FAC Explorer

Finding 39928 (2022-008)

Significant Deficiency
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2023-03-23
Audit: 40897
Organization: State of Hawaii, Department of Accounting and General Services (HI)
Auditor: Accuity LLP

AI Summary

  • Core Issue: The State delayed disbursing federal funds, with two instances exceeding 25 days, totaling about $15,500,000.
  • Impacted Requirements: This delay violates 31 CFR Section 205.33, which mandates minimizing the time between receiving and disbursing federal funds.
  • Recommended Follow-Up: Program management should reach out to the awarding agency for best practices in cash management to improve compliance.

Finding Text

See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined three haphazardly selected cash disbursements and identified two instances totaling approximately $15,500,000 in which the time elapsing between the receipt of federal award and the disbursement was greater than 25 days. While the expenditures were allowable costs under the grant, it does not appear the State disbursed these federal advances as soon as administratively feasible. Criteria 31 CFR Section 205.33 requires the State to minimize the time between the receipt of federal funds from the federal government and the State?s disbursement of the funds for federal program purposes. Therefore, the timing and amount of funds being requested and received must be as close as administratively feasible to the State?s actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. Based on our testing, we determined 25 days to be a reasonable period of time to disburse cash after receipt from the federal government. Effect Without minimizing time between the drawdown and disbursement of federal funds, the State is not in compliance with federal requirements. Cause and View of Responsible Officials The lag in disbursing the funds was attributed to the U.S. Department of the Treasury providing the State an upfront lump sum advance to administer the program. Recommendation As the exceptions were caused by a lump sum advance provided from the U.S. Department of the Treasury, we recommend that program management contact the awarding agency to obtain best practices for cash management.

Corrective Action Plan

2022-008 ? Cash Management (Significant Deficiency) Governor?s Office care of State Department of Budget and Finance AL Number: 21.026 Program Title: Homeowner Assistance Fund Direct Award from: U.S. Department of Treasury Condition Per 31 CFR Part 205, the State must minimize the time between the drawdown of Federal funds from the Federal government and subsequent disbursement for Federal program purposes. The auditing firm haphazardly tested 3 expenditures of the 7 transactions that occurred in fiscal year 2022 and found that the time between drawdown and disbursement of Federal funds by the State was not minimized. Current Status of Corrective Action Plan Concur. The U.S. Treasury wired Homeowner Assistance Funds (HAF) as a lump sum payment thus B&F did not have to submit a drawdown request to obtain the funds. Since B&F did not have control over the timing of the receipt of the funds, it is unclear how B&F could have complied with the requirement of 31 CFR Part 205 to minimize the timing of the disbursement of the funds. B&F had consulted with the U.S. Treasury on how to best comply with this requirement but has not received a response thus far. Person Responsible Mark K. Anderson, Office of Federal Awards Management, Administrator Anticipated Date of Completion July 1, 2023

