EIN: 396028867
UEI: EQL7FFLJRC99
Data as of August 26, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 30, 2023. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 30, 2023 (1062 days ago).
What is a management decision? →We found one MA Program payment of $1,956 for outpatient services that was not properly identified and denied under the cost avoidance rules in MMIS. Based upon the outpatient services of this claim, the payment should have been denied because the participant was enrolled in Medicare at the time the service was provided, and Medicare may have been responsible for payment of the service. Context: During FY 2021-22, based upon MA Program payment information provided by DHS, a total of $5.2 billion was paid to providers for fee-for-service claims. During FY 2021 22, there were $324.5 million in MA Program payments for 586,522 claims for outpatient services. Of the 40 fee-for-service claims we reviewed, seven claims were for outpatient services that had payments totaling $6,445. Questioned Costs: For the $1,956 payment we identified, we question $1,293 as the estimated federal share. We also question an undetermined amount for other claims DHS paid using MA Program funding during FY 2021-22 for participants also enrolled in Medicare. Effect: DHS inappropriately used MA Program funding to make a payment for an outpatient claim that may be covered by Medicare, resulting in an improper payment under the MA Program. Further, because the cost avoidance rules are applied to all claims, it is likely there are additional claims for services provided to participants who are also enrolled in Medicare that were improperly paid. Cause: The improper payment we identified occurred because the cost avoidance rules were not correctly established to deny this type of claim for a participant who was also enrolled in Medicare. According to DHS staff, in 2015 DHS reviewed cost avoidance rules in MMIS related to Medicare in an effort to simplify and clarify the rules. In making and testing changes to these rules, DHS did not identify errors in claims meeting criteria similar to the one selected for testing as a part of our audit. DHS indicated that no further testing specific to these rules was performed after these cost avoidance rules were tested and implemented in 2015. Recommendation: We recommend the Wisconsin Department of Health Services: -review and update the Medicaid Management Information System cost avoidance rules to properly identify and deny payment for claims that may be covered by third party insurers; -identify payments made during FY 2021-22 that may have been improper due to inaccurate cost avoidance rules and seek to recover these amounts; -return to the federal government recovered payments that may have been improper; and -perform an assessment and implement additional procedures to review changes to cost avoidance rules in the future. Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-001: Medical Assistance Program Third-Party Liability Background: The U.S. Department of Health and Human Services provides funding to the Department of Health Services (DHS) for the Medical Assistance (MA) Program. Funding under the MA Program is used to assist states in maintaining and expanding health care services to certain categories of low-income persons. Services provided to participants include both inpatient and outpatient services that providers bill on a fee-for-service basis. Providers submit claims for services for eligible participants in the MA Program through the Medicaid Management Information System (MMIS), which is administered by the MA Program?s fiscal agent. DHS works with the fiscal agent to ensure that the MMIS system is correctly processing claims, changes to the system are approved, and an audit of system controls related to claims is completed annually. Criteria: Under 42 CFR ss. 433.135 through 433.154, DHS is required to make reasonable efforts to determine the legal liability of third party insurers for MA Program participants and have processes in place to identify and assess claims to determine if a third-party may be responsible for payment. For example, certain MA Program participants are also eligible for Medicare. If the services provided to a participant could be paid by Medicare, or any other third party insurer, the claims should first be submitted to the third-party insurer by the provider before the claims are submitted to the MA Program. To assess the validity of a claim prior to paying a provider the approved fee-for-service rate, DHS has established validity checks within MMIS called edits. These edits include cost avoidance rules, which are a series of rules within MMIS that identify claims meeting specific criteria related to whether a third-party insurer, including Medicare, could be responsible for payment of the services provided. These rules use claim information, including participant information and type of service, to determine if a third-party insurer may be responsible for payment. If the claim meets the criteria identified in these rules, the provider claim is denied. For claims that are denied through the cost avoidance rules, the MA Program may subsequently pay some claims if the third-party insurer ultimately does not cover the services provided to the participant. Condition: We found one MA Program payment of $1,956 for outpatient services that was not properly identified and denied under the cost avoidance rules in MMIS. Based upon the outpatient services of this claim, the payment should have been denied because the participant was enrolled in Medicare at the time the service was provided, and Medicare may have been responsible for payment of the service. Context: During FY 2021-22, based upon MA Program payment information provided by DHS, a total of $5.2 billion was paid to providers for fee-for-service claims. During FY 2021 22, there were $324.5 million in MA Program payments for 586,522 claims for outpatient services. Of the 40 fee-for-service claims we reviewed, seven claims were for outpatient services that had payments totaling $6,445. Questioned Costs: For the $1,956 payment we identified, we question $1,293 as the estimated federal share. We also question an undetermined amount for other claims DHS paid using MA Program funding during FY 2021-22 for participants also enrolled in Medicare. Effect: DHS inappropriately used MA Program funding to make a payment for an outpatient claim that may be covered by Medicare, resulting in an improper payment under the MA Program. Further, because the cost avoidance rules are applied to all claims, it is likely there are additional claims for services provided to participants who are also enrolled in Medicare that were improperly paid. Cause: The improper payment we identified occurred because the cost avoidance rules were not correctly established to deny this type of claim for a participant who was also enrolled in Medicare. According to DHS staff, in 2015 DHS reviewed cost avoidance rules in MMIS related to Medicare in an effort to simplify and clarify the rules. In making and testing changes to these rules, DHS did not identify errors in claims meeting criteria similar to the one selected for testing as a part of our audit. DHS indicated that no further testing specific to these rules was performed after these cost avoidance rules were tested and implemented in 2015. Recommendation: We recommend the Wisconsin Department of Health Services: -review and update the Medicaid Management Information System cost avoidance rules to properly identify and deny payment for claims that may be covered by third party insurers; -identify payments made during FY 2021-22 that may have been improper due to inaccurate cost avoidance rules and seek to recover these amounts; -return to the federal government recovered payments that may have been improper; and -perform an assessment and implement additional procedures to review changes to cost avoidance rules in the future. Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
CAP for Finding: 2022-001 DATE: November 16, 2022 TO: Lisa Kasel, Assistant Financial Audit Director Legislative Audit Bureau FROM: Barry Kasten, Director Bureau of Fiscal Services Department of Health Services SUBJECT: Corrective Action Plan ? Medical Assistance Program Third-Party Liability Department staff has reviewed the Legislative Audit Bureau?s (LAB) interim audit memo for Finding 2022-001: Medical Assistance Program Third-Party Liability. This is the department?s Corrective Action Plan. ? Recommendation (2022-001): Medical Assistance Program Third-Party Liability We recommend the Wisconsin Department of Health Services: ? Review and update the Medicaid Management Information System cost avoidance rules to properly identify and deny payment for claims that may be covered by third-party insurers. Wisconsin Department of Health Services Planned Corrective Action: DHS has completed an assessment of Medicaid Management Information System (MMIS) cost avoidance rules and will implement changes by December 31, 2022, necessary to properly identify and deny outpatient services when a participant is enrolled in Medicare or other third-party insurance at the time the service was provided. We recommend the Wisconsin Department of Health Services: ? Identify payments made during FY 2021-22 that may have been improper due to inaccurate cost avoidance rules and seek to recover these amounts; ? Return to the federal government recovered payment that may have been improper; and Wisconsin Department of Health Services Planned Corrective Action: DHS will attempt to recover $1,956 in improper payments for outpatient services not properly identified and denied under cost avoidance rules in MMIS by December 31, 2022, and return to the federal government the estimated federal share of $1,293. DHS will complete an assessment and identify paid claims by March 31, 2023, where cost avoidance rules were not appropriately applied for outpatient services when a participant was enrolled in Medicare or other third-party insurance with a date of service after July 1, 2021, and return to the federal government recovered payments that were improper. We recommend the Wisconsin Department of Health Services: ? Perform an assessment and implement additional procedures to review changes to cost avoidance rules in the future. Wisconsin Department of Health Services Planned Corrective Action: DHS will implement processes and procedures by December 31, 2022, for conducting production validation on any configuration changes impacting cost avoidance rules. Anticipated Completion Date: March 31, 2023 Person responsible for corrective action: Nick Havens, Director Bureau of System Management, Division of Medicaid Services Nicholas.Havens@dhs.wisconsin.gov
We identified two concerns with the internal controls over SUW. First, we found that UW System Administration had not formally documented that UW institutions should periodically review approval access authorized within the SUW application. We also note that these approval roles within SUW were not included in the SFS access review process conducted by UW institutions. UW System Administration provides weekly reports of employee job changes to assist UW institutions in monitoring SUW approval access. Although UW System Administration staff indicated that certain UW institution staff were responsible for conducting a review of this report to monitor SUW authorized access, there was no established procedure nor any systemwide monitoring to ensure that each UW institution completed such a review. We contacted four UW institutions and only one UW institution identified the weekly job change report provided by UW System Administration as part of their process to review SUW approval access. Second, UW System Administration did not obtain a service organization audit report from its third party SUW vendor during FY 2021 22 to provide assurances that the vendor had appropriate internal controls in place and that they were operating effectively. Because UW System Administration did not obtain the annual service organization audit report, it also did not consider the adequacy of certain activities that UW System should have in place to ensure reliance on the third party vendor?s internal controls, such as reviewing SUW access authorized by UW institutions. Context: We reviewed the SFS and SUW systems, which include internal controls over certain UW institution expenses reported in the FY 2021 22 financial statements and certain federal grant programs. During FY 2021 22, UW System approved $1.3 billion in payments through access authorized within SUW. We also assessed established UW systemwide policies requiring adequate internal controls and procedures to ensure that each UW institution complied with these policies. In addition, we reviewed a UW System Office of Internal Audit report on certain SUW internal controls that was completed in March 2022. We further discussed the SFS and SUW access review process with UW System Administration and certain UW institutions. We performed transaction testing to review a sample of payments, including those approved through SUW, to ensure the transactions were appropriately approved. We discussed management of service organization audit reports with UW System Administration staff. Questioned Costs: None. Effect: Access reviews are important to ensure access remains appropriate based on user responsibilities and the principle of least privilege. Failure to monitor access can lead to inappropriate access to sensitive data or inappropriate transaction approvals. Although it can be difficult to determine how information security concerns affect the financial statements and material compliance areas, ineffective information security controls may permit controls over individual systems to operate improperly and may allow financial statement misstatements and noncompliance to occur and not be detected. Cause: UW System Administration had emphasized with UW institutions that each UW institution was responsible for granting appropriate access for SUW approvers. However, UW System Administration had not communicated in writing the responsibility of UW institutions to conduct periodic access reviews for SUW approval roles nor did UW System Administration include SUW approval roles in the SFS access review process due to the large number of approvers. UW System Administration is currently working on the Administrative Transformation Program (ATP), which will replace certain systemwide information technology applications, and it currently plans to retain SUW when the ATP project is completed. Therefore, UW System Administration should take further steps to clarify and monitor UW institution review requirements for SUW approval access. UW System Administration performed a risk assessment in 2019 prior to contracting with the cloud based third party vendor to assess the vendor?s internal controls, including security provisions. In addition, UW System?s contract with the cloud based third-party vendor provides for a service organization audit report. However, no UW System Administration staff were assigned the responsibilty or requirement to annually obtain and review such a report. As the application owner, UW System Administration should obtain and review a service organization audit report at least annually. Because UW System?s current ATP project is planning to rely on additional cloud-based third-party vendors to administer aspects of these new systemwide applications, it is important for UW System Administration to establish systemwide policies to adequately monitor cloud based third-party vendor internal controls. Recommendation: We recommend the University of Wisconsin System Administration improve its oversight of the ShopUW+ application by: -developing a written requirement for University of Wisconsin institutions to periodically review ShopUW+ approval access and communicating this requirement to all University of Wisconsin institutions; -developing a procedure to monitor the compliance of all University of Wisconsin institutions with the requirement for periodic review of ShopUW+ approval access; -developing a policy to require periodic review of the adequacy of certain cloud-based third party vendors? internal controls, such as by assigning the responsibility to obtain a service organization audit report and ensuring such reports are reviewed; and -annually obtaining and reviewing relevant service organization audit reports. Type of Finding: Significant Deficiency Response from the University of Wisconsin System Administration: The University of Wisconsin System Administration agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-007: UW System Information Technology Internal Control Deficiencies Background: In April 2021, the University of Wisconsin (UW) System implemented ShopUW+ (SUW) as a new procure-to-pay procurement system that integrates approval of purchases among all 13 UW institutions. Similar to other systemwide applications, UW System Administration was responsible for administering SUW, including developing systemwide polices and ensuring adequate internal controls. SUW is a cloud based system, and some SUW activities are integrated with UW System?s accounting system, the Shared Financial System (SFS). For example, SUW system roles responsible for providing approvals on UW purchases are authorized by designated individuals at each UW institution. Certain other roles are provisioned through a formal process within SFS. The process to provide SUW approval access, and subsequently monitor this access, was different than with SFS. Criteria: Under s. 36.09 (1), Wis. Stats., the Board of Regents is vested with the primary responsibility for the governance of UW System. In discharging this responsibility, compliance with local, state, and federal regulations is necessary to protect institutional and research data. UW System Administrative Procedure 1031.B Information Security: Data Protections requires that information technology systems follow operating system-specific best practices for system management and security. Such best practices include limiting access to those individuals who need access to complete properly separated job duties and periodically reviewing the access provided to ensure it remains appropriate. According to the National Institute of Standards and Technology (NIST) Cybersecurity Framework and NIST 800-53 Release 5, when an entity uses a cloud based third party to process financial transactions or it outsources some of its information technology functions, the entity should consider whether assurances are needed to ensure the third party internal controls are operating effectively. Weaknesses in the third party?s internal controls could affect the financial activity of the entity. These assurances are typically provided through a service organization audit report, which is a report on the service organization?s internal controls by an independent auditor. A service organization audit report is intended to meet the needs of management of user entities, such as UW System Administration, and user entities? auditors. One type of audit that may be completed includes an opinion on the fairness of management?s description of the internal controls in place at a service organization, whether the auditor believes those controls are suitably designed to achieve the internal control objective, and whether the internal controls are effective at achieving the control objective. Condition: We identified two concerns with the internal controls over SUW. First, we found that UW System Administration had not formally documented that UW institutions should periodically review approval access authorized within the SUW application. We also note that these approval roles within SUW were not included in the SFS access review process conducted by UW institutions. UW System Administration provides weekly reports of employee job changes to assist UW institutions in monitoring SUW approval access. Although UW System Administration staff indicated that certain UW institution staff were responsible for conducting a review of this report to monitor SUW authorized access, there was no established procedure nor any systemwide monitoring to ensure that each UW institution completed such a review. We contacted four UW institutions and only one UW institution identified the weekly job change report provided by UW System Administration as part of their process to review SUW approval access. Second, UW System Administration did not obtain a service organization audit report from its third party SUW vendor during FY 2021 22 to provide assurances that the vendor had appropriate internal controls in place and that they were operating effectively. Because UW System Administration did not obtain the annual service organization audit report, it also did not consider the adequacy of certain activities that UW System should have in place to ensure reliance on the third party vendor?s internal controls, such as reviewing SUW access authorized by UW institutions. Context: We reviewed the SFS and SUW systems, which include internal controls over certain UW institution expenses reported in the FY 2021 22 financial statements and certain federal grant programs. During FY 2021 22, UW System approved $1.3 billion in payments through access authorized within SUW. We also assessed established UW systemwide policies requiring adequate internal controls and procedures to ensure that each UW institution complied with these policies. In addition, we reviewed a UW System Office of Internal Audit report on certain SUW internal controls that was completed in March 2022. We further discussed the SFS and SUW access review process with UW System Administration and certain UW institutions. We performed transaction testing to review a sample of payments, including those approved through SUW, to ensure the transactions were appropriately approved. We discussed management of service organization audit reports with UW System Administration staff. Questioned Costs: None. Effect: Access reviews are important to ensure access remains appropriate based on user responsibilities and the principle of least privilege. Failure to monitor access can lead to inappropriate access to sensitive data or inappropriate transaction approvals. Although it can be difficult to determine how information security concerns affect the financial statements and material compliance areas, ineffective information security controls may permit controls over individual systems to operate improperly and may allow financial statement misstatements and noncompliance to occur and not be detected. Cause: UW System Administration had emphasized with UW institutions that each UW institution was responsible for granting appropriate access for SUW approvers. However, UW System Administration had not communicated in writing the responsibility of UW institutions to conduct periodic access reviews for SUW approval roles nor did UW System Administration include SUW approval roles in the SFS access review process due to the large number of approvers. UW System Administration is currently working on the Administrative Transformation Program (ATP), which will replace certain systemwide information technology applications, and it currently plans to retain SUW when the ATP project is completed. Therefore, UW System Administration should take further steps to clarify and monitor UW institution review requirements for SUW approval access. UW System Administration performed a risk assessment in 2019 prior to contracting with the cloud based third party vendor to assess the vendor?s internal controls, including security provisions. In addition, UW System?s contract with the cloud based third-party vendor provides for a service organization audit report. However, no UW System Administration staff were assigned the responsibilty or requirement to annually obtain and review such a report. As the application owner, UW System Administration should obtain and review a service organization audit report at least annually. Because UW System?s current ATP project is planning to rely on additional cloud-based third-party vendors to administer aspects of these new systemwide applications, it is important for UW System Administration to establish systemwide policies to adequately monitor cloud based third-party vendor internal controls. Recommendation: We recommend the University of Wisconsin System Administration improve its oversight of the ShopUW+ application by: -developing a written requirement for University of Wisconsin institutions to periodically review ShopUW+ approval access and communicating this requirement to all University of Wisconsin institutions; -developing a procedure to monitor the compliance of all University of Wisconsin institutions with the requirement for periodic review of ShopUW+ approval access; -developing a policy to require periodic review of the adequacy of certain cloud-based third party vendors? internal controls, such as by assigning the responsibility to obtain a service organization audit report and ensuring such reports are reviewed; and -annually obtaining and reviewing relevant service organization audit reports. Type of Finding: Significant Deficiency Response from the University of Wisconsin System Administration: The University of Wisconsin System Administration agrees with the audit finding and recommendations.
