FAC Explorer

Finding 1161259 (2022-045)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2025-10-22
Audit: 371187
Organization: Commonwealth of the Northern Mariana Islands (MP)
Auditor: ERNST & YOUNG (CNMI) INC

AI Summary

  • Core Issue: A duplicate payment of $99,924 was made under the Hazard Mitigation Grant, violating allowable costs regulations.
  • Impacted Requirements: Noncompliance with 2 CFR 200.1 regarding improper payments, including payments to ineligible recipients and duplicate payments.
  • Recommended Follow-Up: CNMI management should enhance recordkeeping and monitoring controls to prevent future improper payments and ensure compliance with cost principles.

Finding Text

Finding No. 2022-045 Federal Agency: U.S. Department of Homeland Security AL Program: 97.039 Hazard Mitigation Grant Federal Award No.: DR-4235 Area: Allowable Costs/Cost Principles Questioned Costs: $99,924 Criteria: Grantees are required to ensure that payments made under the grant are not improper payments as defined under 2 CFR 200.1. Improper payments means a payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. The term improper payment includes: any payment to an ineligible recipient; any payment for an ineligible good or service; any duplicate payment; any payment for a good or service not received, except for those payments where authorized by law; any payment that is not authorized by law; and any payment that does not account for credit for applicable discounts. Condition: Of thirty-six nonpayroll expenditures tested, aggregating $3,932,053 of a total population of $4,097,083, one (or 3%) (under business unit M4235, object account no. 8812210002, contract no. 704583-OC, amounting to $99,924) was recorded twice in the general ledger and was requested for reimbursement twice under the Federal award on December 22, 2021 and on January 18, 2022, for which the amount is questioned. Cause: CNMI did not effectively enforce recordkeeping controls and perform monitoring controls over compliance with applicable allowable costs/cost principles requirements. Effect: CNMI is in noncompliance with applicable allowable costs/cost principles requirements and questioned costs of $99,924 result. Recommendation: CNMI management should establish a recordkeeping system whereby underlying support is filed accordingly to substantiate costs and management should also strengthen monitoring controls over transactions to substantiate program costs in accordance with applicable allowable costs/cost principles. Views of responsible officials: The Hazard Mitigation Grant Program (HMGP) agrees with this finding. During the audit submission process, HMGP provided the support documents for the journal entries and reversals associated with the $99,923 to the auditor, as requested. However, it was only upon receiving this audit finding, that the discrepancy of a duplicate audit drawdown was called into question. HMGP’s ledger for this project as well as the Munis drawdown history does not indicate a remaining balance of $99,923 and the project related to this finding has already been closed out. To address this audit finding that HMGP received this last week on September 17th, HMGP reached out to the Department of Finance to provide related documents for the drawdowns. Based on the documents provided by DOF, the questioned cost was not a direct result of the duplicate drawdown but as a result of the reverse journal entries made by Tyler Munis staff in an effort to correct the duplicate drawdown. HMGP is prepared to provide additional documentation upon request. Additionally, acknowledging that the second debit to construction in August of 2022 for $99,924 was recorded and was not corrected for this project. HMGP will work with DOF to correct the journal entry and return the funds to FEMA. Refer to CNMI’s Corrective Action Plan for additional information.

