Department of Health and Human Services Federal Assistance Listing No. 93.185 Community-Based Workforce to Build COVID-19 Vaccine Confidence and Health Resources and Service Administration. Federal Assistance Listing No. 93.011 CDC Communities RISE Noncompliance and significant deficiency over Procurement and Suspension and Debarment Repeat Finding: No Condition: During our audit we noted that procurement documentation was not available to support the selection of the vendors. Also, we were unable to obtain documentation to support the Institute entered into contractual agreements with vendors who were not suspended or debarred from doing business with the Federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement stands: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold. (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Finding 2023-01 (continued) Per 2 CFR 200.318 General procurement stands: (b) The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Per Uniform Guidance, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: The Institute did not apply the required procurement policy relative to sole source contracts in accordance with Uniform Guidance. Management also did not complete a review of vendors/contractors to verify they are not suspended, debarred, or otherwise excluded before contracting. Effect: The Institute does not maintain adequate documentation on whether they have entered into transactions with eligible entities and is in compliance with Federal procurement guidelines. Questioned Costs: Unknown Recommendation: We recommend the Institute maintain adequate documentation to support the procurement process followed when awarding the Federal contract. We also recommend the Institute follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Views of Responsible Officials: See schedule of corrective action plan.
Department of Health and Human Services Federal Assistance Listing No. 93.185 Community-Based Workforce to Build COVID-19 Vaccine Confidence and Health Resources and Service Administration. Federal Assistance Listing No. 93.011 CDC Communities RISE Noncompliance and significant deficiency over Procurement and Suspension and Debarment Repeat Finding: No Condition: During our audit we noted that procurement documentation was not available to support the selection of the vendors. Also, we were unable to obtain documentation to support the Institute entered into contractual agreements with vendors who were not suspended or debarred from doing business with the Federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement stands: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold. (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Finding 2023-01 (continued) Per 2 CFR 200.318 General procurement stands: (b) The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Per Uniform Guidance, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: The Institute did not apply the required procurement policy relative to sole source contracts in accordance with Uniform Guidance. Management also did not complete a review of vendors/contractors to verify they are not suspended, debarred, or otherwise excluded before contracting. Effect: The Institute does not maintain adequate documentation on whether they have entered into transactions with eligible entities and is in compliance with Federal procurement guidelines. Questioned Costs: Unknown Recommendation: We recommend the Institute maintain adequate documentation to support the procurement process followed when awarding the Federal contract. We also recommend the Institute follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Views of Responsible Officials: See schedule of corrective action plan.
Department of Health and Human Services Federal Assistance Listing No. 93.185 Community-Based Workforce to Build COVID-19 Vaccine Confidence and Health Resources and Service Administration. Federal Assistance Listing No. 93.011 CDC Communities RISE Noncompliance and significant deficiency over Procurement and Suspension and Debarment Repeat Finding: No Condition: During our audit we noted that procurement documentation was not available to support the selection of the vendors. Also, we were unable to obtain documentation to support the Institute entered into contractual agreements with vendors who were not suspended or debarred from doing business with the Federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement stands: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold. (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Finding 2023-01 (continued) Per 2 CFR 200.318 General procurement stands: (b) The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Per Uniform Guidance, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: The Institute did not apply the required procurement policy relative to sole source contracts in accordance with Uniform Guidance. Management also did not complete a review of vendors/contractors to verify they are not suspended, debarred, or otherwise excluded before contracting. Effect: The Institute does not maintain adequate documentation on whether they have entered into transactions with eligible entities and is in compliance with Federal procurement guidelines. Questioned Costs: Unknown Recommendation: We recommend the Institute maintain adequate documentation to support the procurement process followed when awarding the Federal contract. We also recommend the Institute follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Views of Responsible Officials: See schedule of corrective action plan.