Categories

Cash Management Allowable Costs / Cost Principles HUD Housing Programs

Other Findings in this Audit

  • 39921 2022-006
    Material Weakness Repeat
  • 39922 2022-005
    Significant Deficiency
  • 39923 2022-006
    Material Weakness Repeat
  • 39924 2022-005
    Significant Deficiency
  • 39925 2022-007
    Significant Deficiency Repeat
  • 39926 2022-010
    Significant Deficiency
  • 39927 2022-009
    Significant Deficiency
  • 39929 2022-012
    Significant Deficiency
  • 39930 2022-011
    Significant Deficiency
  • 47692 2022-014
    Material Weakness
  • 47693 2022-015
    Significant Deficiency
  • 47694 2022-013
    Material Weakness
  • 47695 2022-016
    Significant Deficiency
  • 616363 2022-006
    Material Weakness Repeat
  • 616364 2022-005
    Significant Deficiency
  • 616365 2022-006
    Material Weakness Repeat
  • 616366 2022-005
    Significant Deficiency
  • 616367 2022-007
    Significant Deficiency Repeat
  • 616368 2022-010
    Significant Deficiency
  • 616369 2022-009
    Significant Deficiency
  • 616370 2022-008
    Significant Deficiency
  • 616371 2022-012
    Significant Deficiency
  • 616372 2022-011
    Significant Deficiency
  • 624134 2022-014
    Material Weakness
  • 624135 2022-015
    Significant Deficiency
  • 624136 2022-013
    Material Weakness
  • 624137 2022-016
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.34B
17.225 Unemployment Insurance $680.40M
21.023 Emergency Rental Assistance Program $166.99M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $100.82M
21.026 Homeowner Assistance Fund $49.98M
12.401 National Guard Military Operations and Maintenance (o&m) Projects $22.54M
64.005 Grants to States for Construction of State Home Facilities $18.82M
84.425C Education Stabilization Fund $12.80M
20.500 Federal Transit_capital Investment Grants $8.20M
12.404 National Guard Challenge Program $5.14M
64.203 State Cemetery Grants $4.41M
10.569 Emergency Food Assistance Program (food Commodities) $4.22M
97.067 Homeland Security Grant Program $4.21M
97.042 Emergency Management Performance Grants $3.61M
15.611 Wildlife Restoration and Basic Hunter Education $3.26M
17.207 Employment Service/wagner-Peyser Funded Activities $2.77M
17.259 Wia Youth Activities $2.71M
15.605 Sport Fish Restoration Program $2.69M
11.419 Coastal Zone Management Administration Awards $2.59M
17.258 Wia Adult Program $2.33M
97.047 Pre-Disaster Mitigation $2.30M
15.615 Cooperative Endangered Species Conservation Fund $2.13M
97.050 Presidential Declared Disaster Assistance to Individuals and Households - Other Needs $1.70M
93.569 Community Services Block Grant $1.63M
15.634 State Wildlife Grants $1.60M
17.278 Wia Dislocated Worker Formula Grants $1.58M
10.565 Commodity Supplemental Food Program $1.46M
17.277 Workforce Investment Act (wia) National Emergency Grants $1.44M
90.404 2018 Hava Election Security Grants $1.40M
45.025 Promotion of the Arts_partnership Agreements $1.40M
17.503 Occupational Safety and Health_state Program $1.36M
11.307 Economic Adjustment Assistance $1.27M
93.558 Temporary Assistance for Needy Families $1.25M
10.664 Cooperative Forestry Assistance $1.16M
17.235 Senior Community Service Employment Program $1.09M
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $1.03M
97.056 Port Security Grant Program $1.02M
11.611 Manufacturing Extension Partnership $856,904
39.003 Donation of Federal Surplus Personal Property $834,139
20.205 Highway Planning and Construction $751,429
15.614 Coastal Wetlands Planning, Protection and Restoration Program $729,205
11.482 Coral Reef Conservation Program $711,410
97.012 Boating Safety Financial Assistance $692,899
10.568 Emergency Food Assistance Program (administrative Costs) $668,841
81.041 State Energy Program $654,716
12.617 Economic Adjustment Assistance for State Governments $634,949
12.114 Collaborative Research and Development $621,184
15.916 Outdoor Recreation_acquisition, Development and Planning $606,984
59.061 State Trade and Export Promotion Pilot Grant Program $595,813
11.472 Unallied Science Program $517,002
11.437 Pacific Fisheries Data Program $483,887
15.904 Historic Preservation Fund Grants-in-Aid $469,244
10.170 Specialty Crop Block Grant Program - Farm Bill $462,455