CAP for Finding: 2022-007 Planned Corrective Action: The UW System has adequate processes in place for reviewing access to ShopUW+ but agrees to better document these processes. UW System Administration (UWSA) has revised the disbursement internal control template, which all UW universities use in developing their internal control plans, to document the UW System?s security reviews. UWSA will also update the language surrounding its weekly access reports, to explain their purpose and importance. To monitor this control, the UW System will add a statement to this effect in the universities? annual delegation agreement and certifications. UWSA is actively taking steps to mature its third-party risk management practices, including the development of guidance and best practices for UW universities. Current efforts are focused on optimizing available resources to provide the highest return on value. UWSA currently performs periodic reviews of cloud-based third-party internal controls during precontract evaluations and at the time of contract renewals. This includes obtaining and reviewing service organization audit reports, if available. UWSA will evaluate the efficacy of increasing the periodicity of these reviews to an annual basis. UWSA will also evaluate means for communicating identified expectations systemwide, up to and including the creation of a new policy. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Julie Gordon, Senior Associate Vice President Finance, UW System Administration jgordon@uwsa.edu
We identified that DOA made a payment of $161,363 to an organization under both the Live Event Small Business Program and the Minor League Sports Team Grant Program. The applicant reported its 2019 and 2020 federal taxable income in both applications and its decrease in income from 2019 to 2020 was $161,363. DOA paid the organization $161,363 under the Minor League Sports Team Grant Program on January 5, 2022, and then paid the organization $161,363 under the Live Event Small Business Program on January 12, 2022. Context: During FY 2021-22, DOA expended $185.2 million in CSLFRF funding, including providing $11.2 million to 96 organizations under the Live Event Small Business Grant Program and $2.8 million to 17 organizations under the Minor League Sports Team Grant Program. We interviewed DOA staff, reviewed applications, and examined payment documentation for these programs. Questioned Costs: $161,363 Effect: Without adequate internal controls in place, DOA is at increased risk of making inappropriate payments using CSLFRF funding. Cause: When administering the CSLFRF grant, DOA did not establish effective internal controls to assess the appropriateness of making a payment to an applicant that applies under multiple programs. DOA staff indicated that such controls were implemented for certain programs where DOA anticipated an applicant might apply under more than one program. However, DOA indicated that it had not anticipated that an applicant would apply under both the Live Event Small Business Grant Program and the Minor League Sports Team Grant Program. Recommendation: We recommend the Wisconsin Department of Administration: -develop and implement controls to identify when an applicant applies for funding under multiple programs and to assess the appropriateness of whether it would be making payments to an applicant that applies under multiple programs; and -review the specific payments made to the organization we identified and seek repayment of the amount that was made inappropriately. Finding 2022-100: Coronavirus State and Local Fiscal Recovery Funds?Unallowable Costs COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: $161,363 Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-100: Coronavirus State and Local Fiscal Recovery Funds?Unallowable Costs Background: The State was advanced $1.3 billion in CSLFRF funding in May 2021 and another $1.3 billion in May 2022. CSLFRF was created under the American Rescue Plan Act (ARPA) and is administered by DOA. CSLFRF funding has certain stipulations, including that the funds must be used to: -respond to the public health emergency or its negative economic impacts; -respond to the needs of workers performing essential work during the public health emergency; -provide government services to the extent revenue losses due to the public health emergency reduced revenues; and -make necessary investments in water, sewer, or broadband infrastructure. Further, federal regulations stipulate that eligible expenditures must be incurred between March 3, 2021, and December 31, 2024, and funds must be spent through December 31, 2026. DOA paid funds to other state agencies for programs they administered and spent funds on its own programs. Two of the programs established by DOA were the Live Event Small Business Grant Program and the Minor League Sports Team Grant Program. The Live Event Small Business Grant Program provided grants to eligible live event small businesses within the State of Wisconsin that generated 50.0 percent or more of their revenue through provision of goods and/or services to live venues. The Minor League Sports Team Grant Program provided grants to eligible Wisconsin-based minor league sports teams that had attendance of at least 30,000 and not more than 300,000 at events held in 2019. Applicants submitted application materials, including federal income tax information or total revenue, and awards were made after review and approval by DOA. Grant award amounts were determined based on the decrease in the applicant?s federal taxable income or total revenue between calendar years 2019 and 2020, up to a maximum amount of $200,000. Criteria: In accordance with 2 CFR s. 200.303, DOA is responsible for establishing and maintaining effective internal control over federal awards that provides reasonable assurance that it is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Further, under U.S. Department of the Treasury Final Rule (31 CFR Part 35), DOA must establish rigorous oversight and internal control processes to monitor compliance with any applicable requirements of CSLFRF funding. Condition: We identified that DOA made a payment of $161,363 to an organization under both the Live Event Small Business Program and the Minor League Sports Team Grant Program. The applicant reported its 2019 and 2020 federal taxable income in both applications and its decrease in income from 2019 to 2020 was $161,363. DOA paid the organization $161,363 under the Minor League Sports Team Grant Program on January 5, 2022, and then paid the organization $161,363 under the Live Event Small Business Program on January 12, 2022. Context: During FY 2021-22, DOA expended $185.2 million in CSLFRF funding, including providing $11.2 million to 96 organizations under the Live Event Small Business Grant Program and $2.8 million to 17 organizations under the Minor League Sports Team Grant Program. We interviewed DOA staff, reviewed applications, and examined payment documentation for these programs. Questioned Costs: $161,363 Effect: Without adequate internal controls in place, DOA is at increased risk of making inappropriate payments using CSLFRF funding. Cause: When administering the CSLFRF grant, DOA did not establish effective internal controls to assess the appropriateness of making a payment to an applicant that applies under multiple programs. DOA staff indicated that such controls were implemented for certain programs where DOA anticipated an applicant might apply under more than one program. However, DOA indicated that it had not anticipated that an applicant would apply under both the Live Event Small Business Grant Program and the Minor League Sports Team Grant Program. Recommendation: We recommend the Wisconsin Department of Administration: -develop and implement controls to identify when an applicant applies for funding under multiple programs and to assess the appropriateness of whether it would be making payments to an applicant that applies under multiple programs; and -review the specific payments made to the organization we identified and seek repayment of the amount that was made inappropriately. Finding 2022-100: Coronavirus State and Local Fiscal Recovery Funds?Unallowable Costs COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: $161,363 Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
CAP for Finding: 2022-100 Auditor Recommendation: Develop and implement controls to identify when an applicant applies for funding under multiple programs and to assess the appropriateness of whether it would be making payments to an applicant that applies under multiple programs. Planned Corrective Action: The Wisconsin Department of Administration (DOA or Department) will develop and implement controls to identify when an applicant applies for funding under multiple programs and to assess the appropriateness of whether it would be making payments to an applicant that applies under multiple programs. The controls will be documented in the Department?s Grants Management Guide and will consider, among other things, the purpose of the assistance being awarded and the criteria for the award. As the auditors noted specific to this finding and recommendation, DOA implemented controls for certain programs where it was anticipated an applicant might apply under more than one program. For programs where the controls were not implemented prior to award, the Department has subsequently reviewed to verify that an applicant was not paid for the same losses under more than one program, and none aside from that which was the condition for this finding were identified. Anticipated Completion Date: June 30, 2023 Auditor Recommendation: Review the specific payments made to the organization we identified and seek repayment of the amount that was made inappropriately. Planned Corrective Action: DOA has reviewed the specific payments made to the organization identified by the auditors and sought repayment of the amount that was not properly paid. Anticipated Completion Date: March 31, 2023 Person responsible for corrective action: Colleen Holtan, Director Bureau of Financial Management Division of Enterprise Operations colleen.holtan@wisconsin.gov
After we asked questions about the calculation of the maximum heating benefit award amount, DOA informed us that it did not accurately calculate the maximum heating benefit award amount for inclusion in its state plan. Specifically, DOA did not include the adjusted benefit factor, which is used to estimate total caseload and total budget for the year to ensure that as many eligible applicants may be served as possible. As noted, DOA calculated a maximum heating benefit award amount of $1,518. When the adjusted benefit factor was included in the calculation, the maximum heating benefit award amount increased to $2,407. Context: In FY 2021-22, DOA expended $205.6 million under the LIHEAP grant, including providing $80.6 million in heating benefits to over 190,000 households. We inquired of DOA staff regarding the LIHEAP benefit calculation and how it is determined. We tested the heating benefit calculation and analyzed DOA?s determination of the number of households affected by the error DOA made in calculating the maximum heating benefit amount. Questioned Costs: None. Effect: As a result of the error in calculating the maximum heating benefit award amount, DOA determined that it underpaid LIHEAP benefits for 605 households in FY 2021-22. DOA calculated that the 605 households were underpaid a total of $130,352 in heating benefits. At the time of our fieldwork in February 2023, DOA was in the process of recalculating heating benefits and issuing supplemental heating benefit payments. Cause: DOA staff indicated that the underlying parameters for determining the LIHEAP heating benefit maximum are calculated using an external Microsoft Access database. DOA Division of Enterprise Technology staff manually load these parameters into the benefit factor table into Home Energy (HE) Plus. DEHCR staff indicated they perform a review of the parameters after they are loaded into Home Energy (HE) Plus. However, this review was not effective in identifying the error in the maximum heating benefit award amount, and DOA did not document the performance of the review. Recommendation: We recommend the Wisconsin Department of Administration: -establish and implement written procedures for making updates to the benefit calculation parameters in the Home Energy (HE) Plus application; -reassess its existing procedures for performing a review of the benefit calculation parameters entered into the Home Energy (HE) Plus application, make adjustments to its existing procedures as necessary, and document the performance of each review; and -complete its review of the 605 households that were underpaid heating benefits due to the error and issue supplemental heating benefit payments. Finding 2022-101: Low-Income Home Energy Assistance Program?Heating Benefit Calculation Low-Income Home Energy Assistance Program (Assistance Listing number 93.568) COVID-19?Low-Income Home Energy Assistance Program (Assistance Listing number 93.568) Award Numbers Award Years 2101WILIE4 n/a 2201WILIEA 10/1/21?9/30/22 2101WIE5C6 (ARPA) 3/11/21?9/30/22 2201WILIEI (IIJA) 10/1/21?9/30/23 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-101: Low-Income Home Energy Assistance Program?Heating Benefit Calculation Background: The U.S. Department of Health and Human Services (DHHS) provides funding to DOA?s Division of Energy, Housing, and Community Resources (DEHCR) for LIHEAP. This program is used to provide energy assistance to eligible low-income home owners and renters to reduce the energy burden in heating their homes. DOA uses the Home Energy (HE) Plus computer system to determine eligibility for individuals applying for benefits, calculate heating benefits, and store information on applicants and beneficiaries. Program benefits are calculated based on applicant information that is entered into Home Energy (HE) Plus by DOA?s local agency partners. DOA submits an annual state plan to DHHS for LIHEAP. This state plan includes the estimated program benefit levels, as well as other information. In the federal fiscal year 2022 state plan, DOA estimated a minimum program benefit award amount of $30 and a maximum program benefit award amount of $1,518. Criteria: Under 42 U.S. Code ch. 94, states are required to provide in a timely manner the highest level of assistance to those households with the lowest incomes and the highest energy costs or needs relative to income and family size. Under 2 CFR 200.303, DOA is responsible for establishing and maintaining effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the award terms and conditions. Condition: After we asked questions about the calculation of the maximum heating benefit award amount, DOA informed us that it did not accurately calculate the maximum heating benefit award amount for inclusion in its state plan. Specifically, DOA did not include the adjusted benefit factor, which is used to estimate total caseload and total budget for the year to ensure that as many eligible applicants may be served as possible. As noted, DOA calculated a maximum heating benefit award amount of $1,518. When the adjusted benefit factor was included in the calculation, the maximum heating benefit award amount increased to $2,407. Context: In FY 2021-22, DOA expended $205.6 million under the LIHEAP grant, including providing $80.6 million in heating benefits to over 190,000 households. We inquired of DOA staff regarding the LIHEAP benefit calculation and how it is determined. We tested the heating benefit calculation and analyzed DOA?s determination of the number of households affected by the error DOA made in calculating the maximum heating benefit amount. Questioned Costs: None. Effect: As a result of the error in calculating the maximum heating benefit award amount, DOA determined that it underpaid LIHEAP benefits for 605 households in FY 2021-22. DOA calculated that the 605 households were underpaid a total of $130,352 in heating benefits. At the time of our fieldwork in February 2023, DOA was in the process of recalculating heating benefits and issuing supplemental heating benefit payments. Cause: DOA staff indicated that the underlying parameters for determining the LIHEAP heating benefit maximum are calculated using an external Microsoft Access database. DOA Division of Enterprise Technology staff manually load these parameters into the benefit factor table into Home Energy (HE) Plus. DEHCR staff indicated they perform a review of the parameters after they are loaded into Home Energy (HE) Plus. However, this review was not effective in identifying the error in the maximum heating benefit award amount, and DOA did not document the performance of the review. Recommendation: We recommend the Wisconsin Department of Administration: -establish and implement written procedures for making updates to the benefit calculation parameters in the Home Energy (HE) Plus application; -reassess its existing procedures for performing a review of the benefit calculation parameters entered into the Home Energy (HE) Plus application, make adjustments to its existing procedures as necessary, and document the performance of each review; and -complete its review of the 605 households that were underpaid heating benefits due to the error and issue supplemental heating benefit payments. Finding 2022-101: Low-Income Home Energy Assistance Program?Heating Benefit Calculation Low-Income Home Energy Assistance Program (Assistance Listing number 93.568) COVID-19?Low-Income Home Energy Assistance Program (Assistance Listing number 93.568) Award Numbers Award Years 2101WILIE4 n/a 2201WILIEA 10/1/21?9/30/22 2101WIE5C6 (ARPA) 3/11/21?9/30/22 2201WILIEI (IIJA) 10/1/21?9/30/23 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
CAP for Finding: 2022-101 Auditor Recommendation: Establish and implement written procedures for making updates to the benefit calculation parameters in the Home Energy (HE) Plus application. Planned Corrective Action: The Wisconsin Department of Administration (Department or DOA) will establish and implement written procedures for entering and updating the benefit calculation parameters related to the Wisconsin Home Energy Assistance Program (WHEAP) in the HE Plus (HE+) System. The Department?s procedures will reflect that it incorporated a module for determining the LIHEAP heating maximum benefit in the HE+ System and eliminated the use of an external Microsoft Access database for that purpose subsequent to the period under audit (i.e., in state fiscal year [SFY] 2022-23). Anticipated Completion Date: May 1, 2023 Auditor Recommendation: Reassess its existing procedures for performing a review of the benefit calculation parameters entered into the Home Energy (HE) Plus application, make adjustments to its existing procedures as necessary, and document the performance of each review. Planned Corrective Action: The Department necessarily reassessed its procedures for reviewing the entry of benefit calculation parameters into the HE+ System when it incorporated a module for determining the LIHEAP heating maximum benefit in the HE+ System and eliminated the use of an external Microsoft Access database for that purpose subsequent to the period under audit (i.e., in state fiscal year [SFY] 2022-23). The development and implementation of the new system functionality, which was used for the determining the federal fiscal year (FFY) 2023 WHEAP program benefits, improved program integrity through the elimination of manual data entry of end result benefit factors and proxy values. Program integrity will be further strengthened through the creation of a form to document the review of the benefit calculation parameters entered into HE+. The form will be created by May 1, 2023, and implemented with the FFY24 benefit formula calculation scheduled to be completed in July 2023. Anticipated Completion Date: May 1, 2023 Auditor Recommendation: Complete its review of the 605 households that were underpaid heating benefits due to the error and issue supplemental heating benefit payments. Planned Corrective Action: DOA completed its review of the households that were underpaid heating benefits and will issue the supplemental heating benefit payments as soon as practical. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Susan Brown, Administrator Division of Energy, Housing and Community Resources susan.brown@wisconsin.gov
We tested a sample of 60 individuals who applied for and received benefits under the WERA program. In our testing, we found that DOA did not have sufficient documentation in Home Energy (HE) Plus to demonstrate that all of the applicants were eligible to receive benefits under the program or that the costs were allowable to be funded by the ERA Program. We found concerns with: -the income attestation forms for 10 of 60 individuals, where DOA did not have documentation of a completed income attestation form or the income attestation form was at least 90 days old at the time of application; -the income recertification documentation for 6 of 9 individuals in our sample where DOA did not have documentation that a timely income recertification was completed; -the renter verification form for 7 of 60 individuals, where DOA did not have documentation of a completed form or the form was from a prior application for funding and was not updated; and -utility assistance for 5 of 14 individuals in our sample where DOA did not have documentation to support the amounts paid. We also identified other documentation concerns that were not material but that we verbally discussed with DOA staff. Context: In FY 2021-22, DOA processed $135.5 million in ERA Program benefit payments, using Home Energy (HE) Plus, of which $132.1 million was made to either landlords or tenants and $3.4 million was made to utility companies. A total of 31,224 households were reported in Home Energy (HE) Plus as having received rental and utility assistance benefit payments under the ERA Program in FY 2021-22. We evaluated Treasury guidance related to the ERA Program, discussed the application procedures with DOA staff, and reviewed DOA?s WERA Program Manual. We selected a random sample of 60 individuals who received ERA Program benefits in FY 2021-22 and reviewed available documentation in Home Energy (HE) Plus. Questioned Costs: We question $52,562 in rental and utility assistance payments for which DOA did not have adequate supporting documentation in Home Energy (HE) Plus. We removed instances of duplication in the documentation concerns we identified and determined that questioned costs includes: -$30,258 in benefits paid for 10 individuals for whom DOA did not have documentation of a completed or timely income attestation form; -$10,878 in benefits paid for 4 individuals for whom DOA did not have documentation of a timely income recertification; -$9,150 in benefits paid for 3 individuals for whom DOA either did not have documentation of a renter verification form or did not have a current renter verification form; and -$2,276 in benefits paid for 5 individuals for whom DOA did not have documentation of payments made for utility assistance. We also question an undetermined amount for individuals that we did not test. Effect: DOA provided rental and utility assistance to individuals who may have been ineligible to receive ERA Program benefits, which may have resulted in improper payments. Cause: During FY 2021-22, DOA did not provide sufficient oversight and training to ESI and the community action agencies that were responsible for entering the applicant information into Home Energy (HE) Plus and ensuring the appropriate supporting documentation was entered into the system. Further, DOA?s WERA Program Manual did not clearly address all Treasury documentation requirements to determine eligibility or allowability of costs. For example, DOA?s WERA Program Manual did not specify that a lease must be provided, if available, or the requirement that an applicant must provide documentation of rental amounts if assistance is requested for longer than three months. In response to our prior-year recommendation, DOA provided training to the community action agencies