Department of Health and Human Services Federal Assistance Listing No. 93.185 Community-Based Workforce to Build COVID-19 Vaccine Confidence and Health Resources and Service Administration. Federal Assistance Listing No. 93.011 CDC Communities RISE Noncompliance and significant deficiency over Procurement and Suspension and Debarment Repeat Finding: No Condition: During our audit we noted that procurement documentation was not available to support the selection of the vendors. Also, we were unable to obtain documentation to support the Institute entered into contractual agreements with vendors who were not suspended or debarred from doing business with the Federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement stands: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold. (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Finding 2023-01 (continued) Per 2 CFR 200.318 General procurement stands: (b) The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Per Uniform Guidance, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: The Institute did not apply the required procurement policy relative to sole source contracts in accordance with Uniform Guidance. Management also did not complete a review of vendors/contractors to verify they are not suspended, debarred, or otherwise excluded before contracting. Effect: The Institute does not maintain adequate documentation on whether they have entered into transactions with eligible entities and is in compliance with Federal procurement guidelines. Questioned Costs: Unknown Recommendation: We recommend the Institute maintain adequate documentation to support the procurement process followed when awarding the Federal contract. We also recommend the Institute follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Views of Responsible Officials: See schedule of corrective action plan.
Department of Health and Human Services Federal Assistance Listing No. 93.185 Community-Based Workforce to Build COVID-19 Vaccine Confidence and Health Resources and Service Administration. Federal Assistance Listing No. 93.011 CDC Communities RISE Noncompliance and significant deficiency over Procurement and Suspension and Debarment Repeat Finding: No Condition: During our audit we noted that procurement documentation was not available to support the selection of the vendors. Also, we were unable to obtain documentation to support the Institute entered into contractual agreements with vendors who were not suspended or debarred from doing business with the Federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement stands: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold. (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Finding 2023-01 (continued) Per 2 CFR 200.318 General procurement stands: (b) The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Per Uniform Guidance, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: The Institute did not apply the required procurement policy relative to sole source contracts in accordance with Uniform Guidance. Management also did not complete a review of vendors/contractors to verify they are not suspended, debarred, or otherwise excluded before contracting. Effect: The Institute does not maintain adequate documentation on whether they have entered into transactions with eligible entities and is in compliance with Federal procurement guidelines. Questioned Costs: Unknown Recommendation: We recommend the Institute maintain adequate documentation to support the procurement process followed when awarding the Federal contract. We also recommend the Institute follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Views of Responsible Officials: See schedule of corrective action plan.
#2023-003 – Assistance Listing Number 14.155 Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, U.S. Department of Housing and Urban Development Material Weakness in Internal Control and Failure to Comply with Federal Requirements of Contracts. Criteria: The audited financial statements are required to be submitted to the PIH-REAC online system within 90 days of year end according to the Uniform Financial Reporting Standards (UFRS) for not-for-profit multifamily program participants, HUD Audit Guide 2000.04 Chapter §3.3 and the Uniform Guidance – 2 CFR §200.514(d)(1). Statement of Condition: The audited financial statements were not submitted into the PIH-REAC online system within 90 days of year end. The Corporation’s management did not engage an auditor until April 4, 2024. Cause: Corporation experienced turnover in the Executive Director and other positions near year end. This turnover caused the books not to be closed in a timely manner and the books were not closed accurately. This contributed to the late submission of the financial statements into the PIH-REAC system. Effect: Corporation was not in compliance with the regulatory agreement. Recommendation: Management should close the books after year-end in a timely manner. Management should also engage an auditor before the end of the year to ensure the submission of financial data into the PIH-REAC system within ninety (90) days following year-end. Questioned costs: None.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
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 form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Data collection form was not submitted on 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 – We agree with this finding. The Chief Financial Officer in collaboration with the Assistant Director for Finance and the Assistant Director for Financial Compliance 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.
Finding Type - Material weakness relative to timely reporting of the schedule of expenditures of federal awards ("SEFA") and associated data collection form on reporting for single audits. Criteria - Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with section 200.514. Condition - the data collection form was not submitted within the required time as required by 2 CFR 200.512. Context - The Organization had $1,048,996 in expenditures under various federal awards to report on the Schedule of Expenditures of Federal Awards ("SEFA") for the year ended December 31, 2023. The Organization did not have the single audit completed within the Uniform Guidance required timeframe. Cause/Effect - The Organization's controls were not adequate to ensure compliance with federal statutes, regulations, and Uniform Guidance requirements. Recommendation - We recommend the Organization strengthen internal controls and evaluate or monitor compliance with federal statutes, regulations, and the terms and conditions of their awards. View of Responsible Officials and Corrective Action Plan - The Organization agrees with the finding and recommendation as outlined above. The Organization has remedied its controls and procedures to ensure the single audit is completed witthin the required timeline.