Corrective Action Plan

Finding No.: 2022-045 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Allowable Costs/Cost Principles Questioned Costs: $99,924 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: The Hazard Mitigation Grant Program (HMGP) agrees with this finding. During the audit submission process, HMGP provided the support documents for the journal entries and reversals associated with the $99,923.27 to the auditor, as requested. However, it was only upon receiving this audit finding # 2022-049, that the discrepancy of a duplicate audit drawdown was called into question. HMGP’s ledger for this project as well as the Munis drawdown history does not indicate a remaining balance of $99,923.73 and the project related to this finding has already been closed out. To address this audit finding that HMGP received this last week on September 17th, HMGP reached out to the Department of Finance to provide related documents for the drawdowns. Based on the documents provided by DOF, the questioned cost was not a direct result of the duplicate drawdown but as a result of the reverse journal entries made by Tyler Munis staff in an effort to correct the duplicate drawdown. HMGP accurately completed all required steps to process and provided the necessary justification to process a total of $99,923.73 for professional services and submitted it to DOF. Based on the supporting documents, the $99,923.73 was comprised of: • $53,451.01- under Request for Payment Application #11, letter reference # GAR22-HM-005 received by DOF on 10/18/2021 and requested to be charged to M142352.62060. • $46,472.72- under Request for Payment Application #12, letter reference # GAR22-HM-031 received by DOF on 11/05/2021 and requested to be charged to M142352.62060. Both HMGP payment application requests show the project string was meant to be charged to 62060 which stands for Professional Services and was submitted to DOF for processing. Since the new Munis financial system portal was launch in the CNMI a month prior, HMGP personnel were not able to enter transactions directly, unlike the current process. However, when the transaction was processed on Munis, it was entered in by a Tyler Munis representative, as identified by the staff initials SMD, who was assigned to assist DOF employees with data input during the transition period and, according to the Munis transaction history, accidentally entered the debit for the $99,923.27 under the Construction project string instead of Professional Services on 12/2/2021. On 12/13/2021, SMD credited the $99,923.27 back to Construction and debited $99,923.27 to Professional Services with Journal entry # 2125. The Munis transaction history also shows various entries and reversals made under the project account that serve to correct the same journal error. HMGP personnel would not be able to review the transactions entered prior to posting, and based on the transaction logs, even after the transactions were posted, HMGP would see that those involved in processing the transactions corrected their errors. Additionally, the supporting documents associated with the drawdowns on Munis display a bank statement with a lumpsum total of various project accounts. Furthermore, most of the journal entries during the time in question either contained the same supporting documents or indicated “access denied” when selected by HMGP personnel with Munis access. The document provided to HMGP on 9/24/2025 indicated the final two transactions related to this expense was entered by Tyler Munis staff on August of 2022. In an effort to reverse the duplicate drawdowns that occurred in Professional Services, SMD reversed the $99,923.27 from professional services labeled as "REV JE 2125 DONE IN ERROR". Journal Entry (JE) 2125 refers to the debit they initially made on 12/13/2021. This credit effectively canceled out and corrected one of the two drawdowns that occurred within the Professional Services Project String. However, on the same day, SMD made a second journal entry reversal under the Construction project string with an identical PA journal comment ""REV JE 2125 DONE IN ERROR."" It is unclear as to why this transaction occurred given that original error under construction was made and corrected on December 2021. Since this incorrect journal entry was made as a debit to construction and the correct journal entry was made as a credit to professional services, the net draw would have been $0. Since $0 worth of funds were paid out and no check was cut as a result, this additional debit would not have been conspicuous to HMGP or the DOF staff. HMGP is prepared to provide the additional documentation upon request. Additionally, acknowledging that the second debit to construction in August of 2022 for $99,923.73 was recorded and was not corrected for this project, HMGP will work with DOF to correct the journal entry and return the funds to FEMA. To address the finding, a significant action step already taken is the transition that occurred in 2024 for agencies to initiate their own drawdowns. This drawdown process ensures HMGP’s direct oversight of all expenditures moving forward to reduce the risk of future duplications. HMGP created an internal drawdown tracker upon DOF’s transition to agency-initiated drawdown requests for 2024 expenses to present. HMGP will work with DOF to correct the journal entry on Munis in relation to the questioned cost and process the return of funds to FEMA. HMGP will create a tracker for all requested transactions made to DOF, such as reversals or corrections if needed as that function cannot be completed on Munis by HMGP. HMGP will review the tracker on a bi-weekly basis to ensure that all MUNIS journal entries and transfers related to HMGP to ensure expenditures are completed accurately and on a timely basis to avoid future misclassifications or duplications. HMGP will continue to ensure that all payments are correctly coded and submitted into Munis with the appropriate documentation and supporting details. HMGP will update the financial management portion of the HMGP standard operating procedures to reflect these action items. Proposed Completion Date: September 30, 2026