17.285 Apprenticeship USA Grants $440,286
10.576 Senior Farmers Market Nutrition Program $426,996
17.504 Consultation Agreements $425,311
11.473 Office for Coastal Management $424,790
10.680 Forest Health Protection $401,901
17.801 Jobs for Veterans State Grants $396,935
17.005 Compensation and Working Conditions $382,740
81.087 Renewable Energy Research and Development $377,651
17.245 Trade Adjustment Assistance $336,722
93.568 Low-Income Home Energy Assistance $318,696
16.575 Crime Victim Assistance $316,991
15.657 Endangered Species Conservation ? Recovery Implementation Funds $311,556
11.467 Meteorologic and Hydrologic Modernization Development $297,340
10.525 Farm and Ranch Stress Assistance Network Competitive Grants Program (b) $287,131
93.779 Centers for Medicare and Medicaid Services (cms) Research, Demonstrations and Evaluations $278,779
81.042 Weatherization Assistance for Low-Income Persons $275,023
11.429 Marine Sanctuary Program $261,053
17.002 Labor Force Statistics $247,599
15.670 Adaptive Science $247,028
15.875 Economic, Social, and Political Development of the Territories $218,527
66.605 Performance Partnership Grants $209,061
93.103 Food and Drug Administration_research $198,221
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $195,775
66.460 Nonpoint Source Implementation Grants $188,376
16.034 Coronavirus Emergency Supplemental Funding Program $182,107
17.268 H-1b Job Training Grants $172,833
15.660 Endangered Species - Candidate Conservation Action Funds $155,747
97.132 Financial Assistance for Countering Violent Extremism $155,151
17.271 Work Opportunity Tax Credit Program (wotc) $152,978
30.002 Employment Discrimination State and Local Fair Employment Practices Agency Contracts $151,177
10.676 Forest Legacy Program $139,854
10.675 Urban and Community Forestry Program $136,856
16.606 State Criminal Alien Assistance Program $127,023
10.025 Plant and Animal Disease, Pest Control, and Animal Care $126,736
66.461 Regional Wetland Program Development Grants $124,204
17.804 Local Veterans' Employment Representative Program $122,414
14.401 Fair Housing Assistance Program_state and Local $120,419
97.045 Cooperating Technical Partners $107,135
10.555 National School Lunch Program $104,483
66.001 Air Pollution Control Program Support $99,895
16.839 Stop School Violence $88,643
97.041 National Dam Safety Program $85,289
16.593 Residential Substance Abuse Treatment for State Prisoners $80,356
17.273 Temporary Labor Certification for Foreign Workers $72,728
10.678 Forest Stewardship Program $69,750
11.U01 National Oceanic and Atmosphere Administration Management Support for Hawaiian Islands Humpback Whale, Joint Enforcement Agreement $62,364
84.048A Career and Technical Education Basic Grants to States $59,180
97.023 Community Assistance Program State Support Services Element (cap-Ssse) $58,353
10.553 School Breakfast Program $57,333
90.401 Help America Vote Act Requirements Payments $49,376
11.407 Interjurisdictional Fisheries Act of 1986 $48,000
10.179 Micro-Grants for Food Security Program $43,668
15.608 Fish and Wildlife Management Assistance $42,336
16.738 Edward Byrne Memorial Justice Assistance Grant Program $33,664
11.999 Marine Debris Program $32,984
93.566 Refugee and Entrant Assistance_state Administered Programs $31,837
97.082 Earthquake Consortium $30,641
15.623 North American Wetlands Conservation Fund $30,000
11.452 Unallied Industry Projects $28,450
59.058 Federal and State Technology Partnership Program $28,253
15.944 Natural Resource Stewardship $27,005
10.351 Rural Business Development Grant $26,080
21.016 Equitable Sharing $23,394
10.674 Wood Utilization Assistance $19,446
15.631 Partners for Fish and Wildlife $16,792
16.751 Edward Byrne Memorial Competitive Grant Program $16,734
16.922 Equitable Sharing Program $14,518
10.934 Feral Swine Eradication and Control Pilot Program (c, Z) $12,824
81.119 State Energy Program Special Projects $11,030
10.163 Market Protection and Promotion $6,000
10.162 Inspection Grading and Standardization $5,886
97.008 Non-Profit Security Program $4,805
11.413 Fishery Products Inspection and Certification $4,246
12.400 Military Construction, National Guard $2,042