and ESI in June 2022, and updated the WERA Program Manual as of June 30, 2022. Recommendation: We recommend the Wisconsin Department of Administration: -obtain the required documentation for the 22 individuals we identified or seek to recoup improper benefit payments it made to these individuals; -closely monitor the documentation being accepted by the community action agencies and Energy Services, Inc., and provide further training to address individual instances of noncompliance with the Wisconsin Emergency Rental Assistance Program Manual and guidance from the U.S. Department of the Treasury; and -regularly review and update its procedures to ensure that it is following the guidance from the U.S. Department of the Treasury in administering the Wisconsin Emergency Rental Assistance program. Finding 2022-102: Emergency Rental Assistance Program?Documentation to Support Applicant Eligibility and Benefit Payments COVID-19?Emergency Rental Assistance Program (Assistance Listing number 21.023) Award Number Award Year None 2021 Questioned Costs: $52,562 Type of Finding: Material Weakness, Material Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-102: Emergency Rental Assistance Program?Documentation to Support Applicant Eligibility and Benefit Payments Background: The ERA Program was established in FY 2020-21 under the federal Consolidated Appropriations Act of 2021 and was continued in FY 2021-22 under ARPA. The ERA Program is administered by the U.S. Department of the Treasury (Treasury) and was established to assist households that are unable to pay rent or utilities. In January 2021, DOA was advanced $322.2 million in ERA 1 funding. In May and June 2021, DOA was advanced $112.5 million in ERA 2 funding. Federal requirements under ERA 1 and ERA 2 are similar with some variation in the income eligibility requirements. DOA established the Wisconsin Emergency Rental Assistance (WERA) program using the federal ERA Program funding. According to DOA?s WERA Program Manual, ERA 1 was fully expended as of February 24, 2022, and ERA 2 policies were established as of September 2, 2021. To administer the WERA program, DOA contracted with community action agencies, including the Wisconsin Community Action Program (WISCAP) Association, and Energy Services, Inc. (ESI), to intake and review individual applications for eligibility. The community action agencies and ESI were responsible for entering the applications into DOA?s Home Energy (HE) Plus computer system, which was used to determine and process the benefit payment amount. To receive assistance through the WERA program, an individual must first apply for the Wisconsin Home Energy Assistance Program (WHEAP) and have an active application in Home Energy (HE) Plus. We identified concerns with DOA?s administration of the WERA program as part of our performance evaluation of the Emergency Rental Assistance and Emergency Solutions Grant programs (report 22-3) and our FY 2020-21 single audit (report 22-5). We made recommendations for DOA to make improvements (Finding 2021-104 in report 22-5). In response to our recommendations, DOA updated its policies and procedures in the WERA Program Manual, effective June 30, 2022, and provided training to the community action agencies and ESI. Criteria: Under Treasury guidance, to be eligible for DOA?s WERA program a household must be obligated to pay rent on a residential dwelling and: -at least one individual within the household must qualify for unemployment benefits or has experienced a reduction in household income, incurred significant costs, or experienced other financial hardship because of the public health emergency; and -at least one individual within the household must be at risk of experiencing homelessness or housing instability; and -the total household income must be 80 percent or less of the median income in the county where the household is located (ERA 1 funding), or the household must be a low-income family as defined in 42 U.S.C. 1437a(b) (ERA 2 funding). Treasury guidance allows the State to rely on self-attestation for verification of an applicant?s income. If a household meets the eligibility requirements based on a written attestation without further documentation, Treasury guidance indicates that the State must redetermine household income every three months by requesting that applicants submit documentation or a written attestation. Treasury guidance indicates that applicants must provide a current lease that is signed by the applicant and the landlord identifying the rental unit and the rental payment amount. If a lease is unavailable, other documentation of residence should be obtained, such as a utility bill. Further, Treasury guidance indicates that if the applicant cannot present documentation of the amount of rent, a written attestation may be accepted for up to three months. If additional assistance is needed after that time, documentation of the rent amount is required. Treasury guidance requires that all payments for utilities and home energy costs be supported by a bill, invoice, or evidence of payment to the utility provider or home energy service. To make benefit payments under the WERA program, DOA requires: -an income attestation form, which indicates that the applicant has been unable to pay rent and/or utilities and is at risk of losing housing or facing eviction due to COVID-related events, states that the applicant is not receiving other federally funded emergency rental assistance, and describes why income was impacted; -a renter verification form, which indicates applicant name and applicant rental information, such as landlord, rent amount, and description of assistance requested; and -supporting documentation, such as invoices, utility bills, a lease agreement, or other documentation. Further, when recertifying an applicant for eligibility after three months, DOA?s WERA Program Manual indicates that the client?s current income must be reviewed, notes are required to be entered into Home Energy (HE) Plus indicating how the income eligibility was calculated, and an updated renter verification form is to be uploaded into Home Energy (HE) Plus. Condition: We tested a sample of 60 individuals who applied for and received benefits under the WERA program. In our testing, we found that DOA did not have sufficient documentation in Home Energy (HE) Plus to demonstrate that all of the applicants were eligible to receive benefits under the program or that the costs were allowable to be funded by the ERA Program. We found concerns with: -the income attestation forms for 10 of 60 individuals, where DOA did not have documentation of a completed income attestation form or the income attestation form was at least 90 days old at the time of application; -the income recertification documentation for 6 of 9 individuals in our sample where DOA did not have documentation that a timely income recertification was completed; -the renter verification form for 7 of 60 individuals, where DOA did not have documentation of a completed form or the form was from a prior application for funding and was not updated; and -utility assistance for 5 of 14 individuals in our sample where DOA did not have documentation to support the amounts paid. We also identified other documentation concerns that were not material but that we verbally discussed with DOA staff. Context: In FY 2021-22, DOA processed $135.5 million in ERA Program benefit payments, using Home Energy (HE) Plus, of which $132.1 million was made to either landlords or tenants and $3.4 million was made to utility companies. A total of 31,224 households were reported in Home Energy (HE) Plus as having received rental and utility assistance benefit payments under the ERA Program in FY 2021-22. We evaluated Treasury guidance related to the ERA Program, discussed the application procedures with DOA staff, and reviewed DOA?s WERA Program Manual. We selected a random sample of 60 individuals who received ERA Program benefits in FY 2021-22 and reviewed available documentation in Home Energy (HE) Plus. Questioned Costs: We question $52,562 in rental and utility assistance payments for which DOA did not have adequate supporting documentation in Home Energy (HE) Plus. We removed instances of duplication in the documentation concerns we identified and determined that questioned costs includes: -$30,258 in benefits paid for 10 individuals for whom DOA did not have documentation of a completed or timely income attestation form; -$10,878 in benefits paid for 4 individuals for whom DOA did not have documentation of a timely income recertification; -$9,150 in benefits paid for 3 individuals for whom DOA either did not have documentation of a renter verification form or did not have a current renter verification form; and -$2,276 in benefits paid for 5 individuals for whom DOA did not have documentation of payments made for utility assistance. We also question an undetermined amount for individuals that we did not test. Effect: DOA provided rental and utility assistance to individuals who may have been ineligible to receive ERA Program benefits, which may have resulted in improper payments. Cause: During FY 2021-22, DOA did not provide sufficient oversight and training to ESI and the community action agencies that were responsible for entering the applicant information into Home Energy (HE) Plus and ensuring the appropriate supporting documentation was entered into the system. Further, DOA?s WERA Program Manual did not clearly address all Treasury documentation requirements to determine eligibility or allowability of costs. For example, DOA?s WERA Program Manual did not specify that a lease must be provided, if available, or the requirement that an applicant must provide documentation of rental amounts if assistance is requested for longer than three months. In response to our prior-year recommendation, DOA provided training to the community action agencies and ESI in June 2022, and updated the WERA Program Manual as of June 30, 2022. Recommendation: We recommend the Wisconsin Department of Administration: -obtain the required documentation for the 22 individuals we identified or seek to recoup improper benefit payments it made to these individuals; -closely monitor the documentation being accepted by the community action agencies and Energy Services, Inc., and provide further training to address individual instances of noncompliance with the Wisconsin Emergency Rental Assistance Program Manual and guidance from the U.S. Department of the Treasury; and -regularly review and update its procedures to ensure that it is following the guidance from the U.S. Department of the Treasury in administering the Wisconsin Emergency Rental Assistance program. Finding 2022-102: Emergency Rental Assistance Program?Documentation to Support Applicant Eligibility and Benefit Payments COVID-19?Emergency Rental Assistance Program (Assistance Listing number 21.023) Award Number Award Year None 2021 Questioned Costs: $52,562 Type of Finding: Material Weakness, Material Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendation.
CAP for Finding: 2022-102 Auditor Recommendation: Obtain the required documentation for the 22 individuals we identified or seek to recoup improper benefit payments it made to these individuals. Planned Corrective Action: The Wisconsin Department of Administration (Department or DOA) will request from the auditors the cases identified, review available documentation in its eligibility and benefit determination system to determine that all of the applicants were eligible to receive benefits under the program or that the costs were allowable to be funded by the Wisconsin Emergency Rental Assistance (WERA) Program, and obtain the required supporting documentation. Should DOA determine that it provided rental and utility assistance to individuals who were ineligible to receive WERA Program benefits, it will identify alternate eligible Department funding sources or seek to recoup improper benefit payments made, as appropriate. Anticipated Completion Date: June 30, 2023 Auditor Recommendation: Closely monitor the documentation being accepted by the community action agencies and Energy Services, Inc., and provide further training to address individual instances of noncompliance with the Wisconsin Emergency Rental Assistance Program Manual and guidance from the U.S. Department of the Treasury. Planned Corrective Action: The Department will monitor the documentation accepted by the community action agencies and Energy Services, Inc. (ESI), and provide further training to address individual instances of noncompliance with the WERA Program Manual and guidance from the U.S. Department of the Treasury. As the auditors noted, DOA provided training to the community action agencies and ESI in June 2022, and updated the WERA Program Manual as of June 30, 2022. The Department further notes that, after serving nearly 40,000 households with close to $250 million of assistance for rent, utilities and home internet bills, and preventing thousands of evictions across the state, the WERA Program closed to new applications as of January 31, 2023, but housing stability services remain available. Anticipated Completion Date: June 30, 2023 Auditor Recommendation: Regularly review and update its procedures to ensure that it is following the guidance from the U.S. Department of the Treasury in administering the Wisconsin Emergency Rental Assistance program. Planned Corrective Action: The Department will continue to review and update its procedures to ensure that it is following the guidance from the U.S. Department of Treasury in administering the WERA program. As the auditors noted, in response to its prior recommendation, DOA updated the WERA Program Manual as of June 30, 2022. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Susan Brown, Administrator Division of Energy, Housing and Community Resources susan.brown@wisconsin.gov
2021-104
During FY 2021-22, DOA BFM transferred FY 2020-21 expenditures from the CSLFRF grant to the Coronavirus Relief Fund (CRF) (Assistance Listing number 21.019). In addition, during FY 2021-22 DOA BFM transferred FY 2019-20 and FY 2020-21 expenditures from the CRF to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant (Assistance Listing number 97.036). In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the CSLFRF and CRF grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DOA BFM did not make a subsequent adjustment to remove the expenditure adjustments from the CSLFRF and CRF grants. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DOA administered $990.5 million in federal financial assistance in FY 2021-22. We reviewed DOA?s SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: In preparing its FY 2021-22 SEFA, DOA BFM underreported expenditures for CSLFRF by $192.1 million and for the CRF by $241.3 million. Further, because the transfer of prior-year expenditures in the current year changed the prior-year total federal expenditures, there is a potential effect on the prior-year single audit results that could result in the need to re-issue the prior-year single audit report. However, we assessed the revised total federal expenditures in FY 2019-20 and in FY 2020-21 and we determined that the audit results for FY 2019-20 and FY 2020-21 did not require an update. Cause: DOA BFM sought to reflect the expenditures for DOA?s grant programs based on the amounts recorded in the STAR General Ledger. However, DOA BFM did not consider that the negative expenditures, resulting from the transfers of FY 2019-20 and FY 2020-21 expenditures led to underreporting of the grant expenditures in the SEFA. Recommendation: We recommend the Wisconsin Department of Administration: -further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is adjusting expenditures for all prior-year transfers of expenditures in the current year; and -carefully assess the transfer of prior-year expenditures in the current year to determine any potential effects on the total federal expenditures for the prior-year and the effect on the major program expenditures. Finding 2022-103: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards COVID-19?Coronavirus Relief Fund (Assistance Listing number 21.019) Award Number Award Year None 2020 Questioned Costs: None COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-103: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency prepares a SEFA for the federal programs that it administers. For federal programs administered by DOA, the DOA Bureau of Financial Management (BFM) prepares the SEFA and provides this SEFA to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Finally, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Generally accepted accounting principles require that the correction of prior-period amounts in the financial statements should be reported as an adjustment to the opening fund balance and not be reported as an adjustment to the current-year activity. Further, the adjustment and its effects should be disclosed in the footnotes. These concepts are similarly applied to the preparation of the SEFA. Condition: During FY 2021-22, DOA BFM transferred FY 2020-21 expenditures from the CSLFRF grant to the Coronavirus Relief Fund (CRF) (Assistance Listing number 21.019). In addition, during FY 2021-22 DOA BFM transferred FY 2019-20 and FY 2020-21 expenditures from the CRF to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant (Assistance Listing number 97.036). In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the CSLFRF and CRF grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DOA BFM did not make a subsequent adjustment to remove the expenditure adjustments from the CSLFRF and CRF grants. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DOA administered $990.5 million in federal financial assistance in FY 2021-22. We reviewed DOA?s SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: In preparing its FY 2021-22 SEFA, DOA BFM underreported expenditures for CSLFRF by $192.1 million and for the CRF by $241.3 million. Further, because the transfer of prior-year expenditures in the current year changed the prior-year total federal expenditures, there is a potential effect on the prior-year single audit results that could result in the need to re-issue the prior-year single audit report. However, we assessed the revised total federal expenditures in FY 2019-20 and in FY 2020-21 and we determined that the audit results for FY 2019-20 and FY 2020-21 did not require an update. Cause: DOA BFM sought to reflect the expenditures for DOA?s grant programs based on the amounts recorded in the STAR General Ledger. However, DOA BFM did not consider that the negative expenditures, resulting from the transfers of FY 2019-20 and FY 2020-21 expenditures led to underreporting of the grant expenditures in the SEFA. Recommendation: We recommend the Wisconsin Department of Administration: -further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is adjusting expenditures for all prior-year transfers of expenditures in the current year; and -carefully assess the transfer of prior-year expenditures in the current year to determine any potential effects on the total federal expenditures for the prior-year and the effect on the major program expenditures. Finding 2022-103: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards COVID-19?Coronavirus Relief Fund (Assistance Listing number 21.019) Award Number Award Year None 2020 Questioned Costs: None COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
CAP for Finding: 2022-103 Auditor Recommendation: Further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is adjusting expenditures for all prior-year transfers of expenditures in the current year. Planned Corrective Action: The Wisconsin Department of Administration (DOA or Department) Bureau of Financial Management (BFM) will evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards (SEFA) and ensure it is adjusting expenditures for material prior-year transfers of expenditures in the current year in a manner consistent with requirements of the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance or Guidance) and additional guidance, if any, provided by the Department?s State Controller?s Office (SCO). The Uniform Guidance requires the preparation of a SEFA for the period covered by the State's financial statements that includes total federal awards expended [ref. 2 CFR 200.510 (b)]; the determination of when a federal award is expended to be based on when the activity related to the federal award occurs [ref. 2 CFR 200.502]; and that the financial statements and SEFA are for the same audit period [ref. 2 CFR 200.514]. As the auditors noted, in preparing DOA?s SEFA, DOA BFM sought to reflect the amount of federal awards expended for DOA?s grant programs based on the amounts reported in the STAR general ledger. Together with reporting negative expenditures resulting from the transfers of FY 2019-20 and FY 2020-21 expenditures within the Notes to the SEFA, which are an integral part of the SEFA and required by 2 CFR 200.510 (b)(6), and absent OMB guidance that prescribes a uniform method for reporting a transfer of prior year grant expenditures, DOA BFM believed its approach was consistent with the requirements of 2 CFR 200.502 and 2 CFR 200.510 (b), more generally. DOA BFM later modified its SEFA to exclude negative expenditures resulting from the transfers of FY 2019-20 and FY 2020-21 expenditures consistent with the manner in which a prior period adjustment would be reflected within current-year activity in financial statements prepared in accordance with generally accepted accounting principles (GAAP), as described in the criteria and recommended by the auditors. The increased expenditures for the Coronavirus Relief Fund (Assistance Listing number 21.019) and Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) in the SEFA of $241.3 million and $192.1 million, respectively, together with any future exclusions of negative expenditures resulting from the transfer of prior-year expenditures, will cause the lifetime expenditures on the SEFA schedule for these programs to reflect more expenditures than federal funding received. The Notes to the SEFA were also modified to indicate that the SEFA does not reflect a reduction for the prior year transferred expenditures. Anticipated Completion Date: Concurrent with the submission of the FY 2022-23 SEFA, which is anticipated to be November 2023 Auditor Recommendation: Carefully assess the transfer of prior-year expenditures in the current year to determine any potential effects on the total federal expenditures for the prior-year and the effect on the major program expenditures. Planned Corrective Action: DOA BFM will assess the transfer of prior-year expenditures in the current year to determine any potential effects on the total federal expenditures for the prior-year and the effect on the major program expenditures. It has been the practice of DOA BFM to assess the transfer of prior year expenditures in the current year and DOA BFM will continue to prioritize decisions with respect to the same to allow the Department to maximize the availability of federal funding for the purposes intended. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Colleen Holtan, Director Bureau of Financial Management Division of Enterprise Operations colleen.holtan@wisconsin.gov
