s single audit report delayed the related Data Collection Form for the year ending June 30, 2022, beyond the nine-month deadline stipulated by the Uniform Guidance. The Organization has established internal compliance controls---the oversight of the process for timely filing with the director of administrative operations, chief executive officer, Board finance sub-committee and full Board.
Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition Due to the unexpected resignation of its independent auditor, we noted that the Organization has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2022, within the stipulated nine months after the end of the audit period. Cause The Organization has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended June 30, 2022. Effect The Organization is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended June 30, 2022. Recommendation We recommend that the Organization incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form. Views of Responsible Officials and Planned Corrective Action The Organization concurs with the recommendation. The Organization acknowledges that the unexpected resignation of the former independent auditor, and the subsequent domino effect of a delay in securing a new independent auditor, the delay in the new independent auditor’s completion of the final June 30, 2022 audit report, and the issuance of the Organization’s single audit report delayed the related Data Collection Form for the year ending June 30, 2022, beyond the nine-month deadline stipulated by the Uniform Guidance. The Organization has established internal compliance controls---the oversight of the process for timely filing with the director of administrative operations, chief executive officer, Board finance sub-committee and full Board.
Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition Due to the unexpected resignation of its independent auditor, we noted that the Organization has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2022, within the stipulated nine months after the end of the audit period. Cause The Organization has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended June 30, 2022. Effect The Organization is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended June 30, 2022. Recommendation We recommend that the Organization incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form. Views of Responsible Officials and Planned Corrective Action The Organization concurs with the recommendation. The Organization acknowledges that the unexpected resignation of the former independent auditor, and the subsequent domino effect of a delay in securing a new independent auditor, the delay in the new independent auditor’s completion of the final June 30, 2022 audit report, and the issuance of the Organization’s single audit report delayed the related Data Collection Form for the year ending June 30, 2022, beyond the nine-month deadline stipulated by the Uniform Guidance. The Organization has established internal compliance controls---the oversight of the process for timely filing with the director of administrative operations, chief executive officer, Board finance sub-committee and full Board.
Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition Due to the unexpected resignation of its independent auditor, we noted that the Organization has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2022, within the stipulated nine months after the end of the audit period. Cause The Organization has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended June 30, 2022. Effect The Organization is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended June 30, 2022. Recommendation We recommend that the Organization incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form. Views of Responsible Officials and Planned Corrective Action The Organization concurs with the recommendation. The Organization acknowledges that the unexpected resignation of the former independent auditor, and the subsequent domino effect of a delay in securing a new independent auditor, the delay in the new independent auditor’s completion of the final June 30, 2022 audit report, and the issuance of the Organization’s single audit report delayed the related Data Collection Form for the year ending June 30, 2022, beyond the nine-month deadline stipulated by the Uniform Guidance. The Organization has established internal compliance controls---the oversight of the process for timely filing with the director of administrative operations, chief executive officer, Board finance sub-committee and full Board.
2022-001 ? Housing Quality Standards Inspections Federal Program Information: U.S. Department of Housing and Urban Development - Housing Choice Voucher: AL - 14.871 Section 8 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c), 2 CFR section 200.305(b)(3). Condition: During audit procedures, it was identified that the Unit?s inspections were being completed but if there was a failure, re-inspections were not completed as required within the 30-day period. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit is not effectively reinspecting units. Identification of Questioned Costs: None identified. Context: The population of 40 tenants were examine and there was 14 that had a failed inspection with no reinspection. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that federal reimbursements requests are submitted on a timely basis. Views of Responsible Officials and Corrective Action Plan: Catherine Bowler, Director of Finance and Operations is the responsible Official and please see the Corrective Action Plan issued by the Laconia Housing and Redevelopment Authority.
2022-001 ? Housing Quality Standards Inspections Federal Program Information: U.S. Department of Housing and Urban Development - Housing Choice Voucher: AL - 14.871 Section 8 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c), 2 CFR section 200.305(b)(3). Condition: During audit procedures, it was identified that the Unit?s inspections were being completed but if there was a failure, re-inspections were not completed as required within the 30-day period. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit is not effectively reinspecting units. Identification of Questioned Costs: None identified. Context: The population of 40 tenants were examine and there was 14 that had a failed inspection with no reinspection. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that federal reimbursements requests are submitted on a timely basis. Views of Responsible Officials and Corrective Action Plan: Catherine Bowler, Director of Finance and Operations is the responsible Official and please see the Corrective Action Plan issued by the Laconia Housing and Redevelopment Authority.
