2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
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.
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.
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 Unit’s EIV forms for new tenants were not being completed. Cause: The Authority does not have the necessary internal controls over compliance. Effect: The Authority is not pulling EIV information from the website in a timely manner with any of their new tenants that have come to the unit. Identification of Questioned Costs: None identified. Context: 40 tenant files were pulled for review Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Authority implement internal control processes and procedures to ensure that EIV forms are done timely Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Authority.
2023-013 CACFP Subrecipient Monitoring BCFNA subrecipient risk assessment and monitoring procedures are not sufficient to ensure CACFP subrecipient compliance with program requirements. During the year ended June 30, 2023, the BCFNA disbursed approximately $75 million to over 750 CACFP subrecipients, which consist of child and adult care centers and sponsors of centers. Disbursements to subrecipients represented approximately 98 percent of the program's expenditures. As part of its pass-through responsibilities, 7 CFR Section 226.6(a)(5), the BCFNA is required to ensure subrecipients effectively operate the program. Regulation 2 CFR Section 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Regulation 2 CFR Section 200.332(d) requires pass-through entities to monitor the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. The BCFNA's subrecipient monitoring process, outlined in the Internal Nutritionist Manual, provides the requirements for monitoring the CACFP facilities/sponsors. The manual provides the planned frequency and type of monitoring activities, monitoring methods, and corrective action requirements. The manual requires the preparation of a risk assessment at the end of each monitoring review that assigns a grade of A, B, B-, or C to the facility/sponsor based on the number and severity of deficiencies and findings. Facilities/sponsors that receive a C grade are determined to be "Seriously Deficient." The assigned grade determines the required timing of future monitoring reviews of the facility/sponsor. Facilities/sponsors with an A grade will be next monitored in 3 years, a B grade within 2 years, a B- grade within 6 months to 1 year, and a C grade within 90 days. During each monitoring review, BCFNA personnel review documentation supporting a sample of claims during a test month. Any identified errors and associated overclaims/underclaims exceeding established thresholds are recouped/reimbursed in the facility's/sponsor's future claims. When reviews identify noncompliance, facilities/sponsors are required to prepare and submit a Corrective Action Plan (CAP) to the BCFNA. In addition, as noted at finding number 2023-012, the BCFNA relies on these subrecipient monitoring procedures to prevent and detect meal reimbursement claim errors. Monitoring reviews have identified significant issues and claim errors, including some potentially fraudulent activity, and led to over 15 contract terminations in recent years. To test compliance with subrecipient monitoring requirements, and to evaluate the effectiveness of BCFNA monitoring procedures, we reviewed and analyzed a randomly-selected sample of 60 BCFNA monitoring reviews conducted for 58 CACFP facilities/sponsors during the year ended June 30, 2023. While our review found the sample monitoring reviews were performed in accordance with the policies and procedures outlined in the Internal Nutritionist Manual, we identified areas where these policies and procedures could be strengthened and improved to ensure facilities/sponsors comply with program requirements and submit proper claims. Our review and analysis of the 60 sampled monitoring reviews noted the monitoring reviews identified significant errors, noncompliance, disallowances, and overclaims. Our comparison of the sampled reviews to prior reviews noted deficient facilities/sponsors generally had continued deficiencies and little improvement from prior reviews, as shown below: • 30 facilities/sponsors received an A grade, while 28 received grades of B, B-, or C • Of the 26 facilities/sponsors that received grades of B, B-, or C, and had a prior review, 19 (73 percent) received the same or lower grade than the prior review • Of the 5 facilities/sponsors that received a C grade and had a prior review, 2 (40 percent) received the same grade as the prior review, and 3 (60 percent) received a lower grade than the prior review • 2 of the 5 facilities/sponsors that received a C grade were terminated as a result of the review or a subsequent 90-day follow-up review • For 41 of 58 (71 percent) monitoring reviews for which the BCFNA tested claims (with claims totaling $482,654 during the test months), the BCFNA identified net overclaims totaling $50,674, or at least 11 percent of the reimbursements tested. A. Risk Assessments The BCFNA prepares and uses risk assessments to determine the extent of monitoring necessary for each facility/sponsor. However, these risk assessments consider only the previous monitoring review grade (conducted up to 3 years previously), and do not