Assistance Listing Number, Federal Agency, and Program Name: All major programs Federal Award Identification Number and Year: 2023 Finding Type – Material weakness over compliance Repeat Finding - Yes Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2023. Context – The County’s single audit was not completed prior to the due date of data collection form. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The County’s Schedule of Federal Awards was not prepared in a timely manner. Effect – Data collection forms were not submitted on time. Recommendation – We recommend that the County develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with finding. See corrective action plan.
MATERIAL WEAKNESSES 2023-001- EIV Forms Federal Program Information: Housing Choice Voucher Cluster: CFDA - 14.871 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c) Condition: During audit procedures, it was identified that the Newmarket Housing Authorities' EIV forms for new tenants were not being completed. Cause: The Authority does not have the necessary internal controls over compliance. Effect: The Authority is not pulling EIV information from the website in a timely manner with any of their new tenants that have come to the unit. Identification of Questioned Costs: None identified. Context: 40 tenant files were pulled for review. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Newmarket Housing Authority implement internal control processes and procedures to ensure that EIV forms are done timely Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Authority.
2023-003 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds Federal Awarding Agency – U.S. Department of the Treasury Assistance Listing Number – 21.027 FAIN – n/a Award Year – 2021 Questioned costs – none Criteria: 2 CFR Part 200 in general and 2 CFR sections 200.303(a) require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, and earmarking. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 200.332, 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
2023-003 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds Federal Awarding Agency – U.S. Department of the Treasury Assistance Listing Number – 21.027 FAIN – n/a Award Year – 2021 Questioned costs – none Criteria: 2 CFR Part 200 in general and 2 CFR sections 200.303(a) require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, and earmarking. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 200.332, 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
MATERIAL WEAKNESSES 2023-001- EIV Forms Federal Program Information: Housing Choice Voucher Cluster: CFDA - 14.871 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c) Condition: During audit procedures, it was identified that the Newmarket Housing Authorities' EIV forms for new tenants were not being completed. Cause: The Authority does not have the necessary internal controls over compliance. Effect: The Authority is not pulling EIV information from the website in a timely manner with any of their new tenants that have come to the unit. Identification of Questioned Costs: None identified. Context: 40 tenant files were pulled for review. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Newmarket Housing Authority implement internal control processes and procedures to ensure that EIV forms are done timely Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Authority.
2023-003 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds Federal Awarding Agency – U.S. Department of the Treasury Assistance Listing Number – 21.027 FAIN – n/a Award Year – 2021 Questioned costs – none Criteria: 2 CFR Part 200 in general and 2 CFR sections 200.303(a) require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, and earmarking. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 200.332, 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
2023-003 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds Federal Awarding Agency – U.S. Department of the Treasury Assistance Listing Number – 21.027 FAIN – n/a Award Year – 2021 Questioned costs – none Criteria: 2 CFR Part 200 in general and 2 CFR sections 200.303(a) require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, and earmarking. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 200.332, 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
2023-001 – Education Stabilization Fund (ESF) Reporting: 30000 Elementary and Secondary School Emergency Relief II (ESSER II) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund: Learning Loss Expanded Learning Opportunities (ELO) Grant GEER II Expanded Learning Opportunities (ELO) Grant: ESSER III: State Reserve, Learning Loss Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425 Pass-Through Agency: California Department of Education Pass-Through Number: 15547, 15559, 10155, 15619, 15620, 15621 Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Center reported the full allocation of ESF funds for the year ended June 30, 2022, rather than the expenditure incurred during the year. Context: While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2022 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Effect: Over-reporting of $1,010,606 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Center design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan: The Center became aware of a discrepancy between the annual ESSER financial reporting and the quarterly reports during the audit. While the quarterly reports to the CDE were accurately reported and expenditures accurately recorded, the annual performance report was created manually, and reported full allocations per fund, in error during 2023 by the Center’s back-office service providers without review from Center’s management. Upon the Center’s communication with the CDE, the CDE has notified that “according to the U.S. Department of Education for ESSER Annual Reporting, there will be an opportunity to correct the Year 3 report that was submitted in March of 2023. The U.S. Department of Education requires that we submit Year 4 data to them first. This data will be collected in March of 2024. At that time, the LEA should report to the best of their ability, based on the previously reported expenditures. Depending on the previous amount reported, this may mean the LEA is not yet able to fully report applicable expenditures. This will be corrected later. Following the initial Year 4 submission, the U.S. Department of Education will allow for a Year 3 correction period. At this time, the LEA will be able to correct the Year 3 report. Finally, there will be a Year 4 correction period. This correction period will be based on any changes reported during the Year 3 correction period, to allow for a final true up of Year 4 reporting based on actual expenditures.” Therefore, the correction will be made in March of 2024. In the future, the Center’s back-office service providers will be utilizing a stricter rule for cross-checking reports, and will send reports (quarterly and annual) to the Center for a third review before submitting. The Center will also make the correction in March of 2024 per the CDE’s and U.S. Department of Education direction.
