Federal agency: U.S. Department of the Treasury Federal program title: Coronavirus Capital Projects Fund Assistance Listing (ALN): 21.029 Pass-through agency: State of Delaware Period of performance: Through December 31, 2026 Finding Number: 2024-001 Type of finding: - Significant Deficiency in Internal Control over Compliance, and - Noncompliance with 2 CFR §200.510(b) (SEFA completeness) Criteria or Specific Requirement: - SEFA content and completeness. Under 2 CFR §200.510(b), the auditee must prepare a complete Schedule of Expenditures of Federal Awards (SEFA) listing each federal program by federal agency and ALN, and for subawards, the pass-through entity’s name and identifying number. - Auditor reporting. Audit findings must be reported under 2 CFR §200.516(a) when there is material noncompliance and/or significant deficiencies/material weaknesses related to federal programs. Condition: During the audit, we noted that the Organization’s initial SEFA did not include all federal pass-through awards, including certain U.S. Department of the Treasury – Coronavirus Capital Projects Fund (ALN 21.029) subawards administered by the state of Delaware. The additional federal awards were identified by the auditors and subsequently added to the SEFA prior to report issuance. Questioned Costs: None were identified as part of this finding. Context: The omission was identified during SEFA procedures and major program determination. Because the SEFA is the basis for planning and selecting major programs, initial incompleteness could have affected major program determination and compliance testing. (SEFA must include ALN, pass-through, and award IDs per 2 CFR §200.510(b); audit findings are required to be reported per §200.516(a).) Cause: Controls over SEFA preparation and federal award identification were not sufficient to ensure all pass-through federal awards (including ARPA CPF) were captured with required identifiers (federal agency, ALN 21.029, pass-through name/number) before year-end reporting. Effect: An initially incomplete SEFA increases the risk that: - major programs are not properly identified for testing (§200.518) - the auditor may need to modify the SEFA in-relation-to opinion or compliance opinion if not corrected before report issuance (§200.515). - cause a delay in the audit Repeat Finding: No Recommendation: We recommend management implement (and document) SEFA preparation controls to ensure completeness and accuracy, including: 1. Maintaining a central grant repository containing award documents with federal agency, ALN (21.029), FAIN/prime award, pass-through entity, pass-through ID(s), period of performance, and award amounts. 2. Performing a year-end SEFA reconciliation from the general ledger and grant subledger to the repository, confirming all pass-through awards are captured with required ALN and identifiers per §200.510(b). 3. Obtaining written ALN/FAIN confirmations from pass-through entities for any awards lacking federal identifiers and retaining those confirmations in the grant file. Views of Responsible Officials: Christina Cultural Center experienced a SEFA completeness finding during a year with bookkeeping turnover, which affected the initial compilation of federal award activity. In response, management worked closely with the audit team to confirm the complete listing of awards, validate pass-through entity details, and support accurate SEFA presentation. The organization has also identified cross-training as a key next step to strengthen continuity and reduce key-person dependency going forward.
FINDING 2023-007 Subject: Scope Limitation Compliance Requirements: Schedule of Expenditures of Federal Awards Reporting, Major Program Determination, Auditor's Report on Compliance and Internal Control over Compliance Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 20 TOWN OF WEST TERRE HAUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The Schedule of Expenditures of Federal Awards (SEFA) is required to be fairly stated in relation to the audited financial statements. However, as disclosed in the Independent Auditor's Report in the Financial Statement Audit Report of the Town, sufficient appropriate audit evidence could not be obtained to support the Town's financial statements, resulting in a disclaimer of opinion. Because the SEFA must be audited "in-relation-to" the financial statements, we were likewise unable to obtain sufficient appropriate evidence to determine whether the SEFA was fairly stated as outlined in Finding 2023-002. Due to the inability to audit the SEFA, we could not determine the Town's major federal programs in accordance with the risk-based major program selection requirements of 2 CFR 200.518. Consequently, major programs could not be identified, and thus we did not perform any compliance audit procedures under the Uniform Guidance. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control . . ." 2 CFR 200.1 states in part: ". . . Internal controls for non-Federal entities means: (1) Processes designed and implemented by non-Federal entities to provide reasonable assurance regarding the achievement of objectives in the following categories: (i) Effectiveness and efficiency of operations; (ii) Reliability of reporting for internal and external use; and . . ." 2 CFR 200.508 states in part: "The auditee must: . . . (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with § 200.510. . . ." 2 CFR 200.510(b) states: "Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: INDIANA STATE BOARD OF ACCOUNTS 21 TOWN OF WEST TERRE HAUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services. (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 Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in § 200.414." 2 CFR 200.515(c) states in part: "A report on compliance for each major program and a report on internal control over compliance. This report must describe the scope of testing of internal control over compliance, include an opinion or disclaimer of opinion as to whether the auditee complied with Federal statutes, regulations, and the terms and conditions of Federal awards which could have a direct and material effect on each major program and refer to the separate schedule of findings and questioned costs. . . ." 2 CFR 200.518(a) states: "The auditor must use a risk-based approach to determine which Federal programs are major programs. This risk-based approach must include consideration of: current and prior audit experience, oversight by Federal agencies and pass-through entities, and the inherent risk of the Federal program. The process in paragraphs (b) through (h) of this section must be followed." 