consider other pertinent risk factors outlined in federal regulations. Regulation 2 CFR Section 200.332(b) suggests risk assessments should consider the subrecipient's prior experience with the same or similar subawards, the results of previous audits, whether the subrecipient has new personnel or new or substantially-changed systems, and the extent and results of federal awarding agency monitoring. Upon our inquiries about these risk factors, BCFNA officials indicated they are not required to consider these other factors in the risk assessments. While federal regulations provide the BCFNA discretion in selecting risk factors to consider, limiting risk assessments to only one risk factor and ignoring other relevant factors hinders the BCFNA 's ability to identify red flags and fraud risk factors and properly assess facility/sponsor risk of noncompliance. Sufficient risk assessments are necessary to ensure monitoring reviews are conducted with adequate frequency to help ensure subrecipient compliance with program requirements. Finding classification This finding is classified as a significant deficiency in internal control and nonmaterial noncompliance with the federal subrecipient monitoring requirements regarding risk assessments. As noted in the finding, BCFNA risk assessments do not meet the spirit of the federal regulation which suggests the extent and level of monitoring for each subrecipient be based on various risk factors. As a result, there is a risk that monitoring reviews will not be performed as frequently and thoroughly as needed to identify and address subrecipient noncompliance. Because the BCFNA does perform risk assessments for each subrecipient and does monitor the subrecipients with lower grades with more frequency, the finding did not rise to a level of material noncompliance, and was therefore considered nonmaterial noncompliance. Our decisions regarding the classification of the internal control deficiencies were made in accordance with AU-C Section 935, Compliance Audits and the AICPA Audit Guide: Government Auditing Standards and Single Audits (Audit Guide). In addition to the definitions outlined in part B of this finding, the Audit Guide states "[a] significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance." Our evaluation of the deficiencies for the possibility and magnitude of potential noncompliance determined the deficiencies are considered a significant deficiency. B. Subrecipient Monitoring Procedures Our review of BCFNA subrecipient monitoring procedures noted areas that should be strengthened and improved. Corrective action plans BCFNA CAP review procedures are not adequate to ensure facilities/sponsors have made or planned sufficient corrective actions to address noncompliance, as required by federal regulations. The Internal Nutritionist Manual requires nutritionists to review subrecipient CAPs outlining corrective actions taken or planned for completeness and to ensure the required action items are adequately addressed. However, this review is generally performed without verifying the accuracy of the CAP information through review of supporting documentation, testing, or other methods. The BCFNA does not require submission of supporting documentation of corrective actions taken or planned. BCFNA officials indicated they may request supporting documentation on occasion depending on the complexity of the finding; and indicated they verify the CAP during 90-day follow-up reviews of Seriously Deficient facilities/sponsors. Of the 60 monitoring reviews in our sample, 51 required a CAP. The monitoring review documentation indicated the CAP was verified during the five 90-day follow-up reviews and one technical assistance review, but there was no documentation that the nutritionist verified the CAP information for any of the remaining 45 reviews (88 percent of the 51 reviews that required a CAP). Furthermore, our review of monitoring review documentation noted numerous instances where the prior year CAP indicated a specific deficiency was addressed, but the same deficiency was again noted in the subsequent review. Regulation 2 CFR Section 200.332(d) provides that monitoring must include following up and ensuring the subrecipient takes timely and appropriate action on all deficiencies identified. The USDA CACFP handbook, Monitoring Handbook for State Agencies (USDA Monitoring Handbook), provides that follow-up reviews (on-site or desk reviews of paperwork) may be conducted any time corrective action is required to ensure the facility/sponsor has completely corrected the review findings, according to their approved corrective action response. Example CAP forms included in the USDA Monitoring Handbook require facilities/sponsors to submit supporting documentation along with the CAP to verify corrections were made or will be implemented. The USDA CACFP handbook, Serious Deficiency, Suspension, & Appeals for State Agencies & Sponsoring Organizations, provides that facilities/sponsors deemed Seriously Deficient must submit additional supporting documentation with the CAP to document that corrective actions have occurred; this might include copies of income eligibility forms, enrollment rosters, staff training documentation, site monitoring reports, menus, child nutrition labels or manufacturers’ product analysis sheets or recipes, attendance records, meal count