Finding No. 2021-004: Procurement U.S. Department of Housing and Urban Development Passed Through the State of Hawaii Department of Human Services Emergency Solutions Grant Program Coronavirus Federal Assistance Listing Number 14.231 Criteria - A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audi conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition - We noted that KMNH has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended December 31, 2021, within the stipulated nine months after the end of the audit period. Cause - KMNH has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended December 31, 2021. Effect - KMNH is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended December 31, 2021. Recommendation - We recommend that KMNH incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form.
Finding No. 2021-004: Procurement U.S. Department of Housing and Urban Development Passed Through the State of Hawaii Department of Human Services Emergency Solutions Grant Program Coronavirus Federal Assistance Listing Number 14.231 Criteria - A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audi conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition - We noted that KMNH has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended December 31, 2021, within the stipulated nine months after the end of the audit period. Cause - KMNH has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended December 31, 2021. Effect - KMNH is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended December 31, 2021. Recommendation - We recommend that KMNH incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form.
Finding No. 2021-004: Procurement U.S. Department of Housing and Urban Development Passed Through the State of Hawaii Department of Human Services Emergency Solutions Grant Program Coronavirus Federal Assistance Listing Number 14.231 Criteria - A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audi conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition - We noted that KMNH has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended December 31, 2021, within the stipulated nine months after the end of the audit period. Cause - KMNH has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended December 31, 2021. Effect - KMNH is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended December 31, 2021. Recommendation - We recommend that KMNH incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form.
Finding No. 2021-004: Procurement U.S. Department of Housing and Urban Development Passed Through the State of Hawaii Department of Human Services Emergency Solutions Grant Program Coronavirus Federal Assistance Listing Number 14.231 Criteria - A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audi conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition - We noted that KMNH has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended December 31, 2021, within the stipulated nine months after the end of the audit period. Cause - KMNH has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended December 31, 2021. Effect - KMNH is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended December 31, 2021. Recommendation - We recommend that KMNH incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form.
Finding No. 2021-004: Procurement U.S. Department of Housing and Urban Development Passed Through the State of Hawaii Department of Human Services Emergency Solutions Grant Program Coronavirus Federal Assistance Listing Number 14.231 Criteria - A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audi conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition - We noted that KMNH has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended December 31, 2021, within the stipulated nine months after the end of the audit period. Cause - KMNH has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended December 31, 2021. Effect - KMNH is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended December 31, 2021. Recommendation - We recommend that KMNH incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form.
Finding No. 2021-004: Procurement U.S. Department of Housing and Urban Development Passed Through the State of Hawaii Department of Human Services Emergency Solutions Grant Program Coronavirus Federal Assistance Listing Number 14.231 Criteria - A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audi conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition - We noted that KMNH has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended December 31, 2021, within the stipulated nine months after the end of the audit period. Cause - KMNH has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended December 31, 2021. Effect - KMNH is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended December 31, 2021. Recommendation - We recommend that KMNH incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form.
Assistance Listing Number, Federal Agency, and Program Name: Across all major programs Federal Award Identification Number and Year: Across all major programs Pass-through Entity – Various Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2021. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2021 fiscal year were not reconciled or closed in a timely manner. Therefore the data collection form was not submitted within the required time. Recommendation – We recommend that the Organization maintain a system of policies, procedures, and controls to ensure that the financial records closed in a timely manner in order to facilitate the timely submission of the data collection form. View of Responsible Officials and Corrective Action Plan – The Organization agrees with this finding. The Chief Financial Officer in collaboration with the Finance Associate and the Financial Consultant will set a calendar at the end of the fiscal year to ensure timely closeout of the books that will allow ample time to engage and complete the audit prior to the deadline for the FAC filing.