2023-001 – Education Stabilization Fund (ESF) Reporting: 30000 Elementary and Secondary School Emergency Relief II (ESSER II) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund Elementary and Secondary School Emergency Relief III (ESSER III) Fund: Learning Loss Expanded Learning Opportunities (ELO) Grant GEER II Expanded Learning Opportunities (ELO) Grant: ESSER III: State Reserve, Learning Loss Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425 Pass-Through Agency: California Department of Education Pass-Through Number: 15547, 15559, 10155, 15619, 15620, 15621 Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Center reported the full allocation of ESF funds for the year ended June 30, 2022, rather than the expenditure incurred during the year. Context: While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2022 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Effect: Over-reporting of $1,010,606 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Center design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan: The Center became aware of a discrepancy between the annual ESSER financial reporting and the quarterly reports during the audit. While the quarterly reports to the CDE were accurately reported and expenditures accurately recorded, the annual performance report was created manually, and reported full allocations per fund, in error during 2023 by the Center’s back-office service providers without review from Center’s management. Upon the Center’s communication with the CDE, the CDE has notified that “according to the U.S. Department of Education for ESSER Annual Reporting, there will be an opportunity to correct the Year 3 report that was submitted in March of 2023. The U.S. Department of Education requires that we submit Year 4 data to them first. This data will be collected in March of 2024. At that time, the LEA should report to the best of their ability, based on the previously reported expenditures. Depending on the previous amount reported, this may mean the LEA is not yet able to fully report applicable expenditures. This will be corrected later. Following the initial Year 4 submission, the U.S. Department of Education will allow for a Year 3 correction period. At this time, the LEA will be able to correct the Year 3 report. Finally, there will be a Year 4 correction period. This correction period will be based on any changes reported during the Year 3 correction period, to allow for a final true up of Year 4 reporting based on actual expenditures.” Therefore, the correction will be made in March of 2024. In the future, the Center’s back-office service providers will be utilizing a stricter rule for cross-checking reports, and will send reports (quarterly and annual) to the Center for a third review before submitting. The Center will also make the correction in March of 2024 per the CDE’s and U.S. Department of Education direction.