Categories

Questioned Costs Allowable Costs / Cost Principles Cash Management Subrecipient Monitoring Eligibility

Other Findings in this Audit

  • 1161189 2022-010
    Material Weakness Repeat
  • 1161190 2022-010
    Material Weakness Repeat
  • 1161191 2022-011
    Material Weakness Repeat
  • 1161192 2022-012
    Material Weakness Repeat
  • 1161193 2022-013
    Material Weakness Repeat
  • 1161194 2022-014
    Material Weakness Repeat
  • 1161195 2022-015
    Material Weakness Repeat
  • 1161196 2022-016
    Material Weakness Repeat
  • 1161197 2022-017
    Material Weakness Repeat
  • 1161198 2022-018
    Material Weakness Repeat
  • 1161199 2022-019
    Material Weakness Repeat
  • 1161200 2022-013
    Material Weakness Repeat
  • 1161201 2022-014
    Material Weakness Repeat
  • 1161202 2022-015
    Material Weakness Repeat
  • 1161203 2022-016
    Material Weakness Repeat
  • 1161204 2022-017
    Material Weakness Repeat
  • 1161205 2022-018
    Material Weakness Repeat
  • 1161206 2022-019
    Material Weakness Repeat
  • 1161207 2022-013
    Material Weakness Repeat
  • 1161208 2022-014
    Material Weakness Repeat
  • 1161209 2022-015
    Material Weakness Repeat
  • 1161210 2022-016
    Material Weakness Repeat
  • 1161211 2022-017
    Material Weakness Repeat
  • 1161212 2022-018
    Material Weakness Repeat
  • 1161213 2022-019
    Material Weakness Repeat
  • 1161214 2022-013
    Material Weakness Repeat
  • 1161215 2022-014
    Material Weakness Repeat
  • 1161216 2022-015
    Material Weakness Repeat
  • 1161217 2022-016
    Material Weakness Repeat
  • 1161218 2022-017
    Material Weakness Repeat
  • 1161219 2022-018
    Material Weakness Repeat
  • 1161220 2022-019
    Material Weakness Repeat
  • 1161221 2022-020
    Material Weakness Repeat
  • 1161222 2022-021
    Material Weakness Repeat
  • 1161223 2022-022
    Material Weakness Repeat
  • 1161224 2022-023
    Material Weakness Repeat
  • 1161225 2022-024
    Material Weakness Repeat
  • 1161226 2022-025
    Material Weakness Repeat
  • 1161227 2022-026
    Material Weakness Repeat
  • 1161228 2022-027
    Material Weakness Repeat
  • 1161229 2022-028
    Material Weakness Repeat
  • 1161230 2022-029
    Material Weakness Repeat
  • 1161231 2022-030
    Material Weakness Repeat
  • 1161232 2022-031
    Material Weakness Repeat
  • 1161233 2022-032
    Material Weakness Repeat
  • 1161234 2022-033
    Material Weakness Repeat
  • 1161235 2022-032
    Material Weakness Repeat
  • 1161236 2022-033
    Material Weakness Repeat
  • 1161237 2022-032
    Material Weakness Repeat
  • 1161238 2022-033
    Material Weakness Repeat
  • 1161239 2022-032
    Material Weakness Repeat
  • 1161240 2022-033
    Material Weakness Repeat
  • 1161241 2022-034
    Material Weakness Repeat