Criteria The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. Condition As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year. Cause Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded Effect The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested. Recommendation We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process. View of Responsible Officials Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit. As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Criteria The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. Condition As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year. Cause Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded Effect The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested. Recommendation We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process. View of Responsible Officials Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit. As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Finding 2021-010 – Lack of Internal Controls over the Schedule of Expenditures of Federal Awards PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance QUESTIONED COSTS: $0 Condition: During the review of 100% of federal expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA), federal programs were identified that were not accurately reported. Actual federal expenditures for the major federal program Assistance Listing 21.019 - Coronavirus Relief Fund were $2,024,981 and the County reported $193,762. Therefore, expenditures were understated $1,831,219 for the major federal program Coronavirus Relief Fund. Further, actual federal expenditures for Assistance Listing 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) FEMA DR-4438 were $0 and the County reported $109,550. Therefore, the expenditures were overstated by $109,550. Actual federal expenditures for Assistance Listing 97.042 - Emergency Management Performance Grants were $7,177 and the County reported $15,000. Therefore, expenditures were overstated by $7,823. Additionally, the county reported expenditures of the Social Security Administration, overstating expenditures $1,200, although considered federally sourced, expenditures should not be reported on the SEFA. Reported Total Expenditures of Federal Awards $ 343,373 Add: Coronavirus Relief Fund (21.019) 1,831,219 Less: Disaster Grants – Public Assistance (Presidentially Declared Disasters) FEMA DR-4438 (97.036) (109,550) Less: Emergency Management Performance Grants (97.042) ( 7,823) Less: Social Security Administration ( 1,200) Actual Federal Expenditures of Federal Awards $2,056,019 SEFA Understated $1,712,646 Cause of Condition: Policies and procedures have not been designed and implemented to ensure accurate reporting of expenditures for federal awards. Effect of Condition: This resulted in a material misstatement of the County’s Schedule of Expenditures of Federal Awards and could increase the potential for material noncompliance. Recommendation: OSAI recommends the County design and implement internal controls to ensure accurate reporting of federal expenditures on the SEFA. Management Response: Chairman of the Board of County Commissioners: The BOCC will work to design and implement internal controls to ensure accurate reporting of federal expenditures on the SEFA and ensure compliance with federal requirements. Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in part: Definition of Internal Control Internal control is a process effected by an entity’s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. Further, Title 2 CFR 200 § 200.510(a)(b) Financial Statements reads as follows: (a) Financial statements. The auditee must prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with §200.514 Scope of audit, paragraph (a) and prepare separate financial statements. (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.
Finding 2021-010 – Lack of Internal Controls Over Schedule of Expenditures of Federal Awards PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management: Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: Oklahoma Cares PPE – Reimbursement 2020; 4530-DR-OK SA-2242 FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and Period of Performance QUESTIONED COSTS: $-0- Condition: During our audit, we identified federal programs that were not listed accurately on the County’s Schedule of Expenditures of Federal Awards (SEFA). Federal expenditures were understated by $532,307. The following misstatements were noted: Expenditures: • The actual expenditures for Coronavirus Relief Fund, ALN 21.019, were $774,579, the County reported $241,966, which understated expenditures by $532,613. • The actual expenditures for Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027, were $2,437, the County reported $2,807, which overstated expenditures by $370. • The actual expenditures for FEMA – Public Assistance DR-4438, Disaster Grants – Public Assistance (Presidentially Declared Disasters), ALN 97.036, were $$60,394, the County reported $46,703, which understated expenditures by $13,691. • The actual expenditures of FEMA – Category B DR-4438 ALN 97.067 were $0, the County reported $8,342, which overstated expenditures by $8,342. • The actual expenditures for FEMA – Public Assistance OEM DR – 4453 ALN 97.036 were $0, the County reported $870, which overstated expenditures by $870. • The actual expenditures for COVID-19 FEMA-Public Assistance DR-4530, Disaster Grants – Public Assistance (Presidentially Declared Disasters), ALN 97.036, were $28,063, the County reported $21,047, which understated expenditures by $7,016. • The actual expenditures for Emergency Management Performance Grant, ALN 97.042, were $45,000, the County reported $56,250, which overstated expenditures by $11,250. • The actual expenditures for Fire Management Assistance Grand, ALN 97.046, were $0, the County reported $181, which overstated expenditures by $181. Cause of Condition: Policies and procedures have not been designed and implemented to ensure an accurate reporting of expenditures for federal awards. Effect of Condition: These conditions resulted in the misstatement of the expenditures reported on the County’s SEFA and could increase the potential for material noncompliance. Recommendation: OSAI recommends county officials and department heads gain an understanding of federal programs awarded to Washington County. Internal control procedures should be designed and implemented to ensure accurate reporting of expenditures on the SEFA and to ensure compliance with federal requirements. Management Response: District 1 County Commissioner: Not by way of excuse, but truly in response, the Federal programs associated with the COVID response were unnecessarily arduous and created confusion at all levels of government. While the monetary response was accepted, the premise of these programs was nothing more than an administrative shell game. From the outset of the response, guidance was termed as “interim”, then “final interim” and finally, “final” (redundancy