Cedar Valley ServicesNon-Profit

Allowable Costs Federal Agency: U.S. Department of Transportation Federal Program: Formula Grants for Rural Areas Assistance Listing Number: 20.509 Award Period: 1/1/2025 – 12/31/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per Uniform Guidance 200.214 Allowable Costs, the Organization is subject to allowable cost principles, which restrict expenditures within certain guidelines within federal assistance programs or activities. Condition: We noted a pay rate was entered incorrectly in the payroll system resulting in overpayment of payroll. Questioned Costs: $104 Context: For a sample of 40 payroll disbursements tested, we noted a pay rate was entered incorrectly for two employees. Cause: There was a keying error when pay rates were entered into the payroll system Effect: An employee was overpaid for six months until the next pay rate increase went into effect. Repeat Finding: No Recommendation: We recommend the Organization revise its procedures to include approval over payroll change report at least on a semi-annual basis. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding.

Procurement Federal Agency: U.S. Department of Transportation Federal Program: Formula Grants for Rural Areas Assistance Listing Number: 20.509 Award Period: 1/1/2025 – 12/31/2025 Type of Finding: Significant Deficiency in Compliance, Other Matters Criteria or Specific Requirement: Per Uniform Guidance 200.318 Procurement Standards, the Organization is subject to standards of conduct covering conflicts of interest in the selection, award, and administration of contracts. Condition: The Organization’s conflict of interest policy does not state specific guidelines for entering into contracts, nor does it state the disciplinary actions to be applied for violations by its employees, officers, agents, or board members. Questioned Costs: None Context: Conflict of interest policy does not align with requirements of federal procurement standards. Cause: Conflict of interest policy has not been reviewed in recent years. Effect: May cause federal expenditures to be out of compliance with federal regulations. Repeat Finding: No Recommendation: We recommend the Organization revise its conflict of interest policy to align with federal procurement standards. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding.

Federal Agency: U.S. Department of Transportation Federal Program: Formula Grants for Rural Areas Assistance Listing Number: 20.509 Award Period: 1/1/2024 – 12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per Uniform Guidance 200.214 Suspension and Debarment, the Organization is subject to suspension and debarment regulations, which restrict awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition: We noted there was no documentation to support the suspension and debarment verification was performed prior to the Organization entering into a contract agreement for one contractor. Questioned Costs: None Context: For a sample of five contractors tested, we noted there was no documentation supporting date of review to ensure the contractor was not suspended or debarred. Cause: There was no documentation of timeline for when contractor was reviewed for suspension and debarment. Effect: Without the proper procedure in place, the Organization may enter into an agreement with a contractor that has been suspended or debarred resulting in unallowable costs being incurred. Repeat Finding: No Recommendation: We recommend the Organization revise its suspension and debarment policy to include process for retaining timestamp of search performed. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding.

Federal Agency: U.S. Department of Transportation Federal Program: Formula Grants for Rural Areas Assistance Listing Number: 20.509 Award Period: 1/1/2023 – 12/31/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Uniform Guidance has specific requirements for allowable costs and cost principles that can be charged to grants. Condition: The Organization did not follow their internal control process for one cash disbursement tested as there was no documentation of approval. Questioned Costs: None Context: We selected 40 cash disbursements with zero deviations expected; however, one of the disbursements tested did not have approval over the transaction. Cause: There was no documentation of approval for one transaction tested. Effect: Unapproved cash disbursements could result in fraudulent transactions or disallowed costs being charged to the grant. Repeat Finding: No Recommendation: We recommend the Organization follow its policy for approval for every cash disbursement transaction. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding.

Federal Agency: U.S. Department of Transportation Federal Program: Formula Grants for Rural Areas Assistance Listing Number: 20.509 Award Period: 1/1/2023 – 12/31/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per Uniform Guidance 200.214 Suspension and Debarment, the Organization is subject to suspension and debarment regulations, which restrict awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition: We noted there was no documentation to support the suspension and debarment verification was performed prior to the Organization entering into a contract agreement for one contractor. Questioned Costs: None Context: For a sample of five contractors tested, we noted there was no documentation supporting date of review to ensure the contractor was not suspended or debarred. Cause: There was no documentation of timeline for when contractor was reviewed for suspension and debarment. Effect: Without the proper procedure in place, the Organization may enter into an agreement with a contractor that has been suspended or debarred resulting in unallowable costs being incurred. Repeat Finding: No Recommendation: We recommend the Organization revise its suspension and debarment policy to include process for retaining timestamp of search performed. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding.