Subject: Allowable Costs Cost Principles Federal Agency: Housing and Urban Development Federal Program: Public and Indiana Housing Assistance Listing Number: 14.850 Compliance Requirements: Allowable Costs Cost Principles Audit Findings: Significant Deficiency Finding Number: 2023-001 Criteria: Internal controls preventing unallowable costs must support a low assessed level of control risk as required by 2 CFR § 200.514 as a lack of internal controls could lead to unallowable cost under 2 CFR 200. Also, in accordance with 2 CFR 200 Subpart E - Cost Principles, costs must be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. Condition: During our audit, we identified deficiencies in internal controls where the Authority was not following its Board approved check signing policy. The Housing Authority of the City of Richmond's Board approved policy determined that all checks, regardless of the amount, must be signed by the Executive Director or designee and a Board member. Amount of Questioned Costs: None noted. Context: Per the Authorities Board-approved check signing policy, all checks must be signed by 2 individuals (ED or other designee, and a Board Member). Of the 25 checks tested, all of them only had one signature, which goes against this policy. Cause: The Authority's internal controls over the accounts payables and check signing processes were inadequate in monitoring and identifying where disbursements failed to adhere to the corresponding policies, allowing checks with one signature to be processed. The Authority requires all checks to be signed by the Executive Director or a designee, as well as a Board Member, all of whom are approved as a bank signatory. The Authority printed the checks for payment without having an approved board member review over the checks and supporting backup prior to making the payments. Effect: A lack of internal controls could lead to unallowable costs under 24 CFR 200. During our audit we did not identify any unallowable cost; however, the Authority could have incurred unallowable costs related to the checks that were paid during the year because of this lack of adequate internal controls over the monitoring of check disbursements. Auditor’s Recommendation: The Authority should review board approved policies to ensure that segregation of duties are adequately performed. We recommend the Authority and the Board of Commissioners review the Check Signing Policy and make the necessary amendments to this Policy to allow for this Policy to be more effective and efficient. Subsequent to year end, the Authority made the appropriate changes and implementation to its check signing policy that checks under $10,000 require one signature for approval and all non recurring monthly expenses over $10,000 require two signatures for approval. Grantee Response: Management acknowledges the finding and will follow the auditor’s recommendation. The Authority requires all checks to be signed by the Executive Director as primary signer or Financial Operations manager / Director of Finance as secondary signer as well as chairman of Board in emergency role if primary or secondary is unavailable, all of whom are approved as a bank signatory. All checks under $10,000 require one signature from primary check signer (Executive Director / President-CEO) and All non-recurring monthly expenses over $10,000 require two signatures for approval consisting of any combination Executive Director as primary signer or Financial Operations manager / Director of Finance as secondary signer, or as chairman of Board in emergency role if primary or secondary is unavailable.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) 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 in preventing or detecting noncompliance, plan the testing of internal control over compliance for 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. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) 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 in preventing or detecting noncompliance, plan the testing of internal control over compliance for 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. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) 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 in preventing or detecting noncompliance, plan the testing of internal control over compliance for 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. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) 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 in preventing or detecting noncompliance, plan the testing of internal control over compliance for 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. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Program: AL 97.036 – Disaster Grants - Public Assistance (Presidentially Declared Disasters) – Subrecipient Monitoring Grant Number & Year: All open, including 4420-DR-NE, declared March 21, 2019 Federal Grantor Agency: U.S. Department of Homeland Security Criteria: 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501 2 CFR § 200.501(b) (January 1, 2023) states, in relevant part, the following: “A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514 . . .” Per Chapter VII, Section B, of the Agency’s 2023 Annual Administrative Plan for the Public Assistance Program, it is the State’s responsibility to review Single audits completed by subrecipients and to ensure appropriate action is taken for adverse findings. A good internal control plan requires procedures to ensure subrecipient audits are reviewed timely. Condition: The Agency did not ensure subrecipient Single Audits were obtained timely. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The Agency utilizes a spreadsheet to track whether subrecipients obtain Single Audits when required. Additionally, the Agency sends letters to all subrecipients requiring them to respond on whether they were required to obtain a Single Audit. However, the Agency did not complete these processes during fiscal year 2023. We selected six subrecipients for testing that would have required a Single Audit be issued during State fiscal year 2023 based on the amount of funds they received from the Agency. For all six subrecipients tested, the Agency had not verified whether or not the subrecipients obtained Single Audits prior to our inquiry in December 2023. One of the six subrecipients appears to have required a Single Audit because it received $1,261,565 in disaster grant funds passed through the Agency during fiscal year 2022, but it did not obtain one. Cause: According to Agency representatives, the process was not completed due to a severe lack of staffing. Effect: Without adequate monitoring procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency implement procedures to ensure subrecipient audits are reviewed timely. Management Response: Due to the Agency’s extreme staffing shortage which has persisted for two years, NEMA has had to prioritize workload. This has been particularly acute with Federal Aid Administrators to whom the tasks of subrecipient monitoring fall. Several projects slipped the normal timeframes for completion.