forms, and itemized food receipts. BCFNA officials stated they believe their practices comply with federal regulations. They also stated they believe federal regulations do not require physical verification or review of supporting documentation to verify the CAPs immediately at the time of submission, and following up during the next scheduled review is allowed. Without verifying information in CAPs submitted, the BCFNA cannot demonstrate compliance with federal regulations and lacks assurance the facilities/sponsors took timely and appropriate action on all deficiencies identified during monitoring reviews. In addition, there is increased risk that deficiencies will not be corrected and will continue without detection. Claims testing The Internal Nutritionist Manual and monitoring practices provide for testing of a sample of claims within only 1 test month during each monitoring review, and do not provide for expanded testing when significant errors are identified. BCFNA personnel indicated monitoring reviews are limited to only 1 test month since the USDA Monitoring Handbook does not require expanded testing of records beyond 1 month. While the BCFNA performs additional testing during 90-day follow-up reviews for facilities/sponsors deemed Seriously Deficient, additional testing is not performed in any other situation. For example, one facility had a 43% overpayment rate and received a B grade and another facility had a 29% overpayment rate and received a B- grade; however, additional testing was not performed for either facility and subsequent monitoring was not yet scheduled for 2 years and 1 year, respectively. The USDA Monitoring Handbook suggests testing activities during 1 test month, and also suggests the state agency may determine additional review is warranted and review records beyond the test month to determine the extent of the noncompliance. When significant errors are identified, additional testing would help BCFNA nutritionists determine the extent that instances of noncompliance are isolated versus pervasive. Such information would be valuable to the overall conclusions and grade assigned to the review, and in decisions regarding subsequent monitoring. Overclaim recoupment BCFNA subrecipient monitoring procedures do not provide for identification and pursuit of recoupment of all overpayments associated with errors identified during monitoring reviews. When overclaims due to noncompliance with eligibility requirements are identified during monitoring reviews, the BCFNA only identifies and seeks recoupment for the overclaims made during the test month. Overclaims associated with eligibility errors begin at the time the eligibility determination was made and continue until the error is discovered. Although the BCFNA is aware noncompliance occurred during the month(s) before the test month, the BCFNA does not attempt to identify those overclaims. In addition, when a facility/sponsor is terminated, the BCFNA does not always identify or seek recoupment of overclaim amounts. In our sample of 60 monitoring reviews, contracts for 2 sponsors were terminated as a result of a 90-day follow-up review. For these 2 sponsors, in the reviews prior to the 90-day follow-up reviews, the BCFNA identified and recouped significant overclaims ($21,998, or 99 percent of total claims tested for one sponsor; and $3,501, or 64 percent, for the other sponsor). In the subsequent 90-day follow-up reviews for these 2 sponsors, significant claim errors were identified in the test month claims, which totaled $12,445; however, the test month claims were not fully tested, and overclaims were not identified or recouped. Any overclaims not identified and recouped from these 2 terminated sponsors would be considered questioned costs; however, those questioned costs are unknown. BCFNA officials indicated they do not pursue recoupment of overclaims beyond the test month because this practice is allowed by the USDA. They indicated they pursue recoupment of overclaims for facilities/sponsors with terminated contracts on a case-by-case basis, considering various factors. However, 7 CFR Section 226.14 provides that state agencies shall disallow and recover any portion of a claim for reimbursement not properly payable, including claims not made in accordance with recordkeeping requirements. Pursuing full recoupment would hold facilities/sponsors accountable for all overclaims and would serve as a deterrent to future errors, noncompliance, and overclaims. Furthermore, without procedures to identify and recoup all overclaims, there is a risk that significant overclaims will go undetected and unrecouped, and questioned costs could be significant. Conclusions In addition to complying with federal requirements, strong subrecipient monitoring procedures are necessary to ensure facilities/sponsors comply with program requirements, submit proper claims, and address deficiencies identified. Without strong internal controls, there is increased risk of noncompliance, errors, fraud, waste, and abuse of federal funds. Strong monitoring procedures would ensure facilities/sponsors are held accountable for and correct errors and noncompliance identified. The BCFNA should enhance procedures to provide for verification of CAPs and identification and recoupment of overclaims associated with all errors identified during monitoring reviews, as