We found that DOA did not complete FFATA reporting for any LIHEAP subawards in FY 2021-22. In its tracking spreadsheet, DOA reported the following LIHEAP subawards: -18 subawards were entered into in June 2021; -4 subawards were entered into in September 2021; -2 subawards were entered into in October 2021; -1 subaward was entered into in November 2021; -14 subawards were entered into in May 2022; and -4 subawards were entered into in June 2022. However, DOA did not enter these subawards into FSRS until February 21, 2023 and March 2, 2023, at the time of our audit fieldwork. Context: During FY 2021-22, DOA expended $205.6 million under LIHEAP of which $17.2 million was provided to subrecipients. We interviewed DOA staff to gain an understanding of the procedures for compiling information for subawards and submitting the information in FSRS. Questioned Costs: None. Effect: DOA did not comply with FFATA requirements for the timely reporting of subawards in FSRS for the LIHEAP grant. Cause: DEHCR used an old LIHEAP federal award identification number (FAIN) when providing the subaward information to the DOA Division of Executive Budget and Finance, which resulted in the subaward information being rejected in FSRS. Staff in the Division of Executive Budget and Finance assumed the LIHEAP subaward information was rejected because the FAIN had not been established in FSRS by the federal government. In February 2023, when DOA conducted a review of FFATA reporting, it became aware that an incorrect FAIN for LIHEAP was used. In February and March 2023, DOA entered the subawards in FSRS with the correct FAIN. Recommendation: We recommend the Wisconsin Department of Administration improve its Federal Funding Accountability and Transparency Act reporting procedures to ensure: -accurate award information, including the federal award identification number, is being used; -rejected subaward information is reviewed and communicated to the appropriate program staff for investigation and resolution; -documentation of rejected subaward information is maintained to demonstrate that the Department of Administration attempted to enter the subaward information; and -all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Finding 2022-104: Low-Income Home Energy Assistance Program?Federal Funding Accountability and Transparency Act Reporting Low-Income Home Energy Assistance Program (Assistance Listing number 93.568) Award Numbers Award Years 2101WILIEA 10/1/20?9/30/21 2201WILIEA 10/1/21?9/30/22 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-104: Low-Income Home Energy Assistance Program?Federal Funding Accountability and Transparency Act Reporting Background: DHHS provides funding to DEHCR for LIHEAP. This program is used to provide energy assistance to eligible low-income home owners and renters to reduce the energy burden in heating and cooling their homes. LIHEAP subawards of $30,000 or more are subject to Federal Funding Accountability and Transparency Act (FFATA) reporting. The intent of FFATA is to provide information about federal awards to allow the public access to the information to hold the government accountable for decisions. DEHCR developed a procedure to track subaward information for the LIHEAP grant, and this information was provided to the DOA Division of Executive Budget and Finance, which was responsible for entering the information into the FFATA Subaward Reporting System (FSRS). Criteria: Under 2 CFR s. 170, DOA is required to report in FSRS subawards of $30,000 or more, including any amendments or modifications to a subaward. This reporting is to be submitted no later than the last day of the month following the month in which the creation or change to the subaward was made. For example, if the subaward was made on November 7, 2021, it must be reported in FSRS not later than December 31, 2021. DOA identifies subawards required to be reported in FSRS for LIHEAP and tracks the subawards in a spreadsheet. Condition: We found that DOA did not complete FFATA reporting for any LIHEAP subawards in FY 2021-22. In its tracking spreadsheet, DOA reported the following LIHEAP subawards: -18 subawards were entered into in June 2021; -4 subawards were entered into in September 2021; -2 subawards were entered into in October 2021; -1 subaward was entered into in November 2021; -14 subawards were entered into in May 2022; and -4 subawards were entered into in June 2022. However, DOA did not enter these subawards into FSRS until February 21, 2023 and March 2, 2023, at the time of our audit fieldwork. Context: During FY 2021-22, DOA expended $205.6 million under LIHEAP of which $17.2 million was provided to subrecipients. We interviewed DOA staff to gain an understanding of the procedures for compiling information for subawards and submitting the information in FSRS. Questioned Costs: None. Effect: DOA did not comply with FFATA requirements for the timely reporting of subawards in FSRS for the LIHEAP grant. Cause: DEHCR used an old LIHEAP federal award identification number (FAIN) when providing the subaward information to the DOA Division of Executive Budget and Finance, which resulted in the subaward information being rejected in FSRS. Staff in the Division of Executive Budget and Finance assumed the LIHEAP subaward information was rejected because the FAIN had not been established in FSRS by the federal government. In February 2023, when DOA conducted a review of FFATA reporting, it became aware that an incorrect FAIN for LIHEAP was used. In February and March 2023, DOA entered the subawards in FSRS with the correct FAIN. Recommendation: We recommend the Wisconsin Department of Administration improve its Federal Funding Accountability and Transparency Act reporting procedures to ensure: -accurate award information, including the federal award identification number, is being used; -rejected subaward information is reviewed and communicated to the appropriate program staff for investigation and resolution; -documentation of rejected subaward information is maintained to demonstrate that the Department of Administration attempted to enter the subaward information; and -all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Finding 2022-104: Low-Income Home Energy Assistance Program?Federal Funding Accountability and Transparency Act Reporting Low-Income Home Energy Assistance Program (Assistance Listing number 93.568) Award Numbers Award Years 2101WILIEA 10/1/20?9/30/21 2201WILIEA 10/1/21?9/30/22 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
CAP for Finding: 2022-104 Auditor Recommendation: Improve Federal Funding Accountability and Transparency Act reporting procedures to ensure accurate award information, including the federal award identification number, is being used. Planned Corrective Action: The Wisconsin Department of Administration?s (Department or DOA) Bureau of Financial Management (BFM) and Division of Energy, Housing and Community Resources (DEHCR) will work together to implement procedures to ensure the accuracy of the award information that is transmitted to the Division of Executive Budget and Finance (DEBF), Systems, Operations and Federal Funds Team (Federal Funds Team) for Federal Funding Accountability and Transparency Act (FFATA) reporting. The procedures may include, among other things, DEHCR?s provision of the federal award document containing the federal award identification number (FAIN) to BFM concurrent with the request to establish the award for reporting. Anticipated Completion Date: June 30, 2023 Auditor Recommendation: Improve Federal Funding Accountability and Transparency Act reporting procedures to ensure rejected subaward information is reviewed and communicated to the appropriate program staff for investigation and resolution. Planned Corrective Action: The Department will improve FFATA reporting procedures to ensure rejected subaward information is reviewed and communicated to the appropriate program staff for investigation and resolution. DEBF?s Federal Funds Team will communicate error messages it receives for rejected reports in a timely manner to agency and program staff originating the reports, and the error log received from the FFATA Subaward Reporting System (FSRS) will be made available electronically for agency program staff as well as maintained for documentation purposes. Anticipated Completion Date: June 30, 2023 Auditor Recommendation: Improve Federal Funding Accountability and Transparency Act reporting procedures to ensure documentation of rejected subaward information is maintained to demonstrate that the Department of Administration attempted to enter the subaward information; and Planned Corrective Action: The Department will improve FFATA reporting procedures to ensure documentation of rejected subaward information is maintained to demonstrate that the Department attempted to enter the subaward information in FSRS. As previously noted, the Federal Funds Team will communicate to agency and program staff the error messages received for rejected reports and make available and maintain for archival purposes error logs received from FSRS. Additionally, the Federal Funds Team will record in the Wisconsin FFATA reporting system if an upload of the subaward information cannot be completed during the intended reporting period due to reasons that are beyond its control, such as delays in the federal government?s assignment of federal award identification numbers (FAINs) for new grant awards. Anticipated Completion Date: June 30, 2023 Auditor Recommendation: Improve Federal Funding Accountability and Transparency Act reporting procedures to ensure all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Planned Corrective Action: The Department takes seriously its responsibility to ensure all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified and submitted to FSRS in a timely manner. The Federal Funds Team in fulfilling its enterprise role related to FSRS reporting, delivered agency and program staff training on the requirements of 2 CFR s. 170, in February 2023, concurrent with the introduction of its new Wisconsin FFATA reporting system, and will highlight FFATA reporting requirements in its monthly reporting timeline communications. As previously noted, BFM and DEHCR will work together to implement improved procedures to ensure the accuracy of the award information that is transmitted to DEBF. They will also implement procedures to verify the completeness of the data that is uploaded to FSRS, including confirming the availability of the data in USAspending.gov. Anticipated Completion Date: June 30, 2023 Persons responsible for corrective action: Susan Brown, Administrator Division of Energy, Housing and Community Resources susan.brown@wisconsin.gov Colleen Holtan, Director Bureau of Financial Management Division of Enterprise Operations colleen.holtan@wisconsin.gov Dustin Trickle, Executive Policy and Budget Manager Division of Executive Budget and Finance dustin.trickle1@wisconsin.gov
In information submitted to FEMA to support reimbursement for costs related to personal protective equipment, we identified that DHS received reimbursements for transactions totaling $855,368 that should not have been included in its reimbursement request. Specifically, we found that DHS included a $395,000 payment for which it received a refund from the vendor. In addition, we found that DHS included a payment for $460,368 twice within the supporting documentation it provided to FEMA for its reimbursement request. Context: During FY 2021-22, DHS received reimbursements for costs associated with the public health emergency totaling $154.4 million from the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. We reviewed the supporting documentation for the two largest reimbursements and tested a selection of expenditures. Questioned Costs: $855,368 Effect: Because it received Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant funding for inappropriate expenditure transactions, DHS was not in compliance with federal requirements. Cause: The inappropriate expenditure transactions we identified were included in the first large reimbursement request prepared by DHS, which was based on information provided by another state agency. At the time of this reimbursement request, DHS did not have procedures in place to identify duplicate or refunded payments within the data used to support the reimbursement request. DHS staff indicated that subsequent reimbursement requests were prepared using DHS queries from STAR, which is the State?s accounting system, that removed duplicated or refunded transactions. We did not identify issues in the other reimbursement request we reviewed. Recommendation: We recommend the Wisconsin Department of Health Services work with the federal government to resolve the $855,368 in unallowable costs we identified. Finding 2022-300: Disaster Grants?Public Assistance (Presidentially Declared Disasters)?Unallowable Costs COVID-19?Disaster Grants?Public Assistance (Presidentially Declared Disasters) (Assistance Listing number 97.036) Award Number Award Year 4650DR4520PA 2022 Questioned Costs: $855,368 Type of Finding: Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-300: Disaster Grants?Public Assistance (Presidentially Declared Disasters)?Unallowable Costs Background: In February 2021, a presidential memorandum was issued extending certain federal support to increase the reimbursement and other assistance provided by the Federal Emergency Management Agency (FEMA) to states in order to combat COVID-19. The memorandum allowed FEMA to pay 100 percent of the costs of activities that had previously been determined to be eligible from the beginning of the public health emergency in January 2020. This funding was provided through the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant (Assistance Listing number 97.036). As a result, DHS changed the funding source of certain expenditures from a prior fiscal year by moving them to this grant in FY 2021-22. Criteria: Under 2 CFR 200.403, costs charged to a federal award must be necessary and reasonable for the performance of the federal award and be adequately documented. In addition, 2 CFR 200.402 requires that these costs must be reduced by any applicable credits, such as refunds for overpayments. Condition: In information submitted to FEMA to support reimbursement for costs related to personal protective equipment, we identified that DHS received reimbursements for transactions totaling $855,368 that should not have been included in its reimbursement request. Specifically, we found that DHS included a $395,000 payment for which it received a refund from the vendor. In addition, we found that DHS included a payment for $460,368 twice within the supporting documentation it provided to FEMA for its reimbursement request. Context: During FY 2021-22, DHS received reimbursements for costs associated with the public health emergency totaling $154.4 million from the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. We reviewed the supporting documentation for the two largest reimbursements and tested a selection of expenditures. Questioned Costs: $855,368 Effect: Because it received Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant funding for inappropriate expenditure transactions, DHS was not in compliance with federal requirements. Cause: The inappropriate expenditure transactions we identified were included in the first large reimbursement request prepared by DHS, which was based on information provided by another state agency. At the time of this reimbursement request, DHS did not have procedures in place to identify duplicate or refunded payments within the data used to support the reimbursement request. DHS staff indicated that subsequent reimbursement requests were prepared using DHS queries from STAR, which is the State?s accounting system, that removed duplicated or refunded transactions. We did not identify issues in the other reimbursement request we reviewed. Recommendation: We recommend the Wisconsin Department of Health Services work with the federal government to resolve the $855,368 in unallowable costs we identified. Finding 2022-300: Disaster Grants?Public Assistance (Presidentially Declared Disasters)?Unallowable Costs COVID-19?Disaster Grants?Public Assistance (Presidentially Declared Disasters) (Assistance Listing number 97.036) Award Number Award Year 4650DR4520PA 2022 Questioned Costs: $855,368 Type of Finding: Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendation.
CAP for Finding: 2022-300 DATE: March 20, 2023 TO: Erin Scharlau, Financial Audit Director Legislative Audit Bureau FROM: Barry Kasten, Director Bureau of Fiscal Services Department of Health Services SUBJECT: Corrective Action Plan ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? Unallowable Costs Department staff has reviewed the Legislative Audit Bureau?s (LAB) interim audit memo for Finding 2022-300: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? Unallowable Costs. This is the department?s Corrective Action Plan. ? Recommendation (2022-300): Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? Unallowable Costs We recommend the Wisconsin Department of Health Services: ? Work with the federal government to resolve the $855,368 in unallowable costs we identified. Wisconsin Department of Health Services Planned Corrective Action: DHS will reach out to the federal government as suggested to resolve this issue. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Barry Kasten, Director Bureau of Financial Services, Division of Enterprise Services barry.kasten@dhs.wisconsin.gov
We tested a sample of 26 payments and identified one payment for $5.60 that DHS paid during FY 2021 22 for which it could not provide documentation to support that the payment was for services authorized in the participant?s individual support and service plan. Context: Based on detailed payment data provided by DHS, there were approximately 12 million individual payments totaling $711.9 million paid to providers for care or services to IRIS participants during FY 2021-22. Payments under the program were generally small and, based upon the data provided, averaged $59.33 per payment. We selected a random sample of 26 payments and requested supporting documentation to support the payment and the related participant?s individual support and service plan authorizing the goods or services. We also interviewed DHS staff on the payment process and its oversight of the entities responsible for administering the IRIS program. Questioned Costs: We question the federal share of the unsupported $5.60 payment identified, or $3.70. Because our testing was based upon a sample of payments, it is likely there are additional cases where the payment is not supported. We estimate these additional questioned costs are likely over $25,000, which is required to be reported under 2 CFR 200.516. Effect: DHS did not comply with its approved waiver and inappropriately paid an IRIS provider for amounts that were not supported for the participant. Cause: Although we found the FEA approved the payment, the FEA indicated that there was an error made in entering the payment because the payment was not associated with the participant identified within the claim documentation. DHS, in reviewing the payment file from the FEA, did not review the detailed support for each individual IRIS claim payment and, therefore, DHS did not detect the error. Recommendation: We recommend the Wisconsin Department of Health Services work with the fiscal employer agent that improperly approved the payment we identified to determine how this payment was made, assess whether changes to current processes are needed, document its assessment, and implement corrective actions, as appropriate. Finding 2022-301: Medical Assistance Program?Home and Community-Based Services Unallowable Costs Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: $3.70 Type of Finding: Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-301: Medical Assistance Program?Home and Community Based Services Unallowable Costs Background: The U.S Department of Health and Human Services (DHHS) provides funding to DHS for the Medical Assistance (MA) Program (Assistance Listing number 93.778). Funding under the MA Program is used to assist states in maintaining and expanding health care services to certain categories of low-income persons. Under the MA Program, a state may obtain a waiver to provide Home and Community-Based Services (HCBS). Such a waiver may permit an individual to receive services in their own home or community rather than in institutions or other isolated settings. Under 1915(c) of the Social Security Act, Wisconsin has an approved waiver to administer the Include, Respect, I Self-Direct (IRIS) program. This program provides services to MA-eligible adults that facilitates participant choice, direction, and control over services designed to provide HCBS services as an alternative to institutional care. During FY 2021-22, DHS contracted with seven independent consulting agencies (ICA) that assisted IRIS participants in developing individual support and service plans that will meet each participant?s needs within the participant?s approved IRIS annual budget. Included in this plan are authorizations for specific services, the name of the entity or individuals to provide the goods or services, and the amount or frequency of goods or services. For example, a plan may include services that will be provided by a caretaker and could include the provider name, number of hours for a specific period, and the billing rate. These plans are approved by the ICA, with additional DHS approval required for certain services. DHS also contracted with four fiscal employer agents (FEAs) that are responsible for reviewing invoices in accordance with the approved individual support and service plan and for making payments. This review may include payments for services based upon an invoice or review of timesheets to support that the services were provided to the participant. The FEA submits to DHS information related to the approved payments, and DHS makes funds available to enable the FEA to make the payments. DHS reviews the total payment requests it received from each FEA before transferring funds to the FEA for payment to providers. Criteria: The approved waiver for IRIS requires the creation of an individual support and service plan and for services to be provided in accordance with this service plan. DHS has established the IRIS Policy Manual, which provides guidance to FEAs on determining allowed payments and requires a review of provider claims to ensure the claims are supported by documentation and the participant?s approved individual support and service plan. Condition: We tested a sample of 26 payments and identified one payment for $5.60 that DHS paid during FY 2021 22 for which it could not provide documentation to support that the payment was for services authorized in the participant?s individual support and service plan. Context: Based on detailed payment data provided by DHS, there were approximately 12 million individual payments totaling $711.9 million paid to providers for care or services to IRIS participants during FY 2021-22. Payments under the program were generally small and, based upon the data provided, averaged $59.33 per payment. We selected a random sample of 26 payments and requested supporting documentation to support the payment and the related participant?s individual support and service plan authorizing the goods or services. We also interviewed DHS staff on the payment process and its oversight of the entities responsible for administering the IRIS program. Questioned Costs: We question the federal share of the unsupported $5.60 payment identified, or $3.70. Because our testing was based upon a sample of payments, it is likely there are additional cases where the payment is not supported. We estimate these additional questioned costs are likely over $25,000, which is required to be reported under 2 CFR 200.516. Effect: DHS did not comply with its approved waiver and inappropriately paid an IRIS provider for amounts that were not supported for the participant. Cause: Although we found the FEA approved the payment, the FEA indicated that there was an error made in entering the payment because the payment was not associated with the participant identified within the claim documentation. DHS, in reviewing the payment file from the FEA, did not review the detailed support for each individual IRIS claim payment and, therefore, DHS did not detect the error. Recommendation: We recommend the Wisconsin Department of Health Services work with the fiscal employer agent that improperly approved the payment we identified to determine how this payment was made, assess whether changes to current processes are needed, document its assessment, and implement corrective actions, as appropriate. Finding 2022-301: Medical Assistance Program?Home and Community-Based Services Unallowable Costs Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: $3.70 Type of Finding: Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendation.