2 CFR 200.516(a)(5) states in part: "The circumstances concerning why the auditor's report on compliance for each major program is other than an unmodified opinion. . . ." Cause The disclaimer of opinion on the financial statement did not allow for sufficient appropriate audit evidence to be obtained for the support of the amounts and disclosures in the Town's financial statement. This lack of evidentiary support prevented the performance of required in-relation-to procedures on the SEFA. INDIANA STATE BOARD OF ACCOUNTS 22 TOWN OF WEST TERRE HAUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Because the SEFA is unauditable, major programs could not be determined. Without major program identification, required compliance testing could not be performed. Accordingly, the auditor issued a disclaimer of opinion on compliance for federal awards. Questioned Costs Not applicable. No compliance testing was performed due to the scope limitation. Recommendation The Town should strengthen internal controls over financial reporting and federal award reporting to ensure all information included in the financial statement and the SEFA is complete, accurate, and supported by sufficient appropriate audit evidence. Only with auditable financial statement and an auditable SEFA can major program determination and required compliance testing be performed. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
Finding Number: 2022-001 Federal Program: Education Stabilization Fund Federal Award Identification Number and Year: N/A Assistance Listing Number (ALN): 84.425D, 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Wage Rate Requirements Pass-through Entity: Ohio Department of Education Repeat Finding: No Material Weakness and Material Noncompliance ? Wage Rate Requirements Criteria: 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 CFR ? 200 which states that, in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 29 CFR ? 5.5(a)(3)(ii)(A) requires, in part, that a contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution shall require a clause that the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the appropriate agency if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the agency. Agencies which do not directly Carroll County, Ohio Schedule of Findings and Questioned Costs (continued) 2 CFR Section 200.515 June 30, 2022 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS (Continued) Material Weakness and Material Noncompliance ? Wage Rate Requirements (continued) enter into such contracts shall promulgate the necessary regulations or procedures to require the recipient of the Federal assistance to insert in its contracts the provisions of ? 5.5. Condition: The School District was unable to provide documentation to support compliance with wage rate requirements in relation to an outdoor pavilion project funded with Education Stabilization Funds in the amount of $1,344,969. The School District provided assurances through the Ohio Department of Education?s Comprehensive Continuous Improvement Plan (CCIP) system that it would comply with wage rate requirements for approved contracts, however we noted project agreement did not include provisions for wage rate requirements. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause: Prior administration with the School District did not verify that all necessary contract language was included in the project request for bids, and therefore contractors were not made aware that the wage rate provisions were required. Effect: Without proper controls over wage rate requirements, there is an increased risk that the School District, its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The School District should establish internal controls to include the required clauses of 29 CFR 5.5, particularly those concerning prevailing wage rate and the requirement that the contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the School District, in its requests for quotes or bids for any projects greater than $2,000 that are covered by wage rate requirements. In addition, the District should obtain all necessary information from contractors to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan
Finding Number: 2022-001 Federal Program: Education Stabilization Fund Federal Award Identification Number and Year: N/A Assistance Listing Number (ALN): 84.425D, 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Wage Rate Requirements Pass-through Entity: Ohio Department of Education Repeat Finding: No Material Weakness and Material Noncompliance ? Wage Rate Requirements Criteria: 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 CFR ? 200 which states that, in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 29 CFR ? 5.5(a)(3)(ii)(A) requires, in part, that a contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution shall require a clause that the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the appropriate agency if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the agency. Agencies which do not directly Carroll County, Ohio Schedule of Findings and Questioned Costs (continued) 2 CFR Section 200.515 June 30, 2022 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS (Continued) Material Weakness and Material Noncompliance ? Wage Rate Requirements (continued) enter into such contracts shall promulgate the necessary regulations or procedures to require the recipient of the Federal assistance to insert in its contracts the provisions of ? 5.5. Condition: The School District was unable to provide documentation to support compliance with wage rate requirements in relation to an outdoor pavilion project funded with Education Stabilization Funds in the amount of $1,344,969. The School District provided assurances through the Ohio Department of Education?s Comprehensive Continuous Improvement Plan (CCIP) system that it would comply with wage rate requirements for approved contracts, however we noted project agreement did not include provisions for wage rate requirements. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause: Prior administration with the School District did not verify that all necessary contract language was included in the project request for bids, and therefore contractors were not made aware that the wage rate provisions were required. Effect: Without proper controls over wage rate requirements, there is an increased risk that the School District, its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The School District should establish internal controls to include the required clauses of 29 CFR 5.5, particularly those concerning prevailing wage rate and the requirement that the contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the School District, in its requests for quotes or bids for any projects greater than $2,000 that are covered by wage rate requirements. In addition, the District should obtain all necessary information from contractors to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan
Finding Number: 2022-001 Federal Program: Education Stabilization Fund Federal Award Identification Number and Year: N/A Assistance Listing Number (ALN): 84.425D, 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Wage Rate Requirements Pass-through Entity: Ohio Department of Education Repeat Finding: No Material Weakness and Material Noncompliance ? Wage Rate Requirements Criteria: 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 CFR ? 200 which states that, in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 29 CFR ? 5.5(a)(3)(ii)(A) requires, in part, that a contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution shall require a clause that the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the appropriate agency if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the agency. Agencies which do not directly Carroll County, Ohio Schedule of Findings and Questioned Costs (continued) 2 CFR Section 200.515 June 30, 2022 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS (Continued) Material Weakness and Material Noncompliance ? Wage Rate Requirements (continued) enter into such contracts shall promulgate the necessary regulations or procedures to require the recipient of the Federal assistance to insert in its contracts the provisions of ? 5.5. Condition: The School District was unable to provide documentation to support compliance with wage rate requirements in relation to an outdoor pavilion project funded with Education Stabilization Funds in the amount of $1,344,969. The School District provided assurances through the Ohio Department of Education?s Comprehensive Continuous Improvement Plan (CCIP) system that it would comply with wage rate requirements for approved contracts, however we noted project agreement did not include provisions for wage rate requirements. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause: Prior administration with the School District did not verify that all necessary contract language was included in the project request for bids, and therefore contractors were not made aware that the wage rate provisions were required. Effect: Without proper controls over wage rate requirements, there is an increased risk that the School District, its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The School District should establish internal controls to include the required clauses of 29 CFR 5.5, particularly those concerning prevailing wage rate and the requirement that the contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the School District, in its requests for quotes or bids for any projects greater than $2,000 that are covered by wage rate requirements. In addition, the District should obtain all necessary information from contractors to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan
Finding Number: 2022-001 Federal Program: Education Stabilization Fund Federal Award Identification Number and Year: N/A Assistance Listing Number (ALN): 84.425D, 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Wage Rate Requirements Pass-through Entity: Ohio Department of Education Repeat Finding: No Material Weakness and Material Noncompliance ? Wage Rate Requirements Criteria: 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 CFR ? 200 which states that, in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 29 CFR ? 5.5(a)(3)(ii)(A) requires, in part, that a contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution shall require a clause that the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the appropriate agency if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the agency. Agencies which do not directly Carroll County, Ohio Schedule of Findings and Questioned Costs (continued) 2 CFR Section 200.515 June 30, 2022 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS (Continued) Material Weakness and Material Noncompliance ? Wage Rate Requirements (continued) enter into such contracts shall promulgate the necessary regulations or procedures to require the recipient of the Federal assistance to insert in its contracts the provisions of ? 5.5. Condition: The School District was unable to provide documentation to support compliance with wage rate requirements in relation to an outdoor pavilion project funded with Education Stabilization Funds in the amount of $1,344,969. The School District provided assurances through the Ohio Department of Education?s Comprehensive Continuous Improvement Plan (CCIP) system that it would comply with wage rate requirements for approved contracts, however we noted project agreement did not include provisions for wage rate requirements. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause: Prior administration with the School District did not verify that all necessary contract language was included in the project request for bids, and therefore contractors were not made aware that the wage rate provisions were required. Effect: Without proper controls over wage rate requirements, there is an increased risk that the School District, its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The School District should establish internal controls to include the required clauses of 29 CFR 5.5, particularly those concerning prevailing wage rate and the requirement that the contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the School District, in its requests for quotes or bids for any projects greater than $2,000 that are covered by wage rate requirements. In addition, the District should obtain all necessary information from contractors to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan
Finding Number: 2022-001 Federal Program: Education Stabilization Fund Federal Award Identification Number and Year: N/A Assistance Listing Number (ALN): 84.425D, 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Wage Rate Requirements Pass-through Entity: Ohio Department of Education Repeat Finding: No Material Weakness and Material Noncompliance ? Wage Rate Requirements Criteria: 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 CFR ? 200 which states that, in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 29 CFR ? 5.5(a)(3)(ii)(A) requires, in part, that a contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution shall require a clause that the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the appropriate agency if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the agency. Agencies which do not directly Carroll County, Ohio Schedule of Findings and Questioned Costs (continued) 2 CFR Section 200.515 June 30, 2022 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS (Continued) Material Weakness and Material Noncompliance ? Wage Rate Requirements (continued) enter into such contracts shall promulgate the necessary regulations or procedures to require the recipient of the Federal assistance to insert in its contracts the provisions of ? 5.5. Condition: The School District was unable to provide documentation to support compliance with wage rate requirements in relation to an outdoor pavilion project funded with Education Stabilization Funds in the amount of $1,344,969. The School District provided assurances through the Ohio Department of Education?s Comprehensive Continuous Improvement Plan (CCIP) system that it would comply with wage rate requirements for approved contracts, however we noted project agreement did not include provisions for wage rate requirements. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause: Prior administration with the School District did not verify that all necessary contract language was included in the project request for bids, and therefore contractors were not made aware that the wage rate provisions were required. Effect: Without proper controls over wage rate requirements, there is an increased risk that the School District, its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The School District should establish internal controls to include the required clauses of 29 CFR 5.5, particularly those concerning prevailing wage rate and the requirement that the contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the School District, in its requests for quotes or bids for any projects greater than $2,000 that are covered by wage rate requirements. In addition, the District should obtain all necessary information from contractors to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan
Finding Number: 2022-001 Federal Program: Education Stabilization Fund Federal Award Identification Number and Year: N/A Assistance Listing Number (ALN): 84.425D, 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Wage Rate Requirements Pass-through Entity: Ohio Department of Education Repeat Finding: No Material Weakness and Material Noncompliance ? Wage Rate Requirements Criteria: 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 CFR ? 200 which states that, in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 29 CFR ? 5.5(a)(3)(ii)(A) requires, in part, that a contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution shall require a clause that the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the appropriate agency if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the agency. Agencies which do not directly Carroll County, Ohio Schedule of Findings and Questioned Costs (continued) 2 CFR Section 200.515 June 30, 2022 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS (Continued) Material Weakness and Material Noncompliance ? Wage Rate Requirements (continued) enter into such contracts shall promulgate the necessary regulations or procedures to require the recipient of the Federal assistance to insert in its contracts the provisions of ? 5.5. Condition: The School District was unable to provide documentation to support compliance with wage rate requirements in relation to an outdoor pavilion project funded with Education Stabilization Funds in the amount of $1,344,969. The School District provided assurances through the Ohio Department of Education?s Comprehensive Continuous Improvement Plan (CCIP) system that it would comply with wage rate requirements for approved contracts, however we noted project agreement did not include provisions for wage rate requirements. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause: Prior administration with the School District did not verify that all necessary contract language was included in the project request for bids, and therefore contractors were not made aware that the wage rate provisions were required. Effect: Without proper controls over wage rate requirements, there is an increased risk that the School District, its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The School District should establish internal controls to include the required clauses of 29 CFR 5.5, particularly those concerning prevailing wage rate and the requirement that the contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the School District, in its requests for quotes or bids for any projects greater than $2,000 that are covered by wage rate requirements. In addition, the District should obtain all necessary information from contractors to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan
Condition: The Bureau did not submit its Single Audit reporting package for the year ended June 30, 2021 to the Federal Audit Clearinghouse within the timeframe required by 2 CFR 200.512(a), submitting well after the nine-month deadline. Criteria: 2 CFR 200.512 requires recipients to submit the complete reporting package—including the financial statements and SEFA (200.510), summary schedule of prior audit findings (200.511), auditor’s reports (200.515), and corrective action plan (200.511(c))—to the FAC within 30 days of the auditor’s report or nine months after year-end. Context: While the Bureau filed timely for FY 2014–2015, it has repeatedly failed to meet filing deadlines since FY 2016; FY 2016 was submitted nearly two years late, FY 2017 was delayed but covered by FEMA administrative relief, and the reporting packages for FY 2018, FY 2019, and FY 2020 were submitted significantly past statutory limits. FY 2021 continued this pattern of late submission, indicating ineffective controls over the audit reporting timeline. Cause: The delay is related to systemic weaknesses in financial management and reporting processes described in Finding 2021-001, including the absence of an integrated financial system and excessive reliance on Excel spreadsheets, which hinder timely reconciliation, compilation, and audit preparation. Effect: Failure to comply with reporting deadlines may subject the Bureau to federal sanctions, including withholding or disallowance of indirect costs, suspension of funding until audit submission is complete, or termination of federal awards; repeated delinquency also undermines the Bureau’s credibility with federal agencies. Questioned Costs: None. Recommendation: Implement a formalized audit and reporting calendar to ensure required documents are compiled and ready for audit by March 31 each year, establish an integrated system supporting timely reporting, assign responsibility for monitoring the Single Audit submission timeline, and conduct periodic status reviews to ensure timely submission to the FAC under Uniform Guidance requirements. Management Response: See corrective action plan.