required by federal regulations; and expand testing when significant errors are identified. Regulation 2 CFR Section 200.332(g) requires pass-through entities to consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. Furthermore, 2 CFR Section 200.303(a) requires the non-federal entity to "[e]stablish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing that Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission." Finding classification This finding is classified as a material weakness in internal control and material noncompliance with the federal subrecipient monitoring requirements. Our audit of the BCFNA's compliance with federal subrecipient monitoring requirements concluded the BCFNA did not materially comply with federal requirements to ensure subrecipients effectively operate the CACFP and to monitor the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This conclusion is based on the facts, deficiencies, and noncompliance stated in the finding, including the following: 1) Disbursements to subrecipients represented approximately 98 percent of the CACFP expenditures. 2) BCFNA subrecipient monitoring reviews identified significant errors, noncompliance, disallowances, and overclaims; and deficiencies identified often continued for years with little improvement from review to review. The 11 percent subrecipient payment error rate identified by the BCFNA, which exceeds our audit materiality threshold of 4 percent, along with the high rate of continued noncompliance, serve as indicators of the effectiveness or ineffectiveness of the BCFNA monitoring process. 3) The BCFNA did not comply with specific components of federal subrecipient monitoring requirements, including properly following up and ensuring subrecipients take timely and appropriate action on all deficiencies identified and disallowing and recovering improper payments. 4) Multiple deficiencies in monitoring procedures were identified, including the previously-listed deficiencies and inadequate payment testing. In conducting a single audit in accordance with 2 CFR Part 200 (Uniform Guidance), auditors are required by 2 CFR Section 200.514(d)(1)(2), to determine whether the auditee has complied with federal statutes, regulations, and the terms and conditions of federal awards that may have a direct and material effect on each of its major programs, as outlined in the OMB Compliance Supplement. While compliance with the USDA CACFP handbooks was considered in the our audit, our conclusion on compliance is based on the BCFNA's compliance with the federal statutes and regulations, as required. Our decisions regarding the classification of the internal control deficiencies were made in accordance with AU-C Section 935, Compliance Audits and the Audit Guide. The Audit Guide provides the following definitions regarding internal control deficiencies: "A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis." "A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis." "A reasonable possibility exists when the likelihood of the event is either reasonably possible or probable…" Reasonably possible is "[t]he chance of the future event or events occurring is more than remote but less than likely." Probable means "[t]he future event or events are likely to occur." The failure to design and implement adequate controls and procedures over subrecipient monitoring led to material noncompliance with the subrecipient monitoring requirements. The BCFNA's controls failed to develop an effective subrecipient monitoring process that ensures subrecipients use subawards for authorized purposes, comply with the terms and conditions of the subawards, and achieve performance goals. Because the internal control deficiencies have not been corrected, it is probable that the material noncompliance will continue. For these reasons, the deficiencies are considered a material weakness. Recommendations The DHSS through the BCFNA: A. Implement a CACFP subrecipient risk assessment process that is consistent with federal regulations. B. Review, strengthen, and enforce subrecipient monitoring procedures to ensure CACFP facilities/sponsors comply with program requirements, submit proper claims, and address deficiencies identified. The BCFNA should enhance procedures to provide for verification of CAP information and identification and recoupment of overclaims associated with all errors identified during monitoring reviews, as required by federal regulations; and expand testing when significant errors are identified. The DHSS should identify and recoup the overclaims for the 2 terminated sponsors noted in this finding. Auditee's Response A. We disagree with the auditor's finding. Our Corrective Action Plan includes an explanation and specific reasons for our disagreement. B. We disagree with the auditor's finding. Our Corrective Action Plan includes an explanation and specific reasons for our disagreement. Auditor's Comment Finding A. The DHSS Corrective Action Plan (CAP) states the DHSS disagrees with the State Auditor's Office (SAO) recommendation because they believe the BCFNA risk assessment process considers relevant information and complies with the substance and spirit of the federal regulations. During the audit, BCFNA officials stated their risk assessments consider only one risk factor because they are not required to consider all suggested risk