CAP for Finding: 2022-301 DATE: March 21, 2023 TO: Lisa Kasel, Assistant Financial Audit Director Legislative Audit Bureau FROM: Barry Kasten, Director Bureau of Fiscal Services Department of Health Services SUBJECT: Corrective Action Plan ? Medical Assistance Program ? Home and Community-Based Services Unallowable Costs Department staff has reviewed the Legislative Audit Bureau?s (LAB) interim audit memo for Finding 2022-301: Medical Assistance Program ? Home and Community-Based Services Unallowable Costs. This is the department?s Corrective Action Plan. ? Recommendation (2022-301): Medical Assistance Program ? Home and Community-Based Services Unallowable Costs We recommend the Wisconsin Department of Health Services: ? work with the fiscal employer agency that improperly approved the payment we identified to determine how this payment was made, assess whether changes to current processes are needed, document its assessment, and implement corrective actions, as appropriate. Wisconsin Department of Health Services Planned Corrective Action: Based on the LAB findings, the DMS Bureau of Quality and Oversight (BQO) will implement a Corrective Action Plan (CAP) with the IRIS Fiscal Employer Agent (FEA), iLIFE. A review of the LAB findings indicates that iLIFE inadvertently issued a payment to an IRIS participant-hired worker (PHW) based on a service authorization associated with a participant that the PHW did not support. The IRIS provider agreement indicates that FEA?s are responsible for verifying invoices, timesheets, and other claims for payment for services and periods of time authorized by participants? service plans. iLIFE indicated their system?s optical character recognition (OCR) misread a PHW?s employee identification number causing the payment to be sent to the wrong PHW resulting in an overpayment. iLIFE will be required to fix their OCR and review process to complete the CAP. BQO will issue a CAP notification to iLIFE by March 27, 2023. BQO will work with iLIFE to ensure the system errors are corrected to prevent further occurrences and anticipates the CAP will remain open for approximately 6 months. Anticipated Completion Date: September 2023 Person responsible for corrective action: Ann Lamberg, Deputy Director Bureau of Quality and Oversight, Division of Medicaid Services ann.lamberg@dhs.wisconsin.gov
We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards Background: The DOA, State Controller?s Office (SCO) is responsible for coordinating with the other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity, includes the total expenditures for the reporting period, and identifies any amounts provided to subrecipients for each federal program. Each state agency, including DHS, prepares a SEFA for the federal programs that it administers and provides this to DOA SCO. DOA SCO compiles the agency-level SEFAs into the statewide SEFA. DOA SCO performs desk reviews of the agency-level SEFAs to ensure the expenditures reconcile to the accounting records in STAR, which is the State?s accounting system. Criteria: Under 2 CFR 200.510 (b), the State is required to prepare a SEFA for the period covered by the State's financial statements and the SEFA must include the total federal awards expended. Under 2 CFR 200.502, the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Further, 2 CFR 200.514 indicates that the financial statements and SEFA must be for the same audit period. Finally, in accordance with Office of Management and Budget (OMB) Compliance Supplement, recipients and subrecipients of federal funding provided under the COVID-19 Emergency Acts, which includes funding the State received under the American Rescue Plan Act (ARPA), must separately identify the COVID-19 expenditures in the SEFA. Further, in its instructions to state agencies, DOA identified that separate reporting of COVID-19 Emergency Acts expenditures was required. Condition: We identified four concerns in our review of the DHS FY 2021-22 SEFA. First, we found DHS did not separately identify $329.2 million in FY 2021-22 expenditures as COVID-19 MA Program expenditures related to the enhanced federal medical assistance percentage for home and community-based services authorized under ARPA. Second, during FY 2021-22 DHS transferred $55.9 million in FY 2020-21 expenditures from the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) grant (Assistance Listing number 93.323) to the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. In the STAR General Ledger, the prior-year transferred expenditures resulted in a reduction in the ELC grant expenditures. In reporting these amounts in the FY 2021-22 SEFA, DHS did not make a subsequent adjustment to remove the expenditure adjustment from the total expenditures reported for the ELC grant. Third, DHS did not report all CSLFRF expenditures it incurred in FY 2021-22. DHS requested reimbursement from DOA as it incurred expenditures under the CSLFRF grant. In its FY 2021-22 SEFA, DHS reported $161.9 million in CSLFRF expenditures, which was the total expenditures for which it had received reimbursement from DOA. However, DHS had actually incurred $173.6 million in CSLFRF expenditures in FY 2021-22. Finally, DHS included a $2.6 million repayment of a prior-year overpayment as an expenditure for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant. This should have been excluded from total expenditures because it did not relate to FY 2021-22 program expenditures. Context: The State administered and reported in its SEFA $20.2 billion in federal financial assistance in FY 2021-22. DHS administered $11.9 billion in federal financial assistance in FY 2021-22. We reviewed the DHS SEFA to assess the reported expenditures, particularly for major programs. Questioned Costs: None. Effect: Although total expenditures for the MA Program were accurately reported, DHS did not accurately report $329.2 million as COVID-19 expenditures separately in the SEFA. Further, DHS underreported expenditures by $55.9 million for the ELC grant, underreported expenditures by $11.7 million for CSLFRF, and overreported expenditure by $2.6 million for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Cause: DHS did not consider the new enhanced federal funding it received for home and community-based services as amounts that should be identified as COVID-19 expenditures when compiling the SEFA. DHS sought to reflect the expenditures for the grant programs based on the amounts recorded in the STAR General Ledger. However, DHS did not consider that the negative expenditures resulting from the transfers of FY 2020-21 expenditures led to the underreporting of the ELC grant expenditures in the DHS SEFA. Further, for the CSLFRF grant, DHS indicated that it thought it was appropriate to report only what had been reimbursed by DOA. Finally, DHS overlooked the inclusion of a repayment of a prior-year overpayment when reporting its expenditures for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children grant program. Recommendation: We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: -properly identifying applicable COVID-19 expenditures; -adjusting expenditures for prior-year transfers of expenditures in the current year; -reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and -removing repayments of prior-year overpayments of expenditures from current-year expenditures. Finding 2022-302: Multiple Grants?Reporting in the Schedule of Expenditures of Federal Awards WIC Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing number 10.557) Award Number Award Year 16W1006 2016 COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 COVID-19?Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-06 2020 6 NU50CK000534-01-07 2020 6 NU50CK000534-01-08 2020 6 NU50CK000534-01-09 2021 6 NU50CK000534-02-00 2021 6 NU50CK000534-02-01 2021 6 NU50CK000534-02-05 2021 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing number 93.323) Award Numbers Award Years 6 NU50CK000534-01-00 2020 6 NU50CK000534-01-01 2020 6 NU50CK000534-02-00 2021 COVID-19?Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Medical Assistance Program (Assistance Listing number 93.778) Award Numbers Award Years 2105WI5MAP 2021 2205WI5MAP 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
CAP for Finding: 2022-302 DATE: March 27, 2023 TO: Carolyn Stittleburg, Deputy State Auditor for Financial Audit Legislative Audit Bureau FROM: Barry Kasten, Director Bureau of Fiscal Services Department of Health Services SUBJECT: Corrective Action Plan ? Multiple Grants ? Reporting in the Schedule of Expenditures of Federal Awards Department staff has reviewed the Legislative Audit Bureau?s (LAB) interim audit memo for Finding 2022-302: Multiple Grants - Reporting in the Schedule of Expenditures of Federal Awards. This is the department?s Corrective Action Plan. ? Recommendation (2022-302): Multiple Grants ? Reporting in the Schedule of Expenditures of Federal Awards We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: ? adjusting expenditures for prior-year transfers of expenditures in the current year. Wisconsin Department of Health Services Planned Corrective Action: DHS adjusted the expenditures for prior-year transfers of expenditures as recommended by LAB though DHS believes that there is no clearly defined direct authoritative guidance provided by OMB mandating a uniform method for reporting a transfer of prior year grant expenditures. Because of this, DHS believes it is prudent to seek confirmation of this treatment from the federal government going forward. LAB, in describing the effect, indicates that ?the State under-reported expenditures for the ELC grant by $55.9 million.? These expenditures were previously reported in prior fiscal years. Upon approval of the State?s FEMA project workbook, and in accordance with the compliance supplement, these previously reported expenditures were reported in FY 2021-22 under the Disaster Grants?Public Assistance (Presidentially Declared Disasters) (Assistance Listing number 97.036) grant. Without a matching reduction in expenditures to the ELC grant by $55.9 million, DHS is concerned that the lifetime expenditures on the SEFA schedule for these grant programs are going to reflect more expenditures than federal funding received. Additionally, because there is not direct authoritative guidance currently provided by OMB mandating a uniform method for reporting a transfer of prior year grant expenditures, DHS will work with DOA to seek clarification from the Federal Government on the proper treatment and reporting of transfers of prior year expenditures on the SEFA. Anticipated Completion Date: November 1, 2023 We recommend the Wisconsin Department of Health Services further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is: ? properly identifying applicable COVID-19 expenditures; ? reporting all federal expenditures for each federal grant program, regardless of whether the agency has received reimbursement from the pass-through entity; and ? removing repayments of prior-year overpayments of expenditures from current-year expenditures. Wisconsin Department of Health Services Planned Corrective Action: DHS will ensure that it reviews the instructions that are received from DOA and present the proper amounts in the SEFA. This will include a review of adjustments made to grants open in prior state fiscal years and verification that they have not already been reported on the SEFA in a prior year, such as the WIC adjustment identified. Anticipated Completion Date: November 1, 2023 Person responsible for corrective action: Barry Kasten, Director Bureau of Fiscal Services, Division of Enterprise Services barry.kasten@dhs.wisconsin.gov
We identified two concerns with DHS?s FFATA reporting during FY 2021 22. First, we found that four of the five subawards we reviewed that DHS had initiated through a purchase order in STAR were not reported in FSRS prior to our request in March 2023. The one subaward that was reported in FSRS was reported one month later than required. Second, we found that seven of the eight subawards we reviewed that DHS had initiated through CARS were not reported in FSRS in a timely manner and one had not been reported. For example, we found that five of the seven subawards were submitted more than one month later than required. Context: During FY 2021-22, DHS expended $94.8 million under the Immunization Cooperative Agreements program, of which $16.9 million was provided to subrecipients. We interviewed DHS staff to gain an understanding of the procedures for compiling information for subawards and for reporting the information in FSRS. For FY 2021-22, we selected 5 of the 119 subawards over $30,000 that DHS initiated through a purchase order in STAR and 8 of the 61 subawards over $30,000 that DHS initiated through CARS. We requested screenshots from FSRS for each subaward to assess if the subaward was reported in an accurate and timely matter. Questioned Costs: None. Effect: DHS did not comply with FFATA requirements for the reporting of subawards in FSRS. Cause: The queries DHS used to identify the subawards it initiated through a STAR purchase order did not accurately identify all applicable subawards subject to FFATA reporting. DHS indicated that it did not prioritize FFATA reporting to identify or review information that was required to be reported in FSRS to ensure all subawards were reported in a timely manner. Recommendation: We recommend the Wisconsin Department of Health Services: -update the queries used to identify subawards in the State?s accounting system, STAR, that are subject to Federal Funding Accountability and Transparency Act reporting to ensure all required subawards are identified; and -ensure all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Finding 2022-303: Federal Funding Accountability and Transparency Act Reporting?Immunization Cooperative Agreements COVID-19?Immunization Cooperative Agreements (Assistance Listing number 93.268) Award Numbers Award Years 20NH23IP922611C3 2020 20NH23IP922611VWCC6 2021 20NH23IP922611C5 2021 20NH23IP922611C6 2021 20NH23IP922611UDSPC5 2022 Questioned Costs: None Immunization Cooperative Agreements (Assistance Listing number 93.268) Award Numbers Award Years 19NH23IP922611 2021 19NH23IP922611 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-303: Federal Funding Accountability and Transparency Act Reporting?Immunization Cooperative Agreements Background: The U.S. Department of Health and Human Services Centers for Disease Control and Prevention provides funding to DHS for the Immunization Cooperative Agreements program. DHS provided a portion of this program to subrecipients during FY 2021-22. The Immunization Cooperative Agreements program subawards of $30,000 or more are subject to Federal Funding Accountability and Transparency Act (FFATA) reporting. The intent of FFATA is to provide information about federal awards to allow the public access to the information to hold the government accountable for decisions. Criteria: Under 2 CFR s. 170, DHS is required to report in the FFATA Subaward Reporting System (FSRS) subawards of $30,000 or more, including any amendments or modifications to a subaward. This reporting is to be completed no later than the last day of the month following the month in which the subaward was made. For example, if DHS signed a subaward contract on July 1, 2021, it must be reported in FSRS no later than August 31, 2021. During FY 2021-22, DHS staff would periodically identify subawards required to be reported using information compiled through queries of contracts established through DHS?s Community Aids Reporting System (CARS) and queries of purchase orders established in STAR, which is the State?s accounting system. Condition: We identified two concerns with DHS?s FFATA reporting during FY 2021 22. First, we found that four of the five subawards we reviewed that DHS had initiated through a purchase order in STAR were not reported in FSRS prior to our request in March 2023. The one subaward that was reported in FSRS was reported one month later than required. Second, we found that seven of the eight subawards we reviewed that DHS had initiated through CARS were not reported in FSRS in a timely manner and one had not been reported. For example, we found that five of the seven subawards were submitted more than one month later than required. Context: During FY 2021-22, DHS expended $94.8 million under the Immunization Cooperative Agreements program, of which $16.9 million was provided to subrecipients. We interviewed DHS staff to gain an understanding of the procedures for compiling information for subawards and for reporting the information in FSRS. For FY 2021-22, we selected 5 of the 119 subawards over $30,000 that DHS initiated through a purchase order in STAR and 8 of the 61 subawards over $30,000 that DHS initiated through CARS. We requested screenshots from FSRS for each subaward to assess if the subaward was reported in an accurate and timely matter. Questioned Costs: None. Effect: DHS did not comply with FFATA requirements for the reporting of subawards in FSRS. Cause: The queries DHS used to identify the subawards it initiated through a STAR purchase order did not accurately identify all applicable subawards subject to FFATA reporting. DHS indicated that it did not prioritize FFATA reporting to identify or review information that was required to be reported in FSRS to ensure all subawards were reported in a timely manner. Recommendation: We recommend the Wisconsin Department of Health Services: -update the queries used to identify subawards in the State?s accounting system, STAR, that are subject to Federal Funding Accountability and Transparency Act reporting to ensure all required subawards are identified; and -ensure all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Finding 2022-303: Federal Funding Accountability and Transparency Act Reporting?Immunization Cooperative Agreements COVID-19?Immunization Cooperative Agreements (Assistance Listing number 93.268) Award Numbers Award Years 20NH23IP922611C3 2020 20NH23IP922611VWCC6 2021 20NH23IP922611C5 2021 20NH23IP922611C6 2021 20NH23IP922611UDSPC5 2022 Questioned Costs: None Immunization Cooperative Agreements (Assistance Listing number 93.268) Award Numbers Award Years 19NH23IP922611 2021 19NH23IP922611 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
CAP for Finding: 2022-303 DATE: March 21, 2023 TO: Lisa Kasel, Assistant Financial Audit Director Legislative Audit Bureau FROM: Barry Kasten, Director Bureau of Fiscal Services Department of Health Services SUBJECT: Corrective Action Plan ? Federal Funding Accountability and Transparency Act Reporting ? Immunization Cooperative Agreements Department staff has reviewed the Legislative Audit Bureau?s (LAB) interim audit memo for Finding 2022-303: Federal Funding Accountability and Transparency Act Reporting ? Immunization Cooperative Agreements. This is the department?s Corrective Action Plan. ? Recommendation (2022-303): Federal Funding Accountability and Transparency Act Reporting? Immunization Cooperative Agreements We recommend the Wisconsin Department of Health Services: ? Update the queries used to identify subawards in the State?s accounting system, STAR, that are subject to Federal Funding Accountability and Transparency Act reporting to ensure all required subawards are identified; and ? Ensure all required subwards of $30,000 or more, including any amendments or modifications to a subaward, are identified and submitted to the Federal Fund Accountability and Transparency Act Subaward Reporting System in a timely manner. Wisconsin Department of Health Services Planned Corrective Action: BFS agrees that the circumstances shaped by the COVID emergency required BFS to prioritize tasks critical to essential functions over those with little to no financial impact. Furthermore, during this same period, there was turnover in this position. Lack of priority and new staffing led to late reporting. Additionally, procedural misunderstandings contributed to continued reporting delays of the correcting items identified in the first finding. The summer and early Fall of 2022 allowed for additional research, clarification, and catching up. Since November of 2022 there have been timely monthly uploads of collected data and it has continued to be reported monthly. BFS also agrees that LAB identified several contracts not yet reported. Upon discovery, BFS made it a priority to take steps necessary to immediately report the missing contracts on the FSRS site. Investigations into the missing contracts revealed that there was an issue with the query being used to pull the STAR data. Investigations into the CARS query led to discovery of the incorrect usage of the date parameters. DHS will correct the query errors and modify the FFATA procedures for accurate, complete, and timely reporting. Anticipated Completion Date: May 2023 Person responsible for corrective action: Vanessa Salata, Section Chief Expenditure Accounting Section Chief, Bureau of Fiscal Services, Division of Enterprise Services vanessaa.salata@dhs.wisconsin.gov
