ATLANTA REGIONAL COMMISSIONLocal Government

2020-002 (Material Weakness) U.S. Department of Transportation Highway Planning and Construction Cluster ? CFDA No. 20.205 Passed through Georgia Department of Transportation Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research ? CFDA No. 20.505 Passed through Georgia Department of Transportation Enhanced Mobility of Seniors and Individuals with Disabilities - CFDA No. 20.513 Passed through Georgia Department of Human Resources U.S. Department of Health and Human Services Aging Cluster ? CFDA No. 93.044, 93.045, 93.053 Passed through Georgia Dept. of Human Services Medicaid Cluster ? CFDA No. 93.778 Passed through Georgia Dept. of Community Health Department of Homeland Security Homeland Security Grant Program ? CFDA No. 97.067 Passed through Georgia Emergency Management Agency Criteria: Appendix VII to Title 2 U.S. Code of Federal Regulations (CFR) Part 200 states, ?Fixed rate means an indirect cost rate which has the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual, allowable costs of the period covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period.? Condition: The Commission has a cumulative net indirect cost over-recovery of $2,915,847 at December 31, 2020. Cause: The indirect cost allocation rate used did not approximate the actual rate incurred considering the prior year over recovery. Effect: Indirect costs were charged to programs that significantly exceeded actual costs incurred during the fiscal year. This finding could potentially affect all federal programs administered by the Commission. Identification as a Repeat Finding: A similar finding was reported in the prior year?s audit as finding number 2019-003. Auditor's Recommendation: The Commission should review policies relating to the allocation of indirect costs to ensure adjustments for the prior year over/(under)-recovery are applied when calculating the indirect cost allocation rate. The consulting with the grantors to determine an appropriate period to correct the over-recovery. Views of Responsible Officials and Planned Corrective Actions: The Commission agrees with the recommendation. The Commission adjusted the cost allocation rates in 2020 and again in 2021 to incorporate a reduction of the over recovery. The Commission will continue to monitor the allocation plan and take actions to reduce the over recovery in a timely manner.

2020-003 (Significant Deficiency) U.S. Department of Transportation Highway Planning and Construction Cluster ? CFDA No. 20.205 Passed through Georgia Department of Transportation Criteria: Grant requirements state non-federal entities are restricted from contracting with or making sub-awards to parties that are suspended or debarred. Condition: The Commission is required to verify subcontractors of its vendors are not suspended, debarred or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The contract documentation for two vendors selected for testing did not include documentation that the vendor verified its subcontractors selected were not suspended or debarred. Cause: The Commission did not have adequate controls in place to ensure contracts were not being awarded to a suspended or debarred party. Effects: Based on our search of the federally operated System for Award Management (SAM) website, this oversight did not cause the Commission to contract with a suspended or debarred party. Identification as a Repeat Finding: A similar finding was reported in the prior year?s audit as finding number 2019-004. Auditor's Recommendation: The Commission should review federally funded contracts to ensure file documentation includes verification that the vendor selected verified subcontractors were not suspended or debarred. Views of Responsible Officials and Planned Corrective Actions: The Commission agrees with the recommendation. Documentation will be retained to support the search of the debarment and suspension listing.

2019-002 (Material Weakness) U.S. Department of Transportation Highway Planning and Construction Cluster ? CFDA No. 20.205 Passed through Georgia Department of Transportation Criteria: Direct recipients of Federal awards and their subrecipients must follow the procurement procedures standards of Title 2 U.S. Code of Federal Regulations (CFR) Part 200 sections 200.318 through 200.326, as applicable. Condition: The Commission is required to follow procurement procedures that conform to applicable Federal law and regulations and standards which include rationale for method of procurement, selection of contractor type, contractor selection or rejection, basis for contractor price, and limiting competition in cases where competition is limited. Cause: The Commission did not have adequate controls in place to ensure procurement rationale was documented. Effect: For two of the vendors tested, documentation supporting sole source rationale could not be located. Questioned Costs: CFDA No. 20.205: $75,126 Identification as a Repeat Finding: A similar finding was reported in the prior year?s audit as finding number 2018-003. Auditor's Recommendation: The Commission should follow procurement procedures that conform to applicable Federal law and regulations and standards. Views of Responsible Officials and Planned Corrective Actions: The Commission agrees with the recommendation. The Commission will review procurement procedures to ensure purchases conform to applicable Federal laws and regulations and standards.

2019-003 (Material Weakness) U.S. Department of Transportation Highway Planning and Construction Cluster ? CFDA No. 20.205 Passed through Georgia Department of Transportation U.S. Department of Health and Human Services Aging Cluster ? CFDA No. 93.044, 93.045, 93.053 Passed through Georgia Dept. of Human Services Medicaid Cluster ? CFDA No. 93.778 Passed through Georgia Dept. of Community Health Department of Homeland Security Homeland Security Grant Program ? CFDA No. 97.067 Passed through Georgia Emergency Management Agency Criteria: Appendix VII to Title 2 U.S. Code of Federal Regulations (CFR) Part 200 states, ?Fixed rate means an indirect cost rate which has the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual, allowable costs of the period covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period.? Condition: The Commission has a cumulative net indirect over-recovery of $3,566,553 at December 31, 2019, an increase of $537,008 from the previous year. Cause: The indirect cost allocation rate used did not approximate the actual rate incurred considering the prior year over recovery. Effect: Indirect costs were charged to programs that significantly exceeded actual costs incurred during the fiscal year. This finding could potentially affect all federal programs administered by the Commission. Auditor's Recommendation: The Commission should review policies relating to the allocation of indirect costs to ensure adjustments for the prior year over/(under)-recovery are applied when calculating the indirect cost allocation rate. The Commission should review policies to ensure allocation of costs align with actual costs to minimize over or under recoveries. The Commission should also consider consulting with the grantors to determine an appropriate period to correct the over-recovery. Views of Responsible Officials and Planned Corrective Actions: The Commission agrees with the recommendation. The Commission adjusted the cost allocation rates in 2019 and again in 2020 to incorporate a reduction of the over recovery. The Commission will continue to monitor the allocation plan and take actions to reduce the over recovery in a timely manner.

2019-004 (Significant Deficiency) U.S. Department of Transportation Highway Planning and Construction Cluster ? CFDA No. 20.205 Passed through Georgia Department of Transportation Criteria: Grant requirements state non-federal entities are restricted from contracting with or making sub-awards to parties that are suspended or debarred. Condition: The Commission is required to verify vendors are not suspended, debarred or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The contract documentation for five vendors selected for testing did not include documentation that the vendor selected was not suspended or debarred. Cause: The Commission did not have adequate controls in place to ensure contracts were not being awarded to a suspended or debarred party. Effects: Based on our search of the federally operated System for Award Management (SAM) website, this oversight did not cause the Commission to contract with a suspended or debarred party. Identification as a Repeat Finding: A similar finding was reported in the prior year?s audit as finding number 2018-005. Recommendation: The Commission should review federally funded contracts to ensure file documentation includes verification that the vendor selected was not suspended or debarred. Views of Responsible Officials and Planned Corrective Actions: The Commission agrees with the recommendation. Documentation will be retained to support the search of the debarment and suspension listing.

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