factors outlined in 2 CFR Section 200.332(b). However, in their CAP, the DHSS claims the BCFNA formal risk assessment process considers all suggested risk factors. During our audit, the documented risk assessments completed by DHSS for the 58 sampled subrecipients showed the BCFNA only considered one risk factor, and did not consider other pertinent risk factors outlined in 2 CFR Section 200.332(b) which contradicts the DHSS position presented in their CAP. Additionally, the CAP indicates considerations for new personnel or systems are made during onsite monitoring visits; however, 2 CFR Section 200.332(b) requires these considerations to be evaluated prior to the monitoring visit as part of the risk assessment process. Finding B. The DHSS CAP states the DHSS disagrees with the SAO's recommendation that monitoring procedures should be strengthened. The CAP states the DHSS believes the BCFNA has a strong system of internal controls over subrecipient monitoring documented in the Internal Nutritionist Manual and believes these controls are in compliance with federal regulations. However, in making these statements, the DHSS has failed to recognize and acknowledge existing subrecipient monitoring procedures have allowed serious and material subrecipient noncompliance. As part of its pass-through responsibilities outlined in the federal regulations, the BCFNA is required to ensure subrecipients comply with federal regulations and terms and conditions of the subaward, and effectively operate the program. Given the level of material subrecipient noncompliance that has occurred and continues to occur, BCFNA subrecipient monitoring procedures are clearly not sufficient to prevent future noncompliance. The BCFNA has focused on individual components of its systems, but has not holistically evaluated whether the procedures, collectively and in their entirety, comply with the federal subrecipient monitoring requirements. The BCFNA continues to strictly follow existing procedures without making adequate adjustments to address and mitigate the serious subrecipient problems. Recognizing problems and reacting to those problems are critical components of an effective internal control system designed to ensure compliance with the federal requirements. The finding addresses three specific aspects of the BCFNA subrecipient monitoring program that could be strengthened to help bring the BCFNA into overall compliance with federal subrecipient monitoring requirements. Some individual processes are not in compliance with federal regulations and some could be improved by doing more than what is minimally required. The DHSS CAP argues they are in full compliance with each of these aspects and no improvements are needed. Corrective action plans The DHSS CAP claims the BCFNA process to verify subrecipient CAPs during the next scheduled review is in compliance with federal regulations which require the BCFNA to ensure subrecipients take timely and appropriate action. While verifications performed during 90-day follow up reviews would be considered timely, for verifications conducted 6 months to 3 years after receipt of the subrecipient CAP, it is impossible for the BCFNA to ensure corrective action was taken within timeframes indicated in the subrecipient CAP or to demonstrate compliance with this monitoring requirement. The DHSS CAP claims this process is in accordance with USDA regulations; however, as noted in the finding, USDA guidance suggests the BCFNA perform follow up reviews to ensure the subrecipient has completely corrected the review findings. When follow up reviews are not performed timely, the BCFNA has no assurance that subrecipients are in compliance with their CAPs. Claims testing The DHSS CAP claims BCFNA procedures are adequate since they comply with the minimum USDA guidance for testing claims. The CAP further claims the Internal Nutritionist Manual allows for, and the BCFNA conducts, expanded testing beyond the test month when warranted. However, the manual does not mention testing beyond the test month, and no expanded testing was performed for any of the 60 sampled monitoring reviews. The finding notes instances where subrecipients had significant overpayment rates (43% and 29%), yet no additional testing was performed and subsequent monitoring was not scheduled for 1 or 2 years. This indicates the DHSS claims testing could be improved to ensure compliance with subrecipient monitoring responsibilities. Overclaim recoupment The DHSS CAP claims the BCFNA practice to pursue recoupment of overclaims for only the test month is adequate since this minimum practice is allowed by the USDA. This practice could be viewed as an incentive for subrecipients to intentionally overclaim meals, knowing that only 1 month of overclaims (out of a period up to 3 years since the last monitoring review) would be subject to repayment. The CAP also claims recoupment of overclaims is pursued for subrecipients with terminated contracts on a case-by-case basis; however, such recoupment was not pursued for the 2 applicable sampled reviews with significant claims errors identified in the test month. Without pursuing recoupment of overclaims, the BCFNA is not in compliance with 7 CFR Section 226.14 and lacks strong policies for deterring future noncompliance and overclaims. The DHSS CAP argues the 11 percent error rate, based on