DHS did not have documentation to support that it was reviewing the quarterly reports and following its procedures to provide oversight over the expenditures charged to the program in FY 2021-22. We attempted to review 20 quarterly reports filed in FY 2021-22 for 10 public health departments. We identified two concerns. First, we found that the City of Milwaukee Public Health Department did not submit the two quarterly reports that were due in FY 2021-22. Therefore, DHS did not have documentation that it evaluated whether funding was expended on allowable activities under the grant program. The City of Milwaukee was reimbursed $3.6 million in expenditures in January 2022. On March 3, 2023, DHS put a hold on any further reimbursements to the City of Milwaukee Public Health Department until the issues with the missing quarterly reports are resolved. Second, we found that 12 of the remaining 18 quarterly reports we reviewed were submitted to DHS more than six months after the due date. Five of the 12 reports were dated after we made our request for the reports in February 2023. We also reviewed reports for the quarter ended June 30, 2022, for the 10 public health departments we selected for review. For three health departments, we found there were differences between the amounts reported to date on the quarterly reports and the total reimbursement provided by DHS as of the end of that quarter. DHS did not have documentation to show that it identified and resolved these differences. Context: DHS was awarded $58.4 million in CSLFRF funds for the Local and Tribal Health Department Response and Recovery Support program. The public health departments are considered beneficiaries under the program and, as such, this funding is not subject to the local or tribal government single audits. In FY 2021-22, DHS reimbursed the public health departments $6.7 million in expenditures for the program. The program ends on December 31, 2024. We reviewed the quarterly reports filed in FY 2021-22 for 10 of the 98 public health departments that were allocated funding for this program. We randomly selected 7 public health departments and selected the remaining three public health departments using a judgement sample based on a review of DHS?s quarterly report tracking spreadsheet. Questioned Costs: None. Effect: Because DHS controls related to the quarterly report are not working effectively, there is an increased risk of improper payments made using the CSLFRF grant funding. Cause: DHS did not have written policies and procedures for the tracking and review of the reports. In addition, DHS did not have documentation to support that it was tracking the timely receipt and review of the quarterly reports in FY 2021-22. At the end of FY 2021-22, DHS experienced turnover in staff responsible for administering the Local and Tribal Health Department Response and Recovery Support program. DHS indicated that the staff responsible for administering the program in FY 2021-22 did not document reviews of the quarterly reports. In a March 2, 2023 email to DHS, staff from the City of Milwaukee Public Health Department indicated that DHS staff had agreed to permit emails to explain the expenditure of funds in lieu of the quarterly reports. DHS did not provide these emails or other documentation to support this permission. Recommendation: We recommend the Wisconsin Department of Health Services: -develop and implement written policies and procedures for the review and tracking of the quarterly reports used to monitor expenditures under the Local and Tribal Health Department Response and Recovery Support program; -maintain the quarterly reports, document its review of the quarterly reports, and document its correspondence with the public health departments regarding resolution of reporting variances; -review the contracts with the public health departments and determine whether any revisions are needed to clarify expectations for documentation and timeliness of filing the quarterly reports; and -ensure it obtains quarterly reports to support the payments it made to the City of Milwaukee Public Health Department. Finding 2022-304: Coronavirus State and Local Fiscal Recovery Funds?Monitoring of Local and Tribal Health Department Response and Recovery Support Program Expenditures COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-304: Coronavirus State and Local Fiscal Recovery Funds?Monitoring of Local and Tribal Health Department Response and Recovery Support Program Expenditures Background: The State was advanced $1.3 billion in CSLFRF in May 2021 and another $1.3 billion in May 2022. CSLFRF was created under the American Rescue Plan Act (ARPA) and is administered by DOA. CSLFRF funding has certain stipulations, including that the funds must be used to: -respond to the public health emergency or its negative economic impacts; -respond to the needs of workers performing essential work during the public health emergency; -provide government services to the extent revenue losses due to the public health emergency reduced revenues; and -make necessary investments in water, sewer, or broadband infrastructure. Further, federal regulations stipulate that eligible expenditures must be incurred between March 3, 2021, and December 31, 2024, and funds must be spent through December 31, 2026. DOA entered into a memorandum of understanding with DHS to administer the Local and Tribal Health Department Response and Recovery Support program, which provides grants to local and tribal health departments for costs incurred to respond to the public health emergency. DHS entered into contracts with 98 local and tribal health departments. The contracts stipulate the allowable uses of the funding and reporting requirements. After incurring expenditures, the health departments may request reimbursement on a monthly basis using DHS?s CARS. Criteria: In accordance with 2 CFR s. 200.303, DHS is responsible for establishing and maintaining effective internal control over federal awards that provides reasonable assurance that it is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Further, under U.S. Department of the Treasury Final Rule (31 CFR Part 35), DHS must establish rigorous oversight and internal control processes to monitor compliance with any applicable requirements of CSLFRF funding. The contracts between DHS and each of the public health departments require the health departments to submit a quarterly report. DHS indicated that the quarterly report includes a list of expenditures for the quarter, a list of payroll costs, and a description of the uses of the funds, and it is due within 30 days of the end of the quarter. DHS tracks the receipt and review of the quarterly reports in a tracking spreadsheet. DHS indicated that it compares the reported expenditures in the quarterly report to the monthly reimbursement request data from CARS to ensure the amounts agree. Further, DHS indicated that it reviews the description of the uses of the funding from the quarterly report to evaluate the allowability of the reported expenses. DHS indicated that quarterly reports are required regardless of whether the public health department incurred expenditures during the quarter. Condition: DHS did not have documentation to support that it was reviewing the quarterly reports and following its procedures to provide oversight over the expenditures charged to the program in FY 2021-22. We attempted to review 20 quarterly reports filed in FY 2021-22 for 10 public health departments. We identified two concerns. First, we found that the City of Milwaukee Public Health Department did not submit the two quarterly reports that were due in FY 2021-22. Therefore, DHS did not have documentation that it evaluated whether funding was expended on allowable activities under the grant program. The City of Milwaukee was reimbursed $3.6 million in expenditures in January 2022. On March 3, 2023, DHS put a hold on any further reimbursements to the City of Milwaukee Public Health Department until the issues with the missing quarterly reports are resolved. Second, we found that 12 of the remaining 18 quarterly reports we reviewed were submitted to DHS more than six months after the due date. Five of the 12 reports were dated after we made our request for the reports in February 2023. We also reviewed reports for the quarter ended June 30, 2022, for the 10 public health departments we selected for review. For three health departments, we found there were differences between the amounts reported to date on the quarterly reports and the total reimbursement provided by DHS as of the end of that quarter. DHS did not have documentation to show that it identified and resolved these differences. Context: DHS was awarded $58.4 million in CSLFRF funds for the Local and Tribal Health Department Response and Recovery Support program. The public health departments are considered beneficiaries under the program and, as such, this funding is not subject to the local or tribal government single audits. In FY 2021-22, DHS reimbursed the public health departments $6.7 million in expenditures for the program. The program ends on December 31, 2024. We reviewed the quarterly reports filed in FY 2021-22 for 10 of the 98 public health departments that were allocated funding for this program. We randomly selected 7 public health departments and selected the remaining three public health departments using a judgement sample based on a review of DHS?s quarterly report tracking spreadsheet. Questioned Costs: None. Effect: Because DHS controls related to the quarterly report are not working effectively, there is an increased risk of improper payments made using the CSLFRF grant funding. Cause: DHS did not have written policies and procedures for the tracking and review of the reports. In addition, DHS did not have documentation to support that it was tracking the timely receipt and review of the quarterly reports in FY 2021-22. At the end of FY 2021-22, DHS experienced turnover in staff responsible for administering the Local and Tribal Health Department Response and Recovery Support program. DHS indicated that the staff responsible for administering the program in FY 2021-22 did not document reviews of the quarterly reports. In a March 2, 2023 email to DHS, staff from the City of Milwaukee Public Health Department indicated that DHS staff had agreed to permit emails to explain the expenditure of funds in lieu of the quarterly reports. DHS did not provide these emails or other documentation to support this permission. Recommendation: We recommend the Wisconsin Department of Health Services: -develop and implement written policies and procedures for the review and tracking of the quarterly reports used to monitor expenditures under the Local and Tribal Health Department Response and Recovery Support program; -maintain the quarterly reports, document its review of the quarterly reports, and document its correspondence with the public health departments regarding resolution of reporting variances; -review the contracts with the public health departments and determine whether any revisions are needed to clarify expectations for documentation and timeliness of filing the quarterly reports; and -ensure it obtains quarterly reports to support the payments it made to the City of Milwaukee Public Health Department. Finding 2022-304: Coronavirus State and Local Fiscal Recovery Funds?Monitoring of Local and Tribal Health Department Response and Recovery Support Program Expenditures COVID-19?Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
CAP for Finding: 2022-304 DATE: March 23, 2023 TO: Carolyn Stittleburg, Deputy State Auditor Legislative Audit Bureau FROM: Barry Kasten, Director Bureau of Fiscal Services Department of Health Services SUBJECT: Corrective Action Plan ? Coronavirus State and Local Fiscal Recovery Funds ? Monitoring of Local and Tribal Health Department Response and Recovery Support Program Expenditures Department staff has reviewed the Legislative Audit Bureau?s (LAB) interim audit memo for Finding 2022-304: Coronavirus State and Local Fiscal Recovery Funds ? Monitoring of Local and Tribal Health Department Response and Recovery Support Program Expenditures. This is the department?s Corrective Action Plan. ? Recommendation (2022-304): Coronavirus State and Local Fiscal Recovery Funds ? Monitoring of Local and Tribal Health Department Response and Recovery Support Program Expenditures We recommend the Wisconsin Department of Health Services: ? Develop and implement written policies and procedures for the review and tracking of the quarterly reports used to monitor expenditures under the Local and Tribal Health Department Response and Recovery Support program. Wisconsin Department of Health Services Planned Corrective Action: As beneficiaries, the Treasury Guidance indicates that Local and Tribal Health Departments are not subject to subrecipient monitoring and reporting requirements. The designation of beneficiary is unique to the CSLFRF and thus is not as familiar to DHS as the subrecipient designation and subsequent reporting requirements. The uncertainty surrounding this designation resulted in DPH not following the best practices described in the DPH Contract Management Manual. DPH?s Contract Management Manual outlines requirements and best practices for contract management. This Manual describes how to best review and track expenditures to monitor expenditures. The Manual encourages the best practice of requesting enhanced expenditure reporting from agencies, in addition to the reporting required for CARS payments. The Manual describes the role of the contract administrator in reviewing the expenditure information against the approved budget to ensure expenses are reasonable and allowable. The Manual also suggests maintaining copies of submitted reports and verifying the amounts in the submitted reports correspond to CARS reports. Examples of expenditure tracking are provided as is a description of how this tracking and other fiscal monitoring supports bureaus within DPH and DHS. DHS will review the existing policies and procedures in the Contract Management Manual to ensure that the level of detail is sufficient to prevent further non-compliance. We recommend the Wisconsin Department of Health Services: ? Maintain the quarterly reports, document its review of the quarterly reports, and document its correspondence with the public health departments regarding resolution of reporting variances. Wisconsin Department of Health Services Planned Corrective Action: DPH hired a position in June 2022 to manage and track expenditures and reporting for its Coronavirus State and Local Fiscal Recovery Funds granted to locals and tribal public health departments. DPH will continue to review, track, and maintain quarterly reports, and document correspondence with the local and tribal public health departments per best practices in the DPH Contract Management Manual. We recommend the Wisconsin Department of Health Services: ? Review the contracts with the public health departments and determine whether any revisions are needed to clarify expectations for documentation and timeliness of filing the quarterlyreports; and Wisconsin Department of Health Services Planned Corrective Action: DPH will review its contracts with the local and tribal public health departments and ensure timely filing of quarterly reports. Specific areas of non-compliance have been identified and division staff will review and draft updated scope of work language to mitigate delays in reporting from our local partners. We recommend the Wisconsin Department of Health Services: ? Ensure it obtains quarterly reports to support the payments it made to the City of Milwaukee Public Health Department. Wisconsin Department of Health Services Planned Corrective Action: DPH has now obtained quarterly reports from the City of Milwaukee Public Health Department and is in the process of reviewing them. Division staff will work with the City of Milwaukee Health Department to ensure future compliance. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Karen Drogsvold, Budget Section Manager Division of Public Health, Bureau of Operations karen.drogsvold@dhs.wisconsin.gov
We found that none of the 40 SEI subawards we reviewed were reported in a timely manner in FSRS. All 40 subawards were made in July 2021 and should have been reported in FSRS by August 31, 2021. However, DPI did not report 38 of the subawards in FSRS until October 2021. In addition, we found 2 of the 40 SEI subawards we reviewed were not reported until February 2023 when we identified them to DPI. Context: During FY 2021-22, DPI expended $32.8 million under SEI of which $31.3 million was provided to subrecipients. DPI awarded 451 SEI subawards during FY 2021-22. We interviewed DPI staff to gain an understanding of the procedures for compiling information for subawards and submitting the information in FSRS. We requested screenshots from FSRS and subaward documentation from DPI to support the information reported for FFATA. Questioned Costs: None. Effect: DPI did not comply with FFATA requirements for the timely reporting of subawards in FSRS. Cause: Although DPI took corrective action in responding to Finding 2021 401, which was included in report 22-5, the improved internal controls were not in place for all of FY 2021-22. For example, DPI implemented improvements to its FFATA submission process by July 2022, which was subsequent to the 40 subawards we identified that DPI was required to report in FSRS in August 2021. These improvements included making enhancements to its grant tracking system to create a report identifying subawards required to be reported under FFATA and developing an approval tracking document that is reviewed monthly by a supervisor. DPI completed initial subawards for SEI subrecipients in July 2021 and finalized the amounts for the subawards in September 2021. DPI then reported 38 of the SEI subawards in FSRS in October 2021. For the two SEI subawards we identified that were not reported until February 2023, DPI indicated that an error occurred during the October 2021 submission process that prevented these subawards from being uploaded to FSRS. Although subsequent manual entry was attempted, DPI staff indicated that follow-up on the two subawards did not occur when the manual entry was unsuccessful. At that time, other detective procedures were not in place to identify that FFATA reporting had not occurred for the two subawards. Recommendation: We recommend the Wisconsin Department of Public Instruction: -report in a timely manner all applicable subawards greater than $30,000 and subject to Federal Funding Accountability and Transparency Act reporting when initiated in the Federal Funding Accountability and Transparency Act Subaward Reporting System; -ensure all rejected submissions are detected and corrected in a timely manner; and -continue to enhance the internal controls it implemented to its Federal Funding Accountability and Transparency Act submission process to ensure all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified in a timely manner and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System. Finding 2022-400: Supporting Effective Instruction State Grants?Federal Funding Accountability and Transparency Act Reporting Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Assistance Listing number 84.367) Award Number Award Period S367A210047 7/1/2021?9/30/2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Public Instruction: The Wisconsin Department of Public Instruction agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-400: Supporting Effective Instruction State Grants?Federal Funding Accountability and Transparency Act Reporting Background: The U.S. Department of Education provides funding to DPI through the SEI program in Title II, Part A of the Elementary and Secondary Education Act (ESEA), as amended by the Every Student Succeeds Act (ESSA). The purpose of the grant program is to provide assistance to schools to increase student achievement and close achievement gaps by offering professional development opportunities in core academic areas. SEI subawards of $30,000 or more are subject to Federal Funding Accountability and Transparency Act (FFATA) reporting. The intent of FFATA is to provide information about federal awards to allow the public access to the information to hold the government accountable for decisions. In report 22-5, we reported concerns with DPI?s procedures and controls over FFATA reporting for a different grant program (Finding 2021-401). We recommended that DPI improve its FFATA submission process to ensure all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified and reported in a timely manner. Criteria: Under 2 CFR s. 170, DPI is required to report in the FFATA Subaward Reporting System (FSRS) subawards of $30,000 or more, including any amendments or modifications to a subaward. This reporting is to be submitted no later than the last day of the month following the month in which the subaward was made. For example, if the subaward was made on November 7, 2021, it must be reported in FSRS not later than December 31, 2021. DPI identifies subawards required to be reported in FSRS using information from DPI?s subaward tracking system. Condition: We found that none of the 40 SEI subawards we reviewed were reported in a timely manner in FSRS. All 40 subawards were made in July 2021 and should have been reported in FSRS by August 31, 2021. However, DPI did not report 38 of the subawards in FSRS until October 2021. In addition, we found 2 of the 40 SEI subawards we reviewed were not reported until February 2023 when we identified them to DPI. Context: During FY 2021-22, DPI expended $32.8 million under SEI of which $31.3 million was provided to subrecipients. DPI awarded 451 SEI subawards during FY 2021-22. We interviewed DPI staff to gain an understanding of the procedures for compiling information for subawards and submitting the information in FSRS. We requested screenshots from FSRS and subaward documentation from DPI to support the information reported for FFATA. Questioned Costs: None. Effect: DPI did not comply with FFATA requirements for the timely reporting of subawards in FSRS. Cause: Although DPI took corrective action in responding to Finding 2021 401, which was included in report 22-5, the improved internal controls were not in place for all of FY 2021-22. For example, DPI implemented improvements to its FFATA submission process by July 2022, which was subsequent to the 40 subawards we identified that DPI was required to report in FSRS in August 2021. These improvements included making enhancements to its grant tracking system to create a report identifying subawards required to be reported under FFATA and developing an approval tracking document that is reviewed monthly by a supervisor. DPI completed initial subawards for SEI subrecipients in July 2021 and finalized the amounts for the subawards in September 2021. DPI then reported 38 of the SEI subawards in FSRS in October 2021. For the two SEI subawards we identified that were not reported until February 2023, DPI indicated that an error occurred during the October 2021 submission process that prevented these subawards from being uploaded to FSRS. Although subsequent manual entry was attempted, DPI staff indicated that follow-up on the two subawards did not occur when the manual entry was unsuccessful. At that time, other detective procedures were not in place to identify that FFATA reporting had not occurred for the two subawards. Recommendation: We recommend the Wisconsin Department of Public Instruction: -report in a timely manner all applicable subawards greater than $30,000 and subject to Federal Funding Accountability and Transparency Act reporting when initiated in the Federal Funding Accountability and Transparency Act Subaward Reporting System; -ensure all rejected submissions are detected and corrected in a timely manner; and -continue to enhance the internal controls it implemented to its Federal Funding Accountability and Transparency Act submission process to ensure all required subawards of $30,000 or more, including any amendments or modifications to a subaward, are identified in a timely manner and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System. Finding 2022-400: Supporting Effective Instruction State Grants?Federal Funding Accountability and Transparency Act Reporting Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Assistance Listing number 84.367) Award Number Award Period S367A210047 7/1/2021?9/30/2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Public Instruction: The Wisconsin Department of Public Instruction agrees with the audit finding and recommendations.
