Finding Text
2022-004 (2019-010) CASH MANAGEMENT ? Repeated and Modified Federal Agency: U.S. Department of Homeland Security/FEMA Federal Program Title & Assistance Listing Number: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) - 97.036 Emergency Management Performance Grants ? 97.042 Fire Management Assistance Grants ? 97.046 Pre-Disaster Mitigation ? 97.047 Homeland Security Grant Program ? 97.067 Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Questioned Costs: Unknown Condition: During our testing, we noted the Department was not performing timely reimbursement requests of federal awards within the quarterly reporting process. Previously uncollectable amounts have caused a large deficit fund balance to accrue for federal programs. ? All o Fund balance in the Federal Grants Fund (40280) decreased from a deficit of $7,105,386 to a deficit of $11,169,582, a reduction of $4,064,195. Of this reduction, $1,851,874 could not be readily explained, and the majority of this figure likely represents federal expenditures from FY22 or prior that had not been requested as of January 17, 2023. ? Assistance Listing 97.036 o An operating unit was not identified on $50,653 in FY22 expenditures. o 1 of 23 requests tested was for a FY19 expenditure, which had not been disbursed to the subrecipient until FY22. ? Assistance Listing 97.067 o 1 of 17 requests tested was for a FY21 expenditure, which had not been disbursed to the subrecipient until 06/30/2022. o 6 of 17 payments to subrecipients tested were missing pertinent signatures indicating review and approval. o 4 of 17 payments to subrecipients tested lacked adequate supporting documented from the subrecipients for reimbursement. Management?s Progress for Repeated Findings: Management has made significant progress to address the prior year condition relating to the identification of operating units in accounting entries, and in reconciling grant trackers to the general ledger. Management failed to implement adequate controls to resolve other conditions of the finding from the prior years. Criteria: According to ?200.303 Internal controls of 2 CFR Part 200, the non- Federal entity must 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. Specific to the Department, federal reimbursement requests are completed quarterly with the reporting process. Effect: The auditor noted instances of noncompliance. Noncompliance results in possible under or over charges to the grants. Cause: The Department continued to have staff turnover. Also, the Department lacks established internal controls and procedures over financial grant management to ensure the tracking of unbilled amounts and over timely compliance with applicable compliance requirements.