the sample of monitoring reviews performed during the year ended June 30, 2023, is inflated because the reviews are proportionally more likely to include a higher number of claims with discrepancies. However, this error rate is just one indicator of the serious ongoing subrecipient problems. The DHSS CAP includes various misrepresentations of the contents of the finding. These statements, which attempt to negate or reduce the significance of the noncompliance noted in the finding, are listed below (in quotes): 1) "The SAO has not noted any specific noncompliance with federal requirements regarding subrecipient monitoring." This statement is incorrect. The finding states the BCFNA did not comply with overall subrecipient monitoring requirements as well as specific components of those requirements, including properly following up and ensuring subrecipients take timely and appropriate action on all deficiencies identified and disallowing and recovering improper payments. 2) "Out of the SAO's test sample of 60 monitoring reviews, only 9 of the overclaims were over the $600 threshold of acceptable risk set by the USDA." This statement is incorrect. Of the 36 sampled monitoring reviews with overclaims totaling $50,954, 13 reviews with overclaims totaling $46,724, were in excess of $600. As noted in the finding, if the remaining 23 overpayments of $600 or less, totaling $4,230 are excluded, the error rate is at least 9 percent. Subrecipient data clearly shows significant subrecipient noncompliance is occurring within the CACFP program. These problems cannot be denied and should not be ignored. Until the DHSS recognizes these problems, acknowledges there are weaknesses in its existing procedures, and takes action to strengthen its procedures, significant subrecipient noncompliance will likely continue.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Federal Assistance Listing No. 94.006 AmeriCorps State and National Material weakness over Activities Allowed or Unallowed and Allowable Costs/Cost Principle (Payroll) Repeat Finding: No Condition: For 25 out of 25 payroll selections, we did not receive support to test that payroll charges to the AmeriCorps and ARPA programs were for actual time and effort spent on the grant. 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. In accordance with 2 CFR 200.430: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: BCI did not have proper controls in place to ensure that payroll activities charged were based on actual work performed on the grant. Effect: BCI is not in compliance with activities allowed and allowable costs (payroll) requirement for the ARPA program. Unallowed payroll costs could be charged to the grant. Questioned Costs: Unknown. Recommendation: We recommend that BCI establish written procedures related to federally funded payroll (partial and full) to ensure the charges are based on time and effort spent working on the grant and implement these procedures immediately. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) 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 a sole source vendor. Also, we were unable to obtain documentation to support BCI entering into contractual agreements with vendors who were not debarred or suspended from doing business with the Federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement 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. 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: BCI 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 Organization does not have adequate documentation on whether they have entered into transactions with eligible entities and is in compliance with Federal guidelines. Questioned Costs: Unknown Recommendation: We recommend the Organization update and follow their controls to identify vendors that should go through the procurement process. We also recommend the Organization follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Federal Assistance Listing No. 94.006 AmeriCorps State and National Material weakness over Activities Allowed or Unallowed and Allowable Costs/Cost Principle (Payroll) Repeat Finding: No Condition: For 25 out of 25 payroll selections, we did not receive support to test that payroll charges to the AmeriCorps and ARPA programs were for actual time and effort spent on the grant. 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. In accordance with 2 CFR 200.430: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: BCI did not have proper controls in place to ensure that payroll activities charged were based on actual work performed on the grant. Effect: BCI is not in compliance with activities allowed and allowable costs (payroll) requirement for the ARPA program. Unallowed payroll costs could be charged to the grant. Questioned Costs: Unknown. Recommendation: We recommend that BCI establish written procedures related to federally funded payroll (partial and full) to ensure the charges are based on time and effort spent working on the grant and implement these procedures immediately. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Federal Assistance Listing No. 94.006 AmeriCorps State and National Material weakness over Activities Allowed or Unallowed and Allowable Costs/Cost Principle (Payroll) Repeat Finding: No Condition: For 25 out of 25 payroll selections, we did not receive support to test that payroll charges to the AmeriCorps and ARPA programs were for actual time and effort spent on the grant. 