CAP for Finding: 2022-400 Finding 2022-400: Supporting Effective Instruction State Grants?Federal Funding Accountability and Transparency Act Reporting Planned Corrective Action: The Department of Public Instruction (DPI) has implemented some new procedures related to FFATA reporting, while continuing to review and update for completeness. One change is within the WISEgrants system to help identify missing awards for FFATA reporting. If there is an issue with entering a specific subaward into Federal Funding Accountability and Transparency Subaward Reporting System (FSRS), DPI will add a note to the applicable Federal Award Identification Number (FAIN) in the WISEgrants system FFATA Reporting - Monthly screen and create an FSD.gov Incident (FSD - Help Desk Ticket). Once the subaward is successfully entered into FSRS, the previously entered FFATA Reporting ? Monthly note, will be updated to show that the subawards have been successfully added to the FSRS. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Angeline Gaster, Assistant Director School Financial Services Team Division for Finance and Management Department of Public Instruction angeline.gaster@dpi.wi.gov
During our current audit, and after April 2022, we found DWD improved its procedures for the preparation and review of the UI performance and special reports, and it retained documentation to support the amounts included in each report it submitted to the federal government. However, for those reports that DWD submitted to the federal government prior to our recommendations in April 2022, we continued to find that the supporting documentation DWD provided did not agree with the amounts it reported on the ETA 9052 performance report. Specifically, we identified that for the November 2021 ETA 9052 performance report we reviewed, the amounts reported for 35 of 110 key line items reviewed did not agree with the supporting documentation provided. Context: We interviewed DWD staff to gain an understanding of the procedures for preparing the UI program performance and special reports. During FY 2021-22, DWD was required to submit 12 ETA 9050 performance reports, 12 ETA 9052 performance reports, and 4 ETA 2208A special reports to DOL. We reviewed: -the ETA 9050 performance reports submitted for the months of November 2021 and April 2022; -the ETA 9052 performance reports submitted for the months of November 2021, April 2022, and May 2022; and -the March 2022 quarterly ETA 2208A special report. We also requested DWD?s documentation to support the reported information for each section or amount identified by the federal government as a key section or key line item. Questioned Costs: None. Effect: DWD cannot be assured that it reported complete and accurate information during the entire fiscal year to enable DOL to assess the outcomes of Wisconsin?s UI program. Cause: Prior to April 2022, which is when we communicated our concerns with the accuracy of the ETA 9052 performance report, DWD did not establish adequate procedures to ensure the accuracy of the report. Recommendation: We recommend the Wisconsin Department of Workforce Development continue to make progress in developing and implementing adequate procedures for the preparation and review of the Unemployment Insurance program?s performance reports to ensure the accuracy of the amounts reported to the federal government. Finding 2022-600: Unemployment Insurance Program?Reporting COVID-19?Unemployment Insurance (Assistance Listing number 17.225) Award Numbers Award Years None 2021 None 2022 Unemployment Insurance (Assistance Listing number 17.225) Award Numbers Award Years None 2021 None 2022 Questioned Costs: None. Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Workforce Development: The Wisconsin Department of Workforce Development agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-600: Unemployment Insurance Program?Reporting Background: As a part of its administration of the UI program, DWD is required to complete and submit multiple performance and special reports to the U.S. Department of Labor (DOL), including the monthly ETA 9052, Nonmonetary Determination Time Lapse Detection. These reports contain information related to Wisconsin?s UI program that assist DOL in evaluating the performance of the program and contain information that is of interest to DOL. In our prior audit, we found that DWD did not establish adequate procedures to ensure the accuracy of the performance and special reports. In April 2022, we recommended that DWD develop and implement adequate procedures for the preparation and review of the UI performance and special reports to ensure the accuracy of the amounts reported to the federal government. We also recommended that DWD retain documentation to support the amounts included in each report it submits to the federal government (Finding 2021-600). Criteria: Under 2 CFR s. 200.303, DWD is required to establish and maintain effective internal controls over its federal programs to provide reasonable assurance that the federal programs are administered in compliance with federal statutes and regulations as well as the terms and conditions of its federal awards. This includes effective internal controls over the preparation of reports for the federal government. Condition: During our current audit, and after April 2022, we found DWD improved its procedures for the preparation and review of the UI performance and special reports, and it retained documentation to support the amounts included in each report it submitted to the federal government. However, for those reports that DWD submitted to the federal government prior to our recommendations in April 2022, we continued to find that the supporting documentation DWD provided did not agree with the amounts it reported on the ETA 9052 performance report. Specifically, we identified that for the November 2021 ETA 9052 performance report we reviewed, the amounts reported for 35 of 110 key line items reviewed did not agree with the supporting documentation provided. Context: We interviewed DWD staff to gain an understanding of the procedures for preparing the UI program performance and special reports. During FY 2021-22, DWD was required to submit 12 ETA 9050 performance reports, 12 ETA 9052 performance reports, and 4 ETA 2208A special reports to DOL. We reviewed: -the ETA 9050 performance reports submitted for the months of November 2021 and April 2022; -the ETA 9052 performance reports submitted for the months of November 2021, April 2022, and May 2022; and -the March 2022 quarterly ETA 2208A special report. We also requested DWD?s documentation to support the reported information for each section or amount identified by the federal government as a key section or key line item. Questioned Costs: None. Effect: DWD cannot be assured that it reported complete and accurate information during the entire fiscal year to enable DOL to assess the outcomes of Wisconsin?s UI program. Cause: Prior to April 2022, which is when we communicated our concerns with the accuracy of the ETA 9052 performance report, DWD did not establish adequate procedures to ensure the accuracy of the report. Recommendation: We recommend the Wisconsin Department of Workforce Development continue to make progress in developing and implementing adequate procedures for the preparation and review of the Unemployment Insurance program?s performance reports to ensure the accuracy of the amounts reported to the federal government. Finding 2022-600: Unemployment Insurance Program?Reporting COVID-19?Unemployment Insurance (Assistance Listing number 17.225) Award Numbers Award Years None 2021 None 2022 Unemployment Insurance (Assistance Listing number 17.225) Award Numbers Award Years None 2021 None 2022 Questioned Costs: None. Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Workforce Development: The Wisconsin Department of Workforce Development agrees with the audit finding and recommendation.
CAP for Finding: 2022-600 Finding 2022-600: Unemployment Insurance Program?Reporting 1. RECOMMENDATION: Continue to make progress in developing and implementing adequate procedures for the preparation and review of the Unemployment Insurance program's performance reports to ensure the accuracy of the amounts reported to the federal government. Planned Corrective Action: DWD developed and implemented adequate procedures for the preparation and review of the UI performance and special reports to ensure the accuracy of amounts reported to the federal government; and retains documentation to support the amounts included in each report it submits to the federal government. Anticipated Completion Date: Completed before September 30, 2022 Name, Title: Jim Chiolino, Administrator Division or Unit (If applicable): Unemployment Insurance Division Email address: jim.chiolino@dwd.wisconsin.gov CC: Pamela McGillivray Lynda Jarstad Jason Schunk
2021-600
UW-Madison did not perform a physical inventory of all federal equipment during the period from July 1, 2020, through June 30, 2022. Context: Based on available records, UW Madison reported a total federal equipment acquisition value of $332.9 million as of June 30, 2022. Based on these records, and from July 1, 2020, through June 30, 2022, UW Madison had 7,102 federal equipment items subject to the biennial physical inventory requirement. UW Madison performed a physical inventory of 2,688 federal equipment items from July 1, 2020, through June 30, 2022, but during this period it did not perform a physical inventory of 4,414 federal equipment items (62.2 percent). We discussed UW Madison?s procedures with the central accounting staff responsible for scheduling physical inventories of UW Madison departments, obtained documentation of physical inventories UW Madison performed, and conducted other testing of UW Madison?s management of federal equipment. Questioned Costs: None. Effect: Without completion of regular physical inventories of federal equipment, UW Madison is at increased risk of theft or loss of equipment, it cannot be assured that federal equipment records were accurately maintained, and it may not be aware of all equipment disposals or losses, which may result in a failure to reimburse the federal agency that originally funded the equipment purchase with any proceeds from its disposal. Cause: Due to staffing turnover of both central accounting staff and department staff, UW-Madison indicated that it waived the requirement to perform physical inventories of equipment items by June 30, 2022. However, UW Madison did not provide documentation of the waiver or federal approval to waive this requirement. We found two of the four UW Madison central accounting positions experienced turnover in spring 2021, which contributed to a backlog in the physical inventories UW Madison had planned to complete during FY 2020 21. As a result, during FY 2021 22 UW Madison central accounting staff stated that they focused on eliminating the backlog rather than on initiating new physical inventories at certain departments. Given the volume of equipment managed by UW Madison and the various locations of the equipment, it is important that physical inventories are performed regularly to limit the risk of theft or loss of federal equipment. Recommendation: We recommend the University of Wisconsin Madison conduct physical inventories of federal equipment as required by federal regulations and its existing policies and procedures, or seek a waiver from the federal cognizant agency. Finding 2022-700: Research and Development Cluster?Physical Inventory Requirements for Federal Equipment Research and Development Cluster (various Assistance Listing numbers) Award Numbers Award Years Various Various Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the University of Wisconsin Madison: The University of Wisconsin-Madison agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-700: Research and Development Cluster?Physical Inventory Requirements for Federal Equipment Background: During FY 2021-22, UW institutions were awarded $741.6 million in federal funding as part of the Research and Development Cluster, for which UW Madison expended the majority of the funding. UW Madison used a portion of these federal funds, and similar funding from prior years, to purchase equipment needed for research activities. When UW-Madison purchases equipment using federal funding (federal equipment), it must maintain comprehensive records of each federal equipment item, periodically conduct a physical inventory of the equipment, and reimburse the federal agency that originally funded the equipment purchase with any proceeds from the disposal of the equipment no longer needed for research activities. Criteria: Under 2 CFR s. 200.313 (d) (2), UW-Madison is required to biennially complete a physical inventory of all federal equipment and reconcile the results with its records. UW System Policy 334, Accountability for Capital Equipment, and UW Madison Procedure 3008.6, Physical Inventory Procedure, require biennial physical inventories of federal equipment. To comply with these policies and procedures, UW Madison has assigned central accounting staff the responsibility for tracking federal equipment and scheduling physical inventories. Staff within various UW Madison departments are responsible for safekeeping the equipment, locating items during physical inventories, and authorizing disposal when specific equipment is no longer useful. Under 2 CFR s. 200.313 (e) UW Madison is required to potentially provide repayment to the federal agency that originally funded the equipment purchase when federal equipment is no longer needed for research activities. Condition: UW-Madison did not perform a physical inventory of all federal equipment during the period from July 1, 2020, through June 30, 2022. Context: Based on available records, UW Madison reported a total federal equipment acquisition value of $332.9 million as of June 30, 2022. Based on these records, and from July 1, 2020, through June 30, 2022, UW Madison had 7,102 federal equipment items subject to the biennial physical inventory requirement. UW Madison performed a physical inventory of 2,688 federal equipment items from July 1, 2020, through June 30, 2022, but during this period it did not perform a physical inventory of 4,414 federal equipment items (62.2 percent). We discussed UW Madison?s procedures with the central accounting staff responsible for scheduling physical inventories of UW Madison departments, obtained documentation of physical inventories UW Madison performed, and conducted other testing of UW Madison?s management of federal equipment. Questioned Costs: None. Effect: Without completion of regular physical inventories of federal equipment, UW Madison is at increased risk of theft or loss of equipment, it cannot be assured that federal equipment records were accurately maintained, and it may not be aware of all equipment disposals or losses, which may result in a failure to reimburse the federal agency that originally funded the equipment purchase with any proceeds from its disposal. Cause: Due to staffing turnover of both central accounting staff and department staff, UW-Madison indicated that it waived the requirement to perform physical inventories of equipment items by June 30, 2022. However, UW Madison did not provide documentation of the waiver or federal approval to waive this requirement. We found two of the four UW Madison central accounting positions experienced turnover in spring 2021, which contributed to a backlog in the physical inventories UW Madison had planned to complete during FY 2020 21. As a result, during FY 2021 22 UW Madison central accounting staff stated that they focused on eliminating the backlog rather than on initiating new physical inventories at certain departments. Given the volume of equipment managed by UW Madison and the various locations of the equipment, it is important that physical inventories are performed regularly to limit the risk of theft or loss of federal equipment. Recommendation: We recommend the University of Wisconsin Madison conduct physical inventories of federal equipment as required by federal regulations and its existing policies and procedures, or seek a waiver from the federal cognizant agency. Finding 2022-700: Research and Development Cluster?Physical Inventory Requirements for Federal Equipment Research and Development Cluster (various Assistance Listing numbers) Award Numbers Award Years Various Various Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the University of Wisconsin Madison: The University of Wisconsin-Madison agrees with the audit finding and recommendation.
CAP for Finding: 2022-700 Finding 2022-700: Research and Development Cluster?Physical Inventory Requirements for Federal Equipment Planned Corrective Action: The University agrees with the condition that we did not perform a physical inventory of all federal equipment during the period from July 1, 2020, through June 30, 2022, because of staffing issues and backlog in the FY 2020-21 physical inventories. Much of the staffing issues were related to Covid-19 both physical availability and turnover. As operations have since normalized, we do not believe a corrective action plan to our procedures is needed. However, we do recognize that we need to catch up on the backlog of inventory. Since June 30, 2022, Property Control has hired three new employees and is now fully staffed. We are in the middle of conducting the FY 2022-23 physical inventories. We selected 45 departments and a total of 6089 assets. Of the total asset count 5295 were federal equipment, which is 62% of all federal equipment for FY 2022-23. We have received 19 departments? inventory submissions and have completed 4 of them. The Property Control team along with campus staff are working diligently to get these inventories completed by year-end June 30, 2023. We have every confidence that rest of the 38% of federal equipment will be inventoried as required under 2 CFR s. 200.313 (d) (2) by fiscal year end 2024. Anticipated Completion Date: 6/30/2024 Person responsible for corrective action: Cha Ying Lor, Finance Associate Director Division of Business Services Accounting Services ? Financial Information Management chaying.lor@wisc.edu
UW-La Crosse used a total of $127,448 of its HEERF institutional aid allocation for consulting, advertising, and recruitment costs to increase student enrollment. Context: During FY 2021-22, UW-La Crosse used $2.9 million of its total HEERF institutional aid allocation. We reviewed 151 transactions for which UW-La Crosse used HEERF institutional aid, including the largest 10 transactions made using funds appropriated by ARPA. We reviewed whether each transaction met the requirements of federal legislation, guidance from the U.S. Department of Education, the agreements UW-La Crosse signed with the U.S. Department of Education, and Uniform Guidance. To complete our testing, we requested information or supporting documentation for each transaction and interviewed UW-La Crosse staff. Questioned Costs: $127,448 Effect: Because unallowable costs were charged to HEERF, UW-La Crosse was not in compliance with federal requirements for the use of its HEERF institutional aid allocation. UW-La Crosse received federal reimbursement of $127,448 for unallowable costs during FY 2021 22. Cause: UW La Crosse interpreted the federal guidance to permit the costs for which it used its HEERF institutional aid allocation because the intention of the services was to increase enrollment that had declined during the public health emergency. After we questioned the use of HEERF funds, UW-La Crosse subsequently returned the funding. Recommendation: We recommend the University of Wisconsin La Crosse ensure that all expenses charged to the Higher Education Emergency Relief Fund (HEERF) program are allowable, such as performing an additional review of those costs allocated to HEERF and document the performance of such a review. Finding 2022-701: Higher Education Emergency Relief Fund?UW-La Crosse Institutional Aid Allowable Costs COVID-19?Higher Education Emergency Relief Fund (Assistance Listing number 84.425F) Award Number Award Year P425F200067 2021 Questioned Costs: $127,448 Type of Finding: Noncompliance Response from the University of Wisconsin La Crosse: The University of Wisconsin-La Crosse agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-701: Higher Education Emergency Relief Fund?UW-La Crosse Institutional Aid Allowable Costs Background: In prior fiscal years, UW institutions were awarded federal funding from the Higher Education Emergency Relief Fund (HEERF), which was established and funded by federal legislation. For example, in May 2021, the U.S. Department of Education allocated $271.4 million in American Rescue Plan Act (ARPA) funds to UW institutions to be used for student aid (Assistance Listing number 84.425E) and institutional aid (Assistance Listing number 84.425F). UW-La Crosse received an allocation that totaled $35.3 million, of which $19.4 million could be used for institutional aid. Criteria: Under 2 CFR s. 200.303, UW-La Crosse is responsible for establishing and maintaining effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the award terms and conditions. Under ARPA, UW institutions are required to use a portion of the allocated HEERF funds to make direct aid payments to students and may use a portion of the allocated funds to defray institutional expenses associated with the coronavirus, including lost revenue. Section 314 of the Coronavirus Response and Relief Supplemental Appropriations Act, guidance from the Department of Education, the agreements each UW institution signed with the U.S. Department of Education, and the federal Office of Management and Budget?s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) prohibit UW institutions from using the funds to cover certain costs, including those for student recruitment. Condition: UW-La Crosse used a total of $127,448 of its HEERF institutional aid allocation for consulting, advertising, and recruitment costs to increase student enrollment. Context: During FY 2021-22, UW-La Crosse used $2.9 million of its total HEERF institutional aid allocation. We reviewed 151 transactions for which UW-La Crosse used HEERF institutional aid, including the largest 10 transactions made using funds appropriated by ARPA. We reviewed whether each transaction met the requirements of federal legislation, guidance from the U.S. Department of Education, the agreements UW-La Crosse signed with the U.S. Department of Education, and Uniform Guidance. To complete our testing, we requested information or supporting documentation for each transaction and interviewed UW-La Crosse staff. Questioned Costs: $127,448 Effect: Because unallowable costs were charged to HEERF, UW-La Crosse was not in compliance with federal requirements for the use of its HEERF institutional aid allocation. UW-La Crosse received federal reimbursement of $127,448 for unallowable costs during FY 2021 22. Cause: UW La Crosse interpreted the federal guidance to permit the costs for which it used its HEERF institutional aid allocation because the intention of the services was to increase enrollment that had declined during the public health emergency. After we questioned the use of HEERF funds, UW-La Crosse subsequently returned the funding. Recommendation: We recommend the University of Wisconsin La Crosse ensure that all expenses charged to the Higher Education Emergency Relief Fund (HEERF) program are allowable, such as performing an additional review of those costs allocated to HEERF and document the performance of such a review. Finding 2022-701: Higher Education Emergency Relief Fund?UW-La Crosse Institutional Aid Allowable Costs COVID-19?Higher Education Emergency Relief Fund (Assistance Listing number 84.425F) Award Number Award Year P425F200067 2021 Questioned Costs: $127,448 Type of Finding: Noncompliance Response from the University of Wisconsin La Crosse: The University of Wisconsin-La Crosse agrees with the audit finding and recommendation.