  • 1161242 2022-035
    Material Weakness Repeat
  • 1161243 2022-036
    Material Weakness Repeat
  • 1161244 2022-037
    Material Weakness Repeat
  • 1161245 2022-038
    Material Weakness Repeat
  • 1161246 2022-039
    Material Weakness Repeat
  • 1161247 2022-040
    Material Weakness Repeat
  • 1161248 2022-041
    Material Weakness Repeat
  • 1161249 2022-038
    Material Weakness Repeat
  • 1161250 2022-039
    Material Weakness Repeat
  • 1161251 2022-040
    Material Weakness Repeat
  • 1161252 2022-041
    Material Weakness Repeat
  • 1161253 2022-042
    Material Weakness Repeat
  • 1161254 2022-043
    Material Weakness Repeat
  • 1161255 2022-044
    Material Weakness Repeat
  • 1161256 2022-042
    Material Weakness Repeat
  • 1161257 2022-043
    Material Weakness Repeat
  • 1161258 2022-044
    Material Weakness Repeat
  • 1161260 2022-046
    Material Weakness Repeat
  • 1161261 2022-047
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $243.39M
17.225 UNEMPLOYMENT INSURANCE $49.29M
93.767 CHILDREN'S HEALTH INSURANCE PROGRAM $16.73M
21.023 EMERGENCY RENTAL ASSISTANCE PROGRAM $11.02M
10.542 PANDEMIC EBT FOOD BENEFITS $10.37M
97.030 COMMUNITY DISASTER LOANS $8.04M
93.575 CHILD CARE AND DEVELOPMENT BLOCK GRANT $7.82M
10.539 CNMI NUTRITION ASSISTANCE $7.49M
97.039 HAZARD MITIGATION GRANT $4.56M
21.026 HOMEOWNER ASSISTANCE FUND $4.16M
93.596 CHILD CARE MANDATORY AND MATCHING FUNDS OF THE CHILD CARE AND DEVELOPMENT FUND $2.73M
66.801 HAZARDOUS WASTE MANAGEMENT STATE PROGRAM SUPPORT $2.51M
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $2.44M
66.600 ENVIRONMENTAL PROTECTION CONSOLIDATED GRANTS FOR THE INSULAR AREAS - PROGRAM SUPPORT $2.34M
12.617 ECONOMIC ADJUSTMENT ASSISTANCE FOR STATE GOVERNMENTS $1.85M
20.526 BUSES AND BUS FACILITIES FORMULA, COMPETITIVE, AND LOW OR NO EMISSIONS PROGRAMS $1.74M
11.307 ECONOMIC ADJUSTMENT ASSISTANCE $1.39M
15.605 SPORT FISH RESTORATION $1.32M
15.611 WILDLIFE RESTORATION AND BASIC HUNTER EDUCATION AND SAFETY $1.28M
93.489 CHILD CARE DISASTER RELIEF $1.24M
20.509 FORMULA GRANTS FOR RURAL AREAS AND TRIBAL TRANSIT PROGRAM $1.19M
11.419 COASTAL ZONE MANAGEMENT ADMINISTRATION AWARDS $954,712
93.045 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART C, NUTRITION SERVICES $830,622
97.067 HOMELAND SECURITY GRANT PROGRAM $781,287
97.U01 FEMA-JFO/DRC-Guard Services $661,485
20.600 STATE AND COMMUNITY HIGHWAY SAFETY $644,809
84.126 REHABILITATION SERVICES VOCATIONAL REHABILITATION GRANTS TO STATES $625,444
97.012 BOATING SAFETY FINANCIAL ASSISTANCE $600,225
15.875 ECONOMIC, SOCIAL, AND POLITICAL DEVELOPMENT OF THE TERRITORIES $582,229
93.569 COMMUNITY SERVICES BLOCK GRANT $555,046
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $481,476