intentional). The intent of our national level leadership became more apparent as these programs progressed with each iteration of programming being reliant on returned funds from the previous. Without grandstanding, I will simply say that no entity, regardless of their planning with these programs, will be found as fully compliant. As these programs have a sunset in the near term, I suspect these findings will disappear. District 2 County Commissioner: I was not in office at this time; however, I will work with other elected officials, county officials and department heads to ensure there is an understanding of federal programs awarded to Washington County, and the use of internal control procedures designed and implemented to ensure accurate reporting of expenditures and revenues on the SEFA and to ensure compliance with federal requirements. District 3 County Commissioner: These programs are temporary and difficult to navigate through. I will continue to press staff to report effectively as possible and to be responsive to specific requests that are made. County Clerk: I will work with the other Elected Officials to gain a better understanding of federal programs that are awarded to our County. I will work with the other offices to implement internal controls to ensure accurate reporting on the SEFA. County Sheriff: I have and will continue to work toward compliance in these areas of SEFA. I will continue to work with the other elected officials to gain proper understanding of Federal Programs and Requirements. Criteria: Title 2 CFR 200 § 200.210(a)(b) Financial Statements reads as follows: (a) Financial statements. The auditee must prepare financial statements that reflect its financial position, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with §200.514 Scope of audit, paragraph (a) and prepare separate financial statements. (b) Schedule of expenditures of federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statement, which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. 2 CFR § 200.303(a) Internal Controls reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 200.508(b) Auditee responsibilities reads as follows: The auditee must: Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. 2 CFR § 200.510 (b) Financial statements reads as follows: Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. [….] Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. Furthermore, GAO Standards – Principle 6 – Define Objectives and Risk Tolerances – 6.05 states: Definitions of Objectives Management considers external requirements and internal expectations when defining objectives to enable the design of internal control. Legislators, regulators, and standardsetting bodies set external requirements by establishing the laws, regulations, and standards with which the entity is required to comply. Management identifies, understands, and incorporates these requirements into the entity’s objectives. Management sets internal expectations and requirements through the established standards of conduct, oversight structure, organizational structure, and expectations of competence as part of the control environment.
Criteria The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. Condition As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year. Cause Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded Effect The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested. Recommendation We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process. View of Responsible Officials Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit. As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Criteria The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. Condition As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year. Cause Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded Effect The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested. Recommendation We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process. View of Responsible Officials Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit. As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Finding 2021-010 – Lack of Internal Controls over the Schedule of Expenditures of Federal Awards PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance QUESTIONED COSTS: $0 Condition: During the review of 100% of federal expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA), federal programs were identified that were not accurately reported. Actual federal expenditures for the major federal program Assistance Listing 21.019 - Coronavirus Relief Fund were $2,024,981 and the County reported $193,762. Therefore, expenditures were understated $1,831,219 for the major federal program Coronavirus Relief Fund. Further, actual federal expenditures for Assistance Listing 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) FEMA DR-4438 were $0 and the County reported $109,550. Therefore, the expenditures were overstated by $109,550. Actual federal expenditures for Assistance Listing 97.042 - Emergency Management Performance Grants were $7,177 and the County reported $15,000. Therefore, expenditures were overstated by $7,823. Additionally, the county reported expenditures of the Social Security Administration, overstating expenditures $1,200, although considered federally sourced, expenditures should not be reported on the SEFA. Reported Total Expenditures of Federal Awards $ 343,373 Add: Coronavirus Relief Fund (21.019) 1,831,219 Less: Disaster Grants – Public Assistance (Presidentially Declared Disasters) FEMA DR-4438 (97.036) (109,550) Less: Emergency Management Performance Grants (97.042) ( 7,823) Less: Social Security Administration ( 1,200) Actual Federal Expenditures of Federal Awards $2,056,019 SEFA Understated $1,712,646 Cause of Condition: Policies and procedures have not been designed and implemented to ensure accurate reporting of expenditures for federal awards. Effect of Condition: This resulted in a material misstatement of the County’s Schedule of Expenditures of Federal Awards and could increase the potential for material noncompliance. Recommendation: OSAI recommends the County design and implement internal controls to ensure accurate reporting of federal expenditures on the SEFA. Management Response: Chairman of the Board of County Commissioners: The BOCC will work to design and implement internal controls to ensure accurate reporting of federal expenditures on the SEFA and ensure compliance with federal requirements. Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in part: Definition of Internal Control Internal control is a process effected by an entity’s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. Further, Title 2 CFR 200 § 200.510(a)(b) Financial Statements reads as follows: (a) Financial statements. The auditee must prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with §200.514 Scope of audit, paragraph (a) and prepare separate financial statements. (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.
