Finding Text
Program Information: Assistance Listing #: 21.027 U.S. Department of the Treasury COVID-19 American Rescue Plan Act - 2021 Award Numbers: SLFRP3186, SLFRP4785 Award Periods: 8/13/2021 - 12/31/2026, 6/4/2021 - 12/31/2026 Criteria: Recipients may use payments from SLFRF to replace lost public sector revenue to provide government services. Recipients may use this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic. Under the 2022 Final Rule, recipients can elect a one-time “standard allowance” of $10 million (not to exceed the recipient’s award amount) to spend on the “provision of government services” during the period of performance. Alternatively, recipients can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the 2022 Final Rule to determine the amount of SLFRF funds that can be used for the “provision of government services.” In calculating revenue loss, recipients can choose whether to use calendar or fiscal year dates but must be consistent throughout the period of performance. If calculating revenue loss, recipients must provide auditors with evidence supporting their revenue loss calculation. 2 CFR § 200.303 - Internal controls states, the non-federal entity must: (a) 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 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 (COSO). Condition/Context: During testing, we noted the following: 21.027 • The Tribe was unable to provide documentation demonstrating that the required Annual Project and Expenditure Report was prepared and submitted. Additionally, the Tribe was unable to provide documentation supporting the calculation of revenue loss used to support expenditures reported under the revenue replacement provision. [ X ] Compliance Finding [ X ] Significant Deficiency [ ] Material Weakness Cause: The Tribe did not retain copies of the required performance reports, and procedures for maintaining federal reporting documentation were not consistently followed. Turnover in management likely contributed to the lack of record retention. Effect: The lack of retained documentation increases the risk that required reports may not be submitted accurately or timely and that expenditures reported under the revenue replacement provision may not be adequately supported. As a result, the Tribe may be unable to demonstrate compliance with applicable Federal requirements and amounts reported to the Federal awarding agency may be subject to additional review or potential disallowance. Questioned Costs: None noted. The lack of documentation demonstrating preparation and submission of the Annual Project and Expenditure Report did not result in identifiable questioned costs. Additionally, aince the Tribe was unable to provide documentation supporting the revenue loss calculation used to substantiate the amount reported under the revenue replacement provision. Accordingly, we were unable to determine whether any questioned costs were associated specifically with the revenue replacement calculation. Repeat Finding: No. Recommendation: We recommend the Tribe implement a formal process to track required federal reporting deadlines and ensure that copies of all submitted reports are maintained in the grant files. This may include establishing a reporting calendar, designating a responsible staff member to complete and retain the reports, and implementing a supervisory review to ensure compliance. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.