Finding 1181533 (2025-003)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
-
Year
2025
Accepted
2026-03-19

AI Summary

  • Core Issue: The District submitted reimbursement requests totaling $140,757 without proper documentation of eligible expenses.
  • Impacted Requirements: Compliance with CFR 200.305, which mandates that reimbursement requests must be based on accurate expense records.
  • Recommended Follow-Up: Management should improve procedures to ensure reimbursement requests are verified against accurate expense documentation.

Finding Text

Federal Agency: U.S. Department of Transportation Federal Program Name: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Federal Award Identification Number and Year: 2025; FAIN not available. Pass-Through Agency: State of Vermont Agency of Transportation and Tribal Transit Program Pass-Through Numbers: EA#FT202201-704 EA#FT25FLEX-054 EA#FT25FLEX-954 EA#FT23FLEX-954 EA#FT25FLEX-454 EA#FT23FORM-704 EA#FT25FLEX-554 EA#FT24FORM-924 EA#FT25FLEX-854 EA#FT24FORM-934 EA#FT25FLEX-924 Award Period: July 1, 2024 through June 30, 2025 Compliance Requirement: Cash Management Type of Finding: Significant deficiency in internal control over compliance; other matter Criteria or Specific Requirement: The United States Code of Federal Regulations (CFR) 200.305 indicates reimbursement requests must be based on records that accurately reflect expenses being incurred prior to the reimbursement of funds. Condition: We identified the District submitted certain requests for reimbursement which were not supported by documentation of eligible expenses being incurred. Questioned Costs: Questioned costs total $140,757; which represent the total amounts submitted for reimbursement in fiscal year 2025 in excess of eligible expenses incurred. Context: CLA noted two (2) out of five (5) selections were submitted for reimbursement based on inaccurate expense information. The $140,757 represents the total amount of reimbursements submitted during the year based on inaccurate expense information. The expenses for which these reimbursements were submitted are not included in the schedule of expenditures of federal awards. Cause: Procedures were not implemented effectively to ensure invoices submitted for reimbursement were supported by accurate evidence of eligible expenses incurred. Effect: Noncompliance with the requirements of the federal program occurred. Repeat Finding: No. Recommendation: We recommend management enhance procedures and controls to ensure that the reimbursement requests are reconciled to accurate evidence of eligible expenses incurred. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

2025-003-Cash Management MVRTD recognizes this material weakness. Several factors lead to the inaccurate billing noted in the audit. Firstly, it must be noted the during FY25 the MVRTD did not have a financial director on staff and the billing work was being performed by a staff accountant with no previous training in the billing of MVRTD specific grants and no written manuals or instructions were left behind to reference. Due to the fact allocations were set up to be calculated as an automatic entry inside of Passport ( our previous accounting system) and completed outside the system, there were no oversite measures that would have provided a way to prevent or identify duplicate transactions such as the overbilling that occurred. Since July 1, 2025, we have hired a full-time Finance Director and established a new accounting system. We have started using Quick Books Online (QBO), which is a much more detailed and comprehensive accounting system that allows us to be able to identify errors in the billing process and we established an entirely new cost allocation system that is outside of QBO. This ensures an internal and external check and balance system. All invoices and back-up are now being reviewed and approved by the Executive Director. Both the Finance Director and Executive Director will sign off on the invoices before submitting them to the state.

Categories

Cash Management Reporting Significant Deficiency

Other Findings in this Audit

  • 1181523 2025-003
    Material Weakness Repeat
  • 1181524 2025-003
    Material Weakness Repeat
  • 1181525 2025-003
    Material Weakness Repeat
  • 1181526 2025-003
    Material Weakness Repeat
  • 1181527 2025-003
    Material Weakness Repeat
  • 1181528 2025-003
    Material Weakness Repeat
  • 1181529 2025-003
    Material Weakness Repeat
  • 1181530 2025-003
    Material Weakness Repeat
  • 1181531 2025-003
    Material Weakness Repeat
  • 1181532 2025-003
    Material Weakness Repeat
  • 1181534 2025-004
    Material Weakness Repeat
  • 1181535 2025-004
    Material Weakness Repeat
  • 1181536 2025-004
    Material Weakness Repeat
  • 1181537 2025-004
    Material Weakness Repeat
  • 1181538 2025-004
    Material Weakness Repeat
  • 1181539 2025-004
    Material Weakness Repeat
  • 1181540 2025-004
    Material Weakness Repeat
  • 1181541 2025-004
    Material Weakness Repeat
  • 1181542 2025-004
    Material Weakness Repeat
  • 1181543 2025-004
    Material Weakness Repeat
  • 1181544 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
20.509 FORMULA GRANTS FOR RURAL AREAS AND TRIBAL TRANSIT PROGRAM $1.16M
20.526 BUSES AND BUS FACILITIES FORMULA, COMPETITIVE, AND LOW OR NO EMISSIONS PROGRAMS $95,286