Finding 2021-010 – Lack of Internal Controls Over Schedule of Expenditures of Federal Awards PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management: Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: Oklahoma Cares PPE – Reimbursement 2020; 4530-DR-OK SA-2242 FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and Period of Performance QUESTIONED COSTS: $-0- Condition: During our audit, we identified federal programs that were not listed accurately on the County’s Schedule of Expenditures of Federal Awards (SEFA). Federal expenditures were understated by $532,307. The following misstatements were noted: Expenditures: • The actual expenditures for Coronavirus Relief Fund, ALN 21.019, were $774,579, the County reported $241,966, which understated expenditures by $532,613. • The actual expenditures for Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027, were $2,437, the County reported $2,807, which overstated expenditures by $370. • The actual expenditures for FEMA – Public Assistance DR-4438, Disaster Grants – Public Assistance (Presidentially Declared Disasters), ALN 97.036, were $$60,394, the County reported $46,703, which understated expenditures by $13,691. • The actual expenditures of FEMA – Category B DR-4438 ALN 97.067 were $0, the County reported $8,342, which overstated expenditures by $8,342. • The actual expenditures for FEMA – Public Assistance OEM DR – 4453 ALN 97.036 were $0, the County reported $870, which overstated expenditures by $870. • The actual expenditures for COVID-19 FEMA-Public Assistance DR-4530, Disaster Grants – Public Assistance (Presidentially Declared Disasters), ALN 97.036, were $28,063, the County reported $21,047, which understated expenditures by $7,016. • The actual expenditures for Emergency Management Performance Grant, ALN 97.042, were $45,000, the County reported $56,250, which overstated expenditures by $11,250. • The actual expenditures for Fire Management Assistance Grand, ALN 97.046, were $0, the County reported $181, which overstated expenditures by $181. Cause of Condition: Policies and procedures have not been designed and implemented to ensure an accurate reporting of expenditures for federal awards. Effect of Condition: These conditions resulted in the misstatement of the expenditures reported on the County’s SEFA and could increase the potential for material noncompliance. Recommendation: OSAI recommends county officials and department heads gain an understanding of federal programs awarded to Washington County. Internal control procedures should be designed and implemented to ensure accurate reporting of expenditures on the SEFA and to ensure compliance with federal requirements. Management Response: District 1 County Commissioner: Not by way of excuse, but truly in response, the Federal programs associated with the COVID response were unnecessarily arduous and created confusion at all levels of government. While the monetary response was accepted, the premise of these programs was nothing more than an administrative shell game. From the outset of the response, guidance was termed as “interim”, then “final interim” and finally, “final” (redundancy intentional). The intent of our national level leadership became more apparent as these programs progressed with each iteration of programming being reliant on returned funds from the previous. Without grandstanding, I will simply say that no entity, regardless of their planning with these programs, will be found as fully compliant. As these programs have a sunset in the near term, I suspect these findings will disappear. District 2 County Commissioner: I was not in office at this time; however, I will work with other elected officials, county officials and department heads to ensure there is an understanding of federal programs awarded to Washington County, and the use of internal control procedures designed and implemented to ensure accurate reporting of expenditures and revenues on the SEFA and to ensure compliance with federal requirements. District 3 County Commissioner: These programs are temporary and difficult to navigate through. I will continue to press staff to report effectively as possible and to be responsive to specific requests that are made. County Clerk: I will work with the other Elected Officials to gain a better understanding of federal programs that are awarded to our County. I will work with the other offices to implement internal controls to ensure accurate reporting on the SEFA. County Sheriff: I have and will continue to work toward compliance in these areas of SEFA. I will continue to work with the other elected officials to gain proper understanding of Federal Programs and Requirements. Criteria: Title 2 CFR 200 § 200.210(a)(b) Financial Statements reads as follows: (a) Financial statements. The auditee must prepare financial statements that reflect its financial position, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with §200.514 Scope of audit, paragraph (a) and prepare separate financial statements. (b) Schedule of expenditures of federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statement, which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. 2 CFR § 200.303(a) Internal Controls reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 200.508(b) Auditee responsibilities reads as follows: The auditee must: Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. 2 CFR § 200.510 (b) Financial statements reads as follows: Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. [….] Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. Furthermore, GAO Standards – Principle 6 – Define Objectives and Risk Tolerances – 6.05 states: Definitions of Objectives Management considers external requirements and internal expectations when defining objectives to enable the design of internal control. Legislators, regulators, and standardsetting bodies set external requirements by establishing the laws, regulations, and standards with which the entity is required to comply. Management identifies, understands, and incorporates these requirements into the entity’s objectives. Management sets internal expectations and requirements through the established standards of conduct, oversight structure, organizational structure, and expectations of competence as part of the control environment.