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. In accordance with 2 CFR 200.430: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: BCI did not have proper controls in place to ensure that payroll activities charged were based on actual work performed on the grant. Effect: BCI is not in compliance with activities allowed and allowable costs (payroll) requirement for the ARPA program. Unallowed payroll costs could be charged to the grant. Questioned Costs: Unknown. Recommendation: We recommend that BCI establish written procedures related to federally funded payroll (partial and full) to ensure the charges are based on time and effort spent working on the grant and implement these procedures immediately. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425U, Department of Education, Education Stabilization Fund (ESSER II, TCLAS ESSER III, ARP ESSER III) Federal Award Identification Number and Year: 20521001015809, 20521001057810 Pass-through Entity – Texas Education Agency Finding Type – Material weakness in internal control over compliance Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended August 31, 2023. Cause – Bexar County Academy’s (the “Academy”) books and records for the 2023 fiscal year were not reconciled and closed in a timely manner. Effect – The data collection form was not submitted within the required time as required by 2 CFR 200.512. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – The Academies will develop a reliable system that will lead to the timely processing of the financial records by reviewing existing procedures to identify bottlenecks and areas of improvement. Feedback will be gathered from team members involved in the financial record keeping process so that standard procedures can be development and implemented. Furthermore, opportunities to automate processes and use software to assist with data entry, record reconciliation, and reporting can be used. This will significantly decrease manual workload and improve accuracy and timeliness.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425U, Department of Education, Education Stabilization Fund (ESSER II, TCLAS ESSER III, ARP ESSER III) Federal Award Identification Number and Year: 20521001015809, 20521001057810 Pass-through Entity – Texas Education Agency Finding Type – Material weakness in internal control over compliance Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended August 31, 2023. Cause – Bexar County Academy’s (the “Academy”) books and records for the 2023 fiscal year were not reconciled and closed in a timely manner. Effect – The data collection form was not submitted within the required time as required by 2 CFR 200.512. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – The Academies will develop a reliable system that will lead to the timely processing of the financial records by reviewing existing procedures to identify bottlenecks and areas of improvement. Feedback will be gathered from team members involved in the financial record keeping process so that standard procedures can be development and implemented. Furthermore, opportunities to automate processes and use software to assist with data entry, record reconciliation, and reporting can be used. This will significantly decrease manual workload and improve accuracy and timeliness.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425U, Department of Education, Education Stabilization Fund (ESSER II, TCLAS ESSER III, ARP ESSER III) Federal Award Identification Number and Year: 20521001015809, 20521001057810 Pass-through Entity – Texas Education Agency Finding Type – Material weakness in internal control over compliance Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended August 31, 2023. Cause – Bexar County Academy’s (the “Academy”) books and records for the 2023 fiscal year were not reconciled and closed in a timely manner. Effect – The data collection form was not submitted within the required time as required by 2 CFR 200.512. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – The Academies will develop a reliable system that will lead to the timely processing of the financial records by reviewing existing procedures to identify bottlenecks and areas of improvement. Feedback will be gathered from team members involved in the financial record keeping process so that standard procedures can be development and implemented. Furthermore, opportunities to automate processes and use software to assist with data entry, record reconciliation, and reporting can be used. This will significantly decrease manual workload and improve accuracy and timeliness.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.
2 CFR 200.501 requires a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. 2 CFR §200.512(a)(2) states that an audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). 2 CFR Subpart F §200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Academy’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Academy’s internal control procedures did not identify expenses sufficiently to identify the need for a Single Audit. The Schedule has been presented in this report. Noncompliance with grant requirements as well as errors and omissions on the Schedule could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.