2022 ? 003: Allowable Costs/Cost Principles Federal agency: U.S. Department of Transportation Federal program: Formula Grants for Rural Areas Assistance Listing Number: 20.509C Award Period: 1/1/2022 ? 12/31/2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Guidance allows nonprofit organizations to use an indirect cost rate allocation that is approved by the grantor. The costs being allocated must not include unallowable costs. Condition: The Organization?s indirect cost calculation does not match the cost allocation approved by the state. This has resulted in less indirect costs being allocated to the grant compared to what is allowed based on the approved allocation plan. In addition, advertising and depreciation costs are included in the amount allocated to the grant which are not allowable costs. Questioned costs: None Context: We selected three months of allocation calculations, noting none of them to match the Organization?s cost allocation policy approved by the grantor. Cause: The Organization has not taken steps to correct the calculation being used to allocate indirect costs. Effect: Using the current cost allocation method versus the approved plan has resulted in less costs being allocated to the grant than what is allowed under the plan. This has resulted in the Organization needing to pay back unused funds that could have otherwise been allocated to the grant. Repeat Finding: No Recommendation: We recommend the Organization review its policy and determine if there needs to be an amendment to its policy, or the calculations need to be updated to reflect the approved policy. Views of responsible officials and planned corrective actions: There is no disagreement with the finding.

2021 ? 003: Reporting Federal agency: U.S. Department of Health and Human Services Federal program: Provider Relief Fund Assistance Listing Number: 93.498 Award Period: 7/1/2020 ? 12/31/2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance ?200.303 Internal Controls, the Organization must establish and maintain effective internal control over Federal awards. Condition: We noted there was no review or approval of required reporting prior to submission. Questioned costs: None Context: We selected the one report submitted throughout the year and noted there was no documented review of the report prior to submission. Cause: The Organization did not have controls in place to ensure report was reviewed prior to submittal. Effect: Without the proper review controls, there is a heightened risk that the Organization?s report may not be accurate and could lead to funds having to be returned. Repeat Finding: No Recommendation: We recommend the Organization implement controls to ensure timely and documented review of reports prior to submission. Views of responsible officials and planned corrective actions: There is no disagreement with the finding.

2020 ? 003: Allowable Costs/Cost Principles Federal agency: U.S. Department of Transportation Federal program: Formula Grants for Rural Areas CFDA Number: 20.509 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): MN-2019-018-00 Award Period: 1/1/2020 ? 12/31/2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance ?200.303 Internal Controls, the Organization must establish and maintain effective internal control over Federal awards. Condition: During our testing of general disbursements, we identified one disbursement where there was no documentation of approval by the Executive Director. Questioned costs: None Context: We selected a sample of 40 disbursements made throughout the year with 1 out of 40 of the disbursements having no documentation of approval by the Executive Director. Cause: The Organization did not have controls in place to ensure all expenditures were approved by the Executive Director. Effect: Without the proper review controls, there is a heightened risk that the Organization may be incurring unallowable costs. Repeat Finding: No Recommendation: We recommend the Organization implement written policies and procedures to comply with Uniform Guidance. Views of responsible officials and planned corrective actions: There is no disagreement with the finding.

2020 ? 004: Cash Management Federal agency: U.S. Department of Transportation Federal program: Formula Grants for Rural Areas CFDA Number: 20.509 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): MN-2019-018-00 Award Period: 1/1/2020 ? 12/31/2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization is required to submit reports of expenses incurred and revenue received each month. These reports should be reviewed by someone other than the preparer before submission. Condition: We noted there was no documentation to support a review was performed of the monthly report prior to submission. Questioned costs: None Context: For four out of four monthly claim reports tested, we noted there was no formal documented review of the report. Cause: The Organization did not implement a process for reviewing monthly reports prior to submission. Effect: Without the proper review controls, there is a heightened risk that drawdowns could be made that are incorrectly calculated, or an erroneous amount not supported by expenditures made by the Organization. Repeat Finding: No Recommendation: We recommend a second person be involved in the report preparation process, who reviews the current report, documenting his/her approval on the report. Views of responsible officials and planned corrective actions: There is no disagreement with the finding.

2020 ? 005: Suspension and Debarment Federal agency: U.S. Department of Transportation Federal program: Formula Grants for Rural Areas CFDA Number: 20.509 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): MN-2019-018-00 Award Period: 1/1/2020 ? 12/31/2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance ?200.214 Suspension and Debarment, the Organization is subject to debarment and suspension regulations, which restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: We noted there was no documentation to support a search was performed on a vendor prior to entering into a contract for services to ensure the vendor was not suspended or debarred. Questioned costs: None Context: For two out of two vendor contracts tested, we noted there was no documentation supporting a review to ensure the vendor was not suspended or debarred. Cause: The Organization has not implemented formal policies and procedures to ensure proper procedures are being followed as it relates to suspension and debarment. Effect: Without the proper procedure in place, the Organization may enter into a contract with a vendor who has been suspended or debarred resulting in unallowable costs being incurred. Repeat Finding: No Recommendation: We recommend the Organization implement a formal procurement policy that includes procedures for suspension and debarment. Views of responsible officials and planned corrective actions: There is no disagreement with the finding.

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