CRITERIA: The funding received by CODA is governed by the principles described in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Under 2 CFR 200.514(c)(4), of the Uniform Guidance, a non-Federal entity who receives funding under this program is required to report either lost revenues or eligible expenses during the period of availability, January 1, 2020 to December 31, 2022. CONDITION: During our review of the reporting to HRSA we noted two errors: (1) a portion of the eligible expenses reported were used in the reporting for both Phase 2 and Phase 4 funds; and (2) a portion of the eligible expenses reported were incurred outside of the period of availability. We did note CODA had enough eligible expenses to report during the period of availability. CAUSE and CONTEXT: Based on discussions with management, CODA did not have an internal control to review and approve the report prepared prior to submission through the PRF portal. This led to the report reporting the incorrect eligible expenses for Period 4. POSSIBLE EFFECT: Without an internal control in place to review and approve reports, there is a potential for reports to be submitted that are not accurate and complete. RECOMMENDATION: We recommend the Organization develop formal procedures to ensure reports are reviewed for accuracy and completeness and are approved prior to submission. VIEWS of RESPONSIBLE OFFICIALS and PLANNED CORRECTIVE ACTIONS: CODA has recently added a process to peer review and approve all reporting before the respective report is submitted. This process will apply to all reports.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education Department of Finance and Management Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2021-2023), 4VT310307 (2020-2023), 4VT308907 (2022-2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s CMIA Treasury-State Agreement. The Department of Finance and Management (Finance) improperly calculated Federal interest liabilities for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. The Agency performed only ten cash draws during the fiscal year. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. Since the Agency failed to request funds timely in accordance with the Treasury-State Agreement, Finance should not have calculated a federal interest liability for the program, however, a federal interest liability was reported in the amount of $7,966. Cause: The Agency’s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance’s CMIA Annual Report procedures were not sufficient to ensure that it calculated a federal interest liability for the program only when the State was entitled to the interest. Internal controls did not detect the error prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Improperly calculating the Federal interest liability could potentially allow the State to receive an interest payment to which it is not entitled per 2 CFR section 200.514. Questioned costs: $7,966, the amount of the federal interest liability improperly calculated and included on the Annual Report. Recommendation: We recommend the Agency review and enhance internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education Department of Finance and Management Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2021-2023), 4VT310307 (2020-2023), 4VT308907 (2022-2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s CMIA Treasury-State Agreement. The Department of Finance and Management (Finance) improperly calculated Federal interest liabilities for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. The Agency performed only ten cash draws during the fiscal year. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. Since the Agency failed to request funds timely in accordance with the Treasury-State Agreement, Finance should not have calculated a federal interest liability for the program, however, a federal interest liability was reported in the amount of $7,966. Cause: The Agency’s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance’s CMIA Annual Report procedures were not sufficient to ensure that it calculated a federal interest liability for the program only when the State was entitled to the interest. Internal controls did not detect the error prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Improperly calculating the Federal interest liability could potentially allow the State to receive an interest payment to which it is not entitled per 2 CFR section 200.514. Questioned costs: $7,966, the amount of the federal interest liability improperly calculated and included on the Annual Report. Recommendation: We recommend the Agency review and enhance internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education Department of Finance and Management Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2021-2023), 4VT310307 (2020-2023), 4VT308907 (2022-2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s CMIA Treasury-State Agreement. The Department of Finance and Management (Finance) improperly calculated Federal interest liabilities for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. The Agency performed only ten cash draws during the fiscal year. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. Since the Agency failed to request funds timely in accordance with the Treasury-State Agreement, Finance should not have calculated a federal interest liability for the program, however, a federal interest liability was reported in the amount of $7,966. Cause: The Agency’s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance’s CMIA Annual Report procedures were not sufficient to ensure that it calculated a federal interest liability for the program only when the State was entitled to the interest. Internal controls did not detect the error prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Improperly calculating the Federal interest liability could potentially allow the State to receive an interest payment to which it is not entitled per 2 CFR section 200.514. Questioned costs: $7,966, the amount of the federal interest liability improperly calculated and included on the Annual Report. Recommendation: We recommend the Agency review and enhance internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education Department of Finance and Management Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2021-2023), 4VT310307 (2020-2023), 4VT308907 (2022-2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s CMIA Treasury-State Agreement. The Department of Finance and Management (Finance) improperly calculated Federal interest liabilities for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. The Agency performed only ten cash draws during the fiscal year. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. Since the Agency failed to request funds timely in accordance with the Treasury-State Agreement, Finance should not have calculated a federal interest liability for the program, however, a federal interest liability was reported in the amount of $7,966. Cause: The Agency’s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance’s CMIA Annual Report procedures were not sufficient to ensure that it calculated a federal interest liability for the program only when the State was entitled to the interest. Internal controls did not detect the error prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Improperly calculating the Federal interest liability could potentially allow the State to receive an interest payment to which it is not entitled per 2 CFR section 200.514. Questioned costs: $7,966, the amount of the federal interest liability improperly calculated and included on the Annual Report. Recommendation: We recommend the Agency review and enhance internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education Department of Finance and Management Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2021-2023), 4VT310307 (2020-2023), 4VT308907 (2022-2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s CMIA Treasury-State Agreement. The Department of Finance and Management (Finance) improperly calculated Federal interest liabilities for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. The Agency performed only ten cash draws during the fiscal year. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. Since the Agency failed to request funds timely in accordance with the Treasury-State Agreement, Finance should not have calculated a federal interest liability for the program, however, a federal interest liability was reported in the amount of $7,966. Cause: The Agency’s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance’s CMIA Annual Report procedures were not sufficient to ensure that it calculated a federal interest liability for the program only when the State was entitled to the interest. Internal controls did not detect the error prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Improperly calculating the Federal interest liability could potentially allow the State to receive an interest payment to which it is not entitled per 2 CFR section 200.514. Questioned costs: $7,966, the amount of the federal interest liability improperly calculated and included on the Annual Report. Recommendation: We recommend the Agency review and enhance internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education Department of Finance and Management Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2021-2023), 4VT310307 (2020-2023), 4VT308907 (2022-2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s CMIA Treasury-State Agreement. The Department of Finance and Management (Finance) improperly calculated Federal interest liabilities for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. The Agency performed only ten cash draws during the fiscal year. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. Since the Agency failed to request funds timely in accordance with the Treasury-State Agreement, Finance should not have calculated a federal interest liability for the program, however, a federal interest liability was reported in the amount of $7,966. Cause: The Agency’s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance’s CMIA Annual Report procedures were not sufficient to ensure that it calculated a federal interest liability for the program only when the State was entitled to the interest. Internal controls did not detect the error prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Improperly calculating the Federal interest liability could potentially allow the State to receive an interest payment to which it is not entitled per 2 CFR section 200.514. Questioned costs: $7,966, the amount of the federal interest liability improperly calculated and included on the Annual Report. Recommendation: We recommend the Agency review and enhance internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education Department of Finance and Management Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2021-2023), 4VT310307 (2020-2023), 4VT308907 (2022-2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s CMIA Treasury-State Agreement. The Department of Finance and Management (Finance) improperly calculated Federal interest liabilities for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. The Agency performed only ten cash draws during the fiscal year. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. Since the Agency failed to request funds timely in accordance with the Treasury-State Agreement, Finance should not have calculated a federal interest liability for the program, however, a federal interest liability was reported in the amount of $7,966. Cause: The Agency’s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance’s CMIA Annual Report procedures were not sufficient to ensure that it calculated a federal interest liability for the program only when the State was entitled to the interest. Internal controls did not detect the error prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Improperly calculating the Federal interest liability could potentially allow the State to receive an interest payment to which it is not entitled per 2 CFR section 200.514. Questioned costs: $7,966, the amount of the federal interest liability improperly calculated and included on the Annual Report. Recommendation: We recommend the Agency review and enhance internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-024 Federal Agency: U.S. Department of Education State Agency: Agency of Education Federal Program: Special Education Cluster, COVID-19 – Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Award Number and Year: H027A210098 (7/1/2021 – 9/30/2022), H173A200106 (7/1/2020 – 9/30/2022), H173A210106 (7/1/2021 – 9/30/2022), H027A220098 (7/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s FY2023 CMIA Treasury-State Agreement. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. Instead, the Agency performed cash draws on a random basis throughout the year. Cause: The Agency’s corrective action plan from the FY2022 audit finding was in-process and had not been fully implemented during FY2023. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Questioned costs: Undetermined. Recommendation: We recommend the Agency complete its FY2022 corrective action plan to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-024 Federal Agency: U.S. Department of Education State Agency: Agency of Education Federal Program: Special Education Cluster, COVID-19 – Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Award Number and Year: H027A210098 (7/1/2021 – 9/30/2022), H173A200106 (7/1/2020 – 9/30/2022), H173A210106 (7/1/2021 – 9/30/2022), H027A220098 (7/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s FY2023 CMIA Treasury-State Agreement. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. Instead, the Agency performed cash draws on a random basis throughout the year. Cause: The Agency’s corrective action plan from the FY2022 audit finding was in-process and had not been fully implemented during FY2023. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Questioned costs: Undetermined. Recommendation: We recommend the Agency complete its FY2022 corrective action plan to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-024 Federal Agency: U.S. Department of Education State Agency: Agency of Education Federal Program: Special Education Cluster, COVID-19 – Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Award Number and Year: H027A210098 (7/1/2021 – 9/30/2022), H173A200106 (7/1/2020 – 9/30/2022), H173A210106 (7/1/2021 – 9/30/2022), H027A220098 (7/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s FY2023 CMIA Treasury-State Agreement. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. Instead, the Agency performed cash draws on a random basis throughout the year. Cause: The Agency’s corrective action plan from the FY2022 audit finding was in-process and had not been fully implemented during FY2023. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Questioned costs: Undetermined. Recommendation: We recommend the Agency complete its FY2022 corrective action plan to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-024 Federal Agency: U.S. Department of Education State Agency: Agency of Education Federal Program: Special Education Cluster, COVID-19 – Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Award Number and Year: H027A210098 (7/1/2021 – 9/30/2022), H173A200106 (7/1/2020 – 9/30/2022), H173A210106 (7/1/2021 – 9/30/2022), H027A220098 (7/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Education (Agency) was not in compliance with the funding techniques included in the State’s FY2023 CMIA Treasury-State Agreement. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The funding techniques for the program require that cash draws are performed on a bi-weekly basis, or 26 times during the fiscal year. Instead, the Agency performed cash draws on a random basis throughout the year. Cause: The Agency’s corrective action plan from the FY2022 audit finding was in-process and had not been fully implemented during FY2023. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency does not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State’s cash flow. Questioned costs: Undetermined. Recommendation: We recommend the Agency complete its FY2022 corrective action plan to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State’s Treasury-State Agreement. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-023 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Low-Income Home Energy Assistance COVID-19 – Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2101VTLIEA (10/1/2020 – 9/30/2022), 2101VTLWC5 (5/28/2021 – 9/30/2023), 2101VTLWC6 (5/28/2021 – 9/30/2023), 2101VTE5C6 (3/11/2021 – 9/30/2022), 2301VTLIEA (10/1/2022 – 9/30/2024), 2301VTLIEE (10/1/2022 – 9/30/2024), 2301VTLIEI (10/1/2022 – 9/30/2024) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: None. The error did not result in an unallowable federal interest liability. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-023 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Low-Income Home Energy Assistance COVID-19 – Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2101VTLIEA (10/1/2020 – 9/30/2022), 2101VTLWC5 (5/28/2021 – 9/30/2023), 2101VTLWC6 (5/28/2021 – 9/30/2023), 2101VTE5C6 (3/11/2021 – 9/30/2022), 2301VTLIEA (10/1/2022 – 9/30/2024), 2301VTLIEE (10/1/2022 – 9/30/2024), 2301VTLIEI (10/1/2022 – 9/30/2024) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: None. The error did not result in an unallowable federal interest liability. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-032 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: $113, the amount of the federal interest liability claimed in error. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-032 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: $113, the amount of the federal interest liability claimed in error. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-032 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: $113, the amount of the federal interest liability claimed in error. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.