CAP for Finding: 2022-701 Finding 2022-701: Higher Education Emergency Relief Fund?UW-La Crosse Institutional Aid Allowable Costs Planned Corrective Action: All identified unallowable costs were removed from the federal grant award in December 2022. UW-La Crosse will implement the recommendation of the Legislative Audit Bureau to add a sign-off requirement by the HEERF Fund Manager to the monthly HEERF expense review process to indicate costs have been reviewed for proper placement. Anticipated Completion Date: March 12, 2023 Person responsible for corrective action: Spencer Wyman-Green Assistant Controller Business Services UW-La Crosse sgreen@uwlax.edu
UW-Platteville used $23,500 of its HEERF institutional aid allocation to create online tours of its campuses for recruiting purposes and $1,018 for student entertainment for a summer 2021 program. Context: During FY 2021-22, UW-Platteville used $6.4 million of its total HEERF institutional aid allocation. We reviewed 13 transactions for which UW Platteville used HEERF institutional aid, including the largest 10 transactions made using funds appropriated by ARPA. We reviewed whether each transaction met the requirements of federal legislation, guidance from the U.S. Department of Education, the agreements UW Platteville signed with the U.S. Department of Education, and Uniform Guidance. To complete our testing, we requested supporting documentation for certain transactions and interviewed UW Platteville staff. Questioned Costs: $24,518 Effect: Because unallowable costs were charged to HEERF, UW Platteville was not in compliance with federal requirements for the use of its HEERF institutional aid allocation. UW-Platteville received federal reimbursement of $24,518 for unallowable costs during FY 2021 22. Cause: UW-Platteville indicated it used HEERF institutional aid funding for online tours in order to provide prospective students an alternative way to learn about the campus. UW-Platteville indicated it interpreted the federal guidance to permit such use of HEERF institutional aid. However, we found the tour content was predominately marketing because it included encouragement for viewers to enroll at UW-Platteville. We consider any activities that encourage enrollment to be recruiting activity prohibited under federal regulations. After we questioned the use of HEERF funds for the presemester entertainment event, UW-Platteville subsequently returned the funding for this expense. Recommendation: We recommend the University of Wisconsin Platteville: -work with the federal government to resolve the $23,500 in unallowable costs that we identified; and -ensure that all expenses charged to the Higher Education Emergency Relief Fund (HEERF) program are allowable, such as performing an additional review of those costs allocated to HEERF and document the performance of such a review. Finding 2022-702: Higher Education Emergency Relief Fund?UW Platteville Institutional Aid Allowable Costs COVID-19?Higher Education Emergency Relief Fund (Assistance Listing number 84.425F) Award Number Award Year P425F200891 2021 Questioned Costs: $24,518 Type of Finding: Noncompliance Response from the University of Wisconsin Platteville: The University of Wisconsin-Platteville agrees with the audit finding and recommendations.
Show full finding ▾Hide full finding ▴Finding 2022-702: Higher Education Emergency Relief Fund?UW Platteville Institutional Aid Allowable Costs Background: In prior fiscal years, UW institutions were awarded federal funding from HEERF, which was established and funded by federal legislation. For example, in May 2021, the U.S. Department of Education allocated $271.4 million in ARPA funds to UW institutions to be used for student aid and institutional aid. UW-Platteville received an allocation that totaled $26.4 million, of which $14.5 million could be used for institutional aid. Criteria: Under 2 CFR s. 200.303, UW Platteville is responsible for establishing and maintaining effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the award terms and conditions. Under ARPA, UW institutions are required to use a portion of the allocated HEERF funds to make direct aid payments to students and may use a portion of the allocated funds to defray institutional expenses associated with coronavirus, including lost revenue. Section 314 of the Coronavirus Response and Relief Supplemental Appropriations Act, guidance from the Department of Education, the agreements each UW institution signed with the U.S. Department of Education, and Uniform Guidance prohibit UW institutions from using the funds to cover certain costs, including those for student recruitment and entertainment. Condition: UW-Platteville used $23,500 of its HEERF institutional aid allocation to create online tours of its campuses for recruiting purposes and $1,018 for student entertainment for a summer 2021 program. Context: During FY 2021-22, UW-Platteville used $6.4 million of its total HEERF institutional aid allocation. We reviewed 13 transactions for which UW Platteville used HEERF institutional aid, including the largest 10 transactions made using funds appropriated by ARPA. We reviewed whether each transaction met the requirements of federal legislation, guidance from the U.S. Department of Education, the agreements UW Platteville signed with the U.S. Department of Education, and Uniform Guidance. To complete our testing, we requested supporting documentation for certain transactions and interviewed UW Platteville staff. Questioned Costs: $24,518 Effect: Because unallowable costs were charged to HEERF, UW Platteville was not in compliance with federal requirements for the use of its HEERF institutional aid allocation. UW-Platteville received federal reimbursement of $24,518 for unallowable costs during FY 2021 22. Cause: UW-Platteville indicated it used HEERF institutional aid funding for online tours in order to provide prospective students an alternative way to learn about the campus. UW-Platteville indicated it interpreted the federal guidance to permit such use of HEERF institutional aid. However, we found the tour content was predominately marketing because it included encouragement for viewers to enroll at UW-Platteville. We consider any activities that encourage enrollment to be recruiting activity prohibited under federal regulations. After we questioned the use of HEERF funds for the presemester entertainment event, UW-Platteville subsequently returned the funding for this expense. Recommendation: We recommend the University of Wisconsin Platteville: -work with the federal government to resolve the $23,500 in unallowable costs that we identified; and -ensure that all expenses charged to the Higher Education Emergency Relief Fund (HEERF) program are allowable, such as performing an additional review of those costs allocated to HEERF and document the performance of such a review. Finding 2022-702: Higher Education Emergency Relief Fund?UW Platteville Institutional Aid Allowable Costs COVID-19?Higher Education Emergency Relief Fund (Assistance Listing number 84.425F) Award Number Award Year P425F200891 2021 Questioned Costs: $24,518 Type of Finding: Noncompliance Response from the University of Wisconsin Platteville: The University of Wisconsin-Platteville agrees with the audit finding and recommendations.
CAP for Finding: 2022-702 DATE: March 15, 2023 TO: Sherry Haakenson Financial Audit Director 780 Regent St Madison, WI 53708 FROM: AJ Cogan, Controller UW ? Platteville 2208 Ullsvik Platteville, WI 53818 Corrective Action Plan Finding 2022-702: Higher Education Emergency Relief Fund?UW Platteville Institutional Aid Allowable Costs Planned Corrective Action: UW-Platteville management agrees with the finding regarding the $1,018 and in March 2023 a journal entry by the controller was made to reverse the expense and the funds have been refunded back. Though UW-Platteville continues to believe the $23,500 video costs are allowable, to quickly resolve the issue, UW-Platteville will remove the LAB-identified costs from the federal funding and replace them with other allowable costs. Anticipated Completion Date: 3/31/23 Person responsible for corrective action: Lynsey Schwabrow, Chief Business Officer Administrative Services schwabrowl@uwplatt.edu
During FY 2021-22, UW-Superior used $30,376 of its HEERF institutional aid allocation to offset lost revenue from the sale of alcohol at sporting and other events and $1,500 for student entertainment for a presemester summer event. Context: During FY 2021-22, UW-Superior used $2.4 million of its total HEERF institutional aid allocation. We reviewed 26 transactions for which UW Superior used HEERF institutional aid, including the largest 10 transactions made using funds appropriated by ARPA. We reviewed whether each transaction met the requirements of federal legislation, guidance from the U.S. Department of Education, the agreements UW Superior signed with the U.S. Department of Education, and Uniform Guidance. To complete our testing, we requested information or supporting documentation for each transaction and interviewed UW Superior staff. Questioned Costs: $31,876 Effect: Because unallowable costs were charged to HEERF, UW Superior was not in compliance with federal requirements for the use of its HEERF institutional aid allocation. UW-Superior received federal reimbursement of $31,876 for unallowable costs during FY 2021 22. Cause: UW-Superior indicated it was aware that alcohol sales should be excluded from lost revenue calculations and agreed that it had incorrectly included a cost center for alcohol sales in its FY 2021-22 lost revenue calculation. When this issue was identified during the audit, UW Superior subsequently adjusted the accounting records in November 2022 to make $30,376 available to fund additional lost revenues under the HEERF program. In December 2022, UW-Superior also adjusted the accounting records to make the $1,500 in costs for the student entertainment available to fund additional HEERF program expenses. Recommendation: We recommend the University of Wisconsin Superior ensure that all expenses charged to the Higher Education Emergency Relief Fund (HEERF) program are allowable, such as performing an additional review of those costs allocated to HEERF and document the performance of such a review. Finding 2022-703: Higher Education Emergency Relief Fund?UW Superior Institutional Aid Allowable Costs COVID-19?Higher Education Emergency Relief Fund (Assistance Listing number 84.425F) Award Number Award Year P425F202112 2021 Questioned Costs: $31,876 Type of Finding: Noncompliance Response from the University of Wisconsin Superior: The University of Wisconsin-Superior agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-703: Higher Education Emergency Relief Fund?UW Superior Institutional Aid Allowable Costs Background: In prior fiscal years, UW institutions were awarded federal funding from HEERF, which was established and funded by federal legislation. For example, in May 2021, the U.S. Department of Education allocated $271.4 million in ARPA funds to UW institutions to be used for student aid and institutional aid. UW-Superior received an allocation that totaled $8.8 million, of which $4.9 million could be used for institutional aid. Criteria: Under 2 CFR s. 200.303, UW Superior is responsible for establishing and maintaining effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the award terms and conditions. Under ARPA, UW institutions are required to use a portion of the allocated HEERF funds to make direct aid payments to students and may use a portion of the allocated funds to defray institutional expenses associated with the coronavirus, including lost revenue. Section 314 of the Coronavirus Response and Relief Supplemental Appropriations Act, guidance from the Department of Education, the agreements each UW institution signed with the U.S. Department of Education, and Uniform Guidance prohibit UW institutions from using the funds to cover certain costs, including those for alcohol and entertainment. Condition: During FY 2021-22, UW-Superior used $30,376 of its HEERF institutional aid allocation to offset lost revenue from the sale of alcohol at sporting and other events and $1,500 for student entertainment for a presemester summer event. Context: During FY 2021-22, UW-Superior used $2.4 million of its total HEERF institutional aid allocation. We reviewed 26 transactions for which UW Superior used HEERF institutional aid, including the largest 10 transactions made using funds appropriated by ARPA. We reviewed whether each transaction met the requirements of federal legislation, guidance from the U.S. Department of Education, the agreements UW Superior signed with the U.S. Department of Education, and Uniform Guidance. To complete our testing, we requested information or supporting documentation for each transaction and interviewed UW Superior staff. Questioned Costs: $31,876 Effect: Because unallowable costs were charged to HEERF, UW Superior was not in compliance with federal requirements for the use of its HEERF institutional aid allocation. UW-Superior received federal reimbursement of $31,876 for unallowable costs during FY 2021 22. Cause: UW-Superior indicated it was aware that alcohol sales should be excluded from lost revenue calculations and agreed that it had incorrectly included a cost center for alcohol sales in its FY 2021-22 lost revenue calculation. When this issue was identified during the audit, UW Superior subsequently adjusted the accounting records in November 2022 to make $30,376 available to fund additional lost revenues under the HEERF program. In December 2022, UW-Superior also adjusted the accounting records to make the $1,500 in costs for the student entertainment available to fund additional HEERF program expenses. Recommendation: We recommend the University of Wisconsin Superior ensure that all expenses charged to the Higher Education Emergency Relief Fund (HEERF) program are allowable, such as performing an additional review of those costs allocated to HEERF and document the performance of such a review. Finding 2022-703: Higher Education Emergency Relief Fund?UW Superior Institutional Aid Allowable Costs COVID-19?Higher Education Emergency Relief Fund (Assistance Listing number 84.425F) Award Number Award Year P425F202112 2021 Questioned Costs: $31,876 Type of Finding: Noncompliance Response from the University of Wisconsin Superior: The University of Wisconsin-Superior agrees with the audit finding and recommendation.
CAP for Finding: 2022-703 Finding 2022-703: Higher Education Emergency Relief Fund?UW-Superior Institutional Aid Allowable Costs Planned Corrective Action: UW-Superior will review all HEERF Institutional and Strengthening Institutions Program expenses and ensure there is adequate documentation and that all expenses are allowable. The review will be documented and maintained in Business Services. Anticipated Completion Date: 7/31/23 Person responsible for corrective action: Name, Title: Shaun Marshall, Director of Business and Financial Services/Controller Division or Unit (If applicable): Business and Financial Services Email address: smarsha2@uwsuper.edu
We found that UW-Madison charged two unallowable costs to two federal awards during FY 2021 22. First, we found that UW Madison charged $54 for facilities and maintenance expenses relating to a location not used for purposes related to the federal award. Second, we found that UW Madison charged $596 in software license fees to a federal award. However, it is UW Madison?s practice to charge such fees to a nonfederal project. Context: During FY 2021-22, UW-Madison expended $86.9 million in certain nonpayroll expenses using federal Research and Development Cluster funding. There were 84,230 transactions comprising this amount with an average dollar amount of $1,032. We reviewed 40 such transactions to determine if the expenses were allowable under federal regulations. To complete our testing, we requested supporting documentation and information from UW-Madison for the transactions we reviewed. Questioned Costs: We questioned $650 in known questioned costs and an undetermined amount for other expenses we did not review. Because our testing was based upon a sample of payments it is likely there are additional cases where the payment is inappropriately charged to a federal award. We estimate these additional questioned costs are likely over $25,000, which is required to be reported under 2 CFR s. 200.516. Effect: UW-Madison used $650 in federal funds from the Research and Development Cluster for unallowable costs during FY 2021-22. Because unallowable costs were charged to the Research and Development Cluster, UW-Madison was not in compliance with federal requirements for the use of federal funding. Cause: UW-Madison staff indicated that the charges were applied to incorrect accounting codes when the expenses were originally recorded. For example, the $54 for facilities and maintenance expenses was charged to a federal award in the accounting system due to a limitation of certain billing codes for applying such expenses to the correct location of the work. These errors were not identified or corrected during the review of the payment or of other UW Madison monitoring activities. In December 2022 and January 2023, UW Madison corrected these accounting codes for these transactions and transferred the expenses to nonfederal projects. Recommendation: We recommend the University of Wisconsin Madison provide guidance and training to staff to ensure all costs are properly charged to federal award accounting codes and only costs allowable under federal regulations are charged to federal funds. Finding 2022-704: Research and Development Cluster?Unallowable Costs Research and Development Cluster (various Assistance Listing numbers) Award Numbers Award Years Various Various Questioned Costs: $650 Type of Finding: Noncompliance Response from the University of Wisconsin Madison: The University of Wisconsin-Madison agrees with the audit finding and recommendation.
Show full finding ▾Hide full finding ▴Finding 2022-704: Research and Development Cluster?Unallowable Costs Background: During FY 2021-22, UW institutions were awarded $741.6 million in federal funding as part of the Research and Development Cluster, for which UW Madison expended the majority of the funding. UW Madison purchases a variety of supplies and other goods or services to conduct its research activities. Criteria: Under 2 CFR s. 200.303, UW Madison is responsible for establishing and maintaining effective internal control over federal awards that provides reasonable assurance that it is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Further, 2 CFR s. 200.405 (a) specifies that for a cost to be allocable to a federal award the cost must be incurred specifically for the federal award; benefit both the federal award and other work; be distributed in proportions; be necessary to overall institutional operations; and be assignable, in part, to the federal award. Condition: We found that UW-Madison charged two unallowable costs to two federal awards during FY 2021 22. First, we found that UW Madison charged $54 for facilities and maintenance expenses relating to a location not used for purposes related to the federal award. Second, we found that UW Madison charged $596 in software license fees to a federal award. However, it is UW Madison?s practice to charge such fees to a nonfederal project. Context: During FY 2021-22, UW-Madison expended $86.9 million in certain nonpayroll expenses using federal Research and Development Cluster funding. There were 84,230 transactions comprising this amount with an average dollar amount of $1,032. We reviewed 40 such transactions to determine if the expenses were allowable under federal regulations. To complete our testing, we requested supporting documentation and information from UW-Madison for the transactions we reviewed. Questioned Costs: We questioned $650 in known questioned costs and an undetermined amount for other expenses we did not review. Because our testing was based upon a sample of payments it is likely there are additional cases where the payment is inappropriately charged to a federal award. We estimate these additional questioned costs are likely over $25,000, which is required to be reported under 2 CFR s. 200.516. Effect: UW-Madison used $650 in federal funds from the Research and Development Cluster for unallowable costs during FY 2021-22. Because unallowable costs were charged to the Research and Development Cluster, UW-Madison was not in compliance with federal requirements for the use of federal funding. Cause: UW-Madison staff indicated that the charges were applied to incorrect accounting codes when the expenses were originally recorded. For example, the $54 for facilities and maintenance expenses was charged to a federal award in the accounting system due to a limitation of certain billing codes for applying such expenses to the correct location of the work. These errors were not identified or corrected during the review of the payment or of other UW Madison monitoring activities. In December 2022 and January 2023, UW Madison corrected these accounting codes for these transactions and transferred the expenses to nonfederal projects. Recommendation: We recommend the University of Wisconsin Madison provide guidance and training to staff to ensure all costs are properly charged to federal award accounting codes and only costs allowable under federal regulations are charged to federal funds. Finding 2022-704: Research and Development Cluster?Unallowable Costs Research and Development Cluster (various Assistance Listing numbers) Award Numbers Award Years Various Various Questioned Costs: $650 Type of Finding: Noncompliance Response from the University of Wisconsin Madison: The University of Wisconsin-Madison agrees with the audit finding and recommendation.
CAP for Finding: 2022-704 Finding 2022-704: Research and Development Cluster?Unallowable Costs Planned Corrective Action: We agree with the condition that expenditures noted by the auditors were posted to federal awards in error. Our institution has robust policies and procedures in place along with multiple levels of review for transactions that post to awards. However, there may be rare instances where a transaction posts to an award for which it is not allowable or allocable. As noted by the auditors, they sampled from a population of $86.9 million from certain expenditure codes and only questioned $650 in costs. These expenditures have now been transferred off the awards to non-sponsored funding. To help Research Administrators manage Research and Development Awards, RSP (Research and Sponsored Programs) offers a variety of tools. RSP maintains a website that houses policies and procedures related to all relevant Research Administration topics. In addition to this, the RSP website has FAQ (Frequently Asked Questions) pages on a variety of Research Administration topics. RSP also offers a comprehensive training program called RED (Research Education Development). We offer courses that include topics such as a basic introduction to research administration, closeout of awards, cost-share, cost-transfers, and many others. We will remind administrators and their staff of all the relevant information our website houses and that they should take any pertinent RED. Lastly, we will remind staff that they can retake courses if they haven?t taken them recently and want to refresh their knowledge. Anticipated Completion Date: 5/31/23 Person responsible for corrective action: Kyle Everard, Manager of NSF-DOE Team Research and Sponsored Programs Kyle.Everard@rsp.wisc.edu
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