15.615 COOPERATIVE ENDANGERED SPECIES CONSERVATION FUND $474,763
93.044 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $452,548
17.277 WIOA NATIONAL DISLOCATED WORKER GRANTS / WIA NATIONAL EMERGENCY GRANTS $444,555
16.034 CORONAVIRUS EMERGENCY SUPPLEMENTAL FUNDING PROGRAM $442,103
16.575 CRIME VICTIM ASSISTANCE $417,507
10.025 PLANT AND ANIMAL DISEASE, PEST CONTROL, AND ANIMAL CARE $409,547
11.482 CORAL REEF CONSERVATION PROGRAM $404,632
17.258 WIOA ADULT PROGRAM $382,903
16.588 VIOLENCE AGAINST WOMEN FORMULA GRANTS $368,487
17.278 WIOA DISLOCATED WORKER FORMULA GRANTS $360,286
15.634 STATE WILDLIFE GRANTS $333,981
17.259 WIOA YOUTH ACTIVITIES $333,058
93.778 MEDICAL ASSISTANCE PROGRAM $318,867
93.434 EVERY STUDENT SUCCEEDS ACT/PRESCHOOL DEVELOPMENT GRANTS $287,347
16.710 PUBLIC SAFETY PARTNERSHIP AND COMMUNITY POLICING GRANTS $282,833
81.041 STATE ENERGY PROGRAM $281,655
81.042 WEATHERIZATION ASSISTANCE FOR LOW-INCOME PERSONS $278,491
10.649 PANDEMIC EBT ADMINISTRATIVE COSTS $258,116
20.218 MOTOR CARRIER SAFETY ASSISTANCE $246,279
12.600 COMMUNITY INVESTMENT $242,221
93.556 MARYLEE ALLEN PROMOTING SAFE AND STABLE FAMILIES PROGRAM $238,819
17.504 CONSULTATION AGREEMENTS $234,374
97.062 SCIENTIFIC LEADERSHIP AWARDS $216,694
17.235 SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM $207,151
15.904 HISTORIC PRESERVATION FUND GRANTS-IN-AID $185,830
64.203 VETERANS CEMETERY GRANTS PROGRAM $175,658
15.663 NFWF-USFWS CONSERVATION PARTNERSHIP $160,217
12.022 DOD MENTOR-PROTEGE PROGRAM $160,121
45.310 GRANTS TO STATES $156,947
16.738 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT PROGRAM $148,552
93.671 FAMILY VIOLENCE PREVENTION AND SERVICES/DOMESTIC VIOLENCE SHELTER AND SUPPORTIVE SERVICES $143,315
16.750 SUPPORT FOR ADAM WALSH ACT IMPLEMENTATION GRANT PROGRAM $135,657
93.590 COMMUNITY-BASED CHILD ABUSE PREVENTION GRANTS $135,591
93.568 LOW-INCOME HOME ENERGY ASSISTANCE $118,439
97.047 BRIC: BUILDING RESILIENT INFRASTRUCTURE AND COMMUNITIES $112,435
11.472 UNALLIED SCIENCE PROGRAM $112,262
93.464 ACL ASSISTIVE TECHNOLOGY $111,566
17.285 REGISTERED APPRENTICESHIP $104,348
93.645 STEPHANIE TUBBS JONES CHILD WELFARE SERVICES PROGRAM $103,317
59.061 STATE TRADE EXPANSION $99,650
10.170 SPECIALTY CROP BLOCK GRANT PROGRAM - FARM BILL $98,021
11.437 PACIFIC FISHERIES DATA PROGRAM $93,960
97.042 EMERGENCY MANAGEMENT PERFORMANCE GRANTS $83,128
45.025 PROMOTION OF THE ARTS PARTNERSHIP AGREEMENTS $79,513
10.664 COOPERATIVE FORESTRY ASSISTANCE $78,427
93.053 NUTRITION SERVICES INCENTIVE PROGRAM $73,223
97.U03 FEMA-IGSA Enhdisasterlegalserv $70,131
11.467 METEOROLOGIC AND HYDROLOGIC MODERNIZATION DEVELOPMENT $64,229
93.048 SPECIAL PROGRAMS FOR THE AGING, TITLE IV, AND TITLE II, DISCRETIONARY PROJECTS $62,557
21.029 CORONAVIRUS CAPITAL PROJECTS FUND $59,975
