American Water Works Association

ederal agency: US Department of Agriculture Federal program title: USDA Technical Assistance and Training Grants Program CFDA Number: 10.761 Award Period: October 1, 2018 through September 30, 2020 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires that when a non-Federal entity plans to enter into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) which is available at https://www.sam.gov/portal/public/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: Management was unable to provide evidence that the Association verified certain vendors were not suspended and debarred prior to the Association entering into covered transactions with those vendors. Questioned costs: None Context: One vendor, out of our sample of four, was found to have no evidence of verification that the vendor was not suspended or debarred. We did later verify that the vendor was not suspended or debarred. Additionally, for three vendors, out of our sample of four, we were unable to review evidence that the Association verified that the vendors were not suspended and debarred prior to date of transactions with the vendors. Cause: The Association did not have a system of controls in place that maintained evidence that vendors were verified as not being suspended or debarred prior to the Association entering into covered transactions with vendors. Effect: A lack of evidence that suspension and debarment procedures were performed over vendors does not allow the Association to prove that it has a system of controls in place to ensure it is in compliance with federal compliance requirements related to suspension and debarment. Repeat Finding: Yes Recommendation: We recommend that the Association implement a system of controls to ensure that applicable vendors utilized are verified as not being suspended or debarred before contracting with such vendors, and to maintain evidence of such procedures and verification to support compliance with federal regulations and to ensure that all potential vendors are not suspended or debarred. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: US Department of Agriculture Federal program title: USDA Technical Assistance and Training Grants Program CFDA Number: 10.761 Pass-Through Agency: Community Engineering Corps (CECorps) Pass-Through Number: Not provided Award Period: October 1, 2020 through September 30, 2021 Type of Finding: ? Compliance ? Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: 2 CFR 200.77 and 2 CFR 200.309 state that a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance. Condition: Wages earned during a period prior to the start of the period of performance were improperly allocated and charged to a grant. Questioned costs: $3,640 Context: During our testing of the period of performance sample, we noted 56 hours of time was charged to a grant for work performed in September 2020 when the period of performance for the grant began on October 1,2020. Cause: Per discussion with management, the Association's normal recordkeeping process for allocating monthly payroll, charges and allocates time to grants based on the pay date not on the actual days worked during the time period. In this case, the period of performance started toward the end of the pay period, but management coded the entire pay period to the grant per their normal process. Effect: Costs were incurred prior to the period of performance start resulting in noncompliance with 2 CFR 200.77 and 2 CFR 200.309, and questioned costs. Repeat Finding: No Recommendation: We recommend that the Association implement a control to ensure that only charges incurred during the period of performance are charged and allocated to grants. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: US Department of Agriculture Federal program title: USDA Technical Assistance and Training Grants Program CFDA Number: 10.761 Pass-Through Agency: NA Award Period: October 1, 2018 through September 30, 2020 Type of Finding: ? Compliance ? Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: 2 CFR 200.318(a) states that a non-Federal entity must have and use its own documented procurement procedures which reflect applicable State and local laws and regulations and the standards of the Uniform Guidance; such procedures must conform to to the procuremet standards identified in 2 CFR 200.317 through 2 CFR 200.327. 2 CFR 200.318(i) states that a non?federal entity must maintain records sufficient to detail the history of procurement, and that these records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: The Association is not in compliance with 2 CFR 200.318(i) nor its own procurement policy. Questioned costs: None Context: The Association?s policy requires that a Procurement Decision Justification (PDJ) form for procurement transactions greater than $3,001 be completed and maintained to ensure compliance with 2 CFR 200.318(i). During our testing, we noted that PDJ forms was not completed for ten of twelve selections tested, and a PDJ form for one of twelve selections tested was completed ten months after the transaction occurred. Cause: Per discussion with management, the Association did not have a system of controls in place to ensure that PDJ forms are completed for all applicable transactions. Effect: The Association does not have a system of controls in place to ensure that it is in compliance with 2 CFR 200.318(i) nor its own procurement policy, and therefore it is not in compliance with either. Repeat Finding: No Recommendation: We recommend that the Association implement a system of controls to ensure that the Assocication is in compliance with 2 CFR 200.318(i) and is following its own procurement policy. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: US Department of Agriculture Federal program title: USDA Technical Assistance and Training Grants Program CFDA Number: 10.761 Award Period: October 1, 2017 through September 30, 2020 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires that when a non-Federal entity plans to enter into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) which is available at https://www.sam.gov/portal/public/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: One vendor, out of our sample of one, was found to have no evidence of verification that the vendor was not suspended or debarred. It was later verified that the vendor was not suspended or debarred. Questioned costs: None Context: One vendor, out of our sample of one, was found to have no evidence of verification that the vendor was not suspended or debarred. We did later verify that the vendor was not suspended or debarred. Cause: Per discussion with management, the Association did not have a system of controls in place to ensure vendors were verified as not being suspended or debarred. This vendor?s file did not contain verification documentation as the verification control system was not in place to ensure all documentation was kept. Effect: Without maintaining supporting evidence that suspension and debarment procedures were performed over all applicable vendors, the Association cannot support that the federally required procedures were performed and could potentially contract with vendors who are suspended or debarred, causing the Association to be out of compliance with regulations. Repeat Finding: No Recommendation: We recommend that the Association implement a system of controls to ensure that applicable vendors utilized are verified as not being suspended or debarred before contracting with such vendors, and to maintain evidence of such procedures and verification to support compliance with federal regulations and to ensure that all potential vendors are not suspended or debarred. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: US Department of Agriculture Federal program title: USDA Technical Assistance and Training Grants Program CFDA Number: 10.761 Pass-Through Agency: Engineers Without Borders USA dba: Community Engineering Corps (CECorps) Award Period: October 1, 2017 through September 30, 2020 Type of Finding: ? Compliance ? Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Program regulations or the federal award specify reporting requirements. Condition: Every quarter, the Association is required to submit reports for the projects conducted related to the program or federal award. Report submission deadlines are listed in the program or federal award agreements. Questioned costs: None Context: Two reports, out of our sample of six, were found to have been submitted nine days and six days after the reporting period. The third report was not submitted. Cause: Per discussion with management, the Organization had inadequate control processes to ensure reporting requirements are satisfied in accordance with federal awards or program agreements. Effect: Noncompliance with federal funding reporting requirements could result in termination of federal award or program agreements. Repeat Finding: No Recommendation: We recommend the Association implement controls to ensure that reporting requirements are satisfied in accordance with federal awards and program requirements. Views of responsible officials: There is no disagreement with the audit finding.