MARYLAND TRANSPORTATION AUTHORITY

Reference Number: 2023-001 Federal Agency: United States Department of Transportation Federal Program Name: National Infrastructure Investments Assistance Listing Number: 20.933 Federal Award Identification Number and Year: Not Available Award Period: 12/1/2021 – 11/1/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 1. Timely submission of reports in accordance with specified deadlines. 2. Compliance with the requirement for reports to have a separate preparer and reviewer, as outlined in applicable regulations. Quarterly Project Progress Reports are due on or before the 20th day of the first month of each calendar year quarter. Condition: Required reports applicable to Assistance Listing Number 20.933 were not submitted within the required timeframes and did not adhere to the requirement for separate preparer and reviewer. Questioned Costs: None Context: The Authority did not submit required reports timely and did not have proper procedures in place regarding report preparation and review. Cause: Inadequate segregation of duties, lack of oversight, or insufficient internal controls to ensure compliance with reporting requirements. Effect: The absence of a separate preparer and reviewer may increase the risk of errors or inconsistencies in the reports. Delayed submission further exacerbates compliance concerns, potentially resulting in penalties or sanctions. Recommendation: Strengthen internal controls to ensure timely submission of reports and establish a clear separation of duties between preparers and reviewers. Provide training to staff members on the importance of segregation of duties and adherence to reporting deadlines. Views of Responsible Officials: The Authority agrees with the finding.

Reference Number: 2021-001 Prior Year Finding: N/A Federal Agency: U.S. Department of Justice State Agency: Maryland Transportation Authority (MDTA) Federal Program: Equitable Sharing Program Assistance Listing Number: 16.922 Award Number and Year: Not Available Compliance Requirement: Equipment Type of Finding: Significant Deficiency in Internal Control over Compliance, Noncompliance Criteria or specific requirement: Compliance: Per the Equitable Sharing Guide (the Guide), ?Although 2 CFR sections 200.311 and 313 are not applicable, the Guide Section VI, details the requirements for tangible property. Property purchased with equitable sharing funds, or obtained for official use, is subject to inventory control, log maintenance, and disposal requirements.? Additionally, the Guide states that all participating state and local law enforcement agencies ?Maintain and follow written policies for accounting, bookkeeping, inventory control, and procurement that comply with the applicable provisions of the OMB Uniform Administrative Requirements, Costs, Principles, and Audit Requirements for Federal Awards or any subsequent updates and jurisdiction policies. Ensure distribution of relevant policies to all appropriate personnel?.? Dispose of items purchased with shared funds in accordance with the agency?s disposal policies. To the extent practicable and if consistent with the agency?s procurement and disposal polices, deposit proceeds from the sale of such property into the agency?s sharing account or accounting code. If an item has minimal or no value, an agency may donate the item to a recipient of its choice if permitted under the agency?s disposal policies.? Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: MDTA management was unable to provide an equipment rollforward that identified previously purchased equipment using Equitable Sharing Program (ESP) funds, nor any related disposals, since the inception of the program. As a result, we were unable to obtain a complete and accurate listing of equipment purchased with ESP funds and therefore, could not perform the required inventory observations. Cause: Management does not have a process in place to separately track equipment purchased or disposed of that were purchased with federal funds or to ensure compliance with the requirements for tangible property as outlined in the Guide Section VI. Effect: MDTA is not incompliance with the requirements for tangible property as outlined in the Guide, Section VI. Questioned costs: Undetermined Recommendation: We recommend MDTA management develop and implement a process to separately track equipment purchased or disposed of that were purchased with federal funds and to ensure compliance with the requirements for tangible property as outlined in the Guide Section VI. Additionally, we recommend MDTA management review prior year records and other necessary supporting documentation in order to create a complete and accurate listing of equipment purchased and disposed of using ESP funds. Views of responsible officials: Management concurs with this finding.