16.017 SEXUAL ASSAULT SERVICES FORMULA PROGRAM $59,393
10.680 FOREST HEALTH PROTECTION $56,252
97.050 PRESIDENTIAL DECLARED DISASTER ASSISTANCE TO INDIVIDUALS AND HOUSEHOLDS - OTHER NEEDS $44,486
93.747 ELDER ABUSE PREVENTION INTERVENTIONS PROGRAM $42,583
97.008 NON-PROFIT SECURITY PROGRAM $40,698
93.499 LOW INCOME HOUSEHOLD WATER ASSISTANCE PROGRAM $40,185
10.179 MICRO-GRANTS FOR FOOD SECURITY PROGRAM $39,793
93.667 SOCIAL SERVICES BLOCK GRANT $38,860
93.052 NATIONAL FAMILY CAREGIVER SUPPORT, TITLE III, PART E $37,209
16.585 TREATMENT COURT DISCRETIONARY GRANT PROGRAM $36,068
97.U02 FEMA Cost Share For Tinian $34,834
20.703 INTERAGENCY HAZARDOUS MATERIALS PUBLIC SECTOR TRAINING AND PLANNING GRANTS $31,544
90.404 HAVA ELECTION SECURITY GRANTS $30,376
17.273 TEMPORARY LABOR CERTIFICATION FOR FOREIGN WORKERS $29,237
10.766 COMMUNITY FACILITIES LOANS AND GRANTS $27,077
12.300 BASIC AND APPLIED SCIENTIFIC RESEARCH $21,582
93.369 ACL INDEPENDENT LIVING STATE GRANTS $21,096
45.129 PROMOTION OF THE HUMANITIES FEDERAL/STATE PARTNERSHIP $19,840
93.643 CHILDREN'S JUSTICE GRANTS TO STATES $18,435
84.177 REHABILITATION SERVICES INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS WHO ARE BLIND $18,377
66.040 DIESEL EMISSIONS REDUCTION ACT (DERA) STATE GRANTS $17,137
12.113 STATE MEMORANDUM OF AGREEMENT PROGRAM FOR THE REIMBURSEMENT OF TECHNICAL SERVICES $16,417
20.100 AVIATION EDUCATION $14,689
93.669 CHILD ABUSE AND NEGLECT STATE GRANTS $14,311
93.450 EBOLA HEALTHCARE PREPAREDNESS AND RESPONSE FOR SELECT CITIES WITH ENHANCED AIRPORT ENTRANCE SCREENINGS FROM AFFECTED COUNTRIES IN WEST AFRICA $13,717
93.043 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART D, DISEASE PREVENTION AND HEALTH PROMOTION SERVICES $13,076
20.205 HIGHWAY PLANNING AND CONSTRUCTION $12,910
93.630 DEVELOPMENTAL DISABILITIES BASIC SUPPORT AND ADVOCACY GRANTS $11,986
10.U01 DLNR CNMI Fisheries Training $8,033
93.042 SPECIAL PROGRAMS FOR THE AGING, TITLE VII, CHAPTER 2, LONG TERM CARE OMBUDSMAN SERVICES FOR OLDER INDIVIDUALS $7,552
19.976 International Narcotics Control and Law Enforcement $6,973
21.019 CORONAVIRUS RELIEF FUND $5,204
11.454 UNALLIED MANAGEMENT PROJECTS $4,630
11.407 INTERJURISDICTIONAL FISHERIES ACT OF 1986 $4,260
11.016 STATISTICAL, RESEARCH, AND METHODOLOGY ASSISTANCE $3,469
15.657 ENDANGERED SPECIES RECOVERY IMPLEMENTATION $2,790
15.631 PARTNERS FOR FISH AND WILDLIFE $2,755
17.600 MINE HEALTH AND SAFETY GRANTS $2,465
66.442 WATER INFRASTRUCTURE IMPROVEMENTS FOR THE NATION SMALL AND UNDERSERVED COMMUNITIES EMERGING CONTAMINANTS GRANT PROGRAM $852
20.514 PUBLIC TRANSPORTATION RESEARCH, TECHNICAL ASSISTANCE, AND TRAINING $794
93.041 SPECIAL PROGRAMS FOR THE AGING, TITLE VII, CHAPTER 3, PROGRAMS FOR PREVENTION OF ELDER ABUSE, NEGLECT, AND EXPLOITATION $70