Special Olympics Arizona, Inc.

Item: 2024-001 Assistance Listing Number: 21.027 Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024 Compliance Requirement: Procurement, suspension and debarment Criteria: In accordance with 2 CFR § 200.318 - General procurement standards - the entity must use its own documented procurement procedures which reflect applicable. State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in 2 CFR § 200.318. Condition: The Organization’s procurement policy and related procedures do address the provisions of 2 CFR § 200.318; however, the Organization has not retained documentation to support that the policy is being adhered to. Questioned Costs: n/a Context: In a population of over 250 procurements for program costs, we conducted a non-statistical sample of 60 transactions. In our sample of 60 transactions, it was noted that 57 procurements were below the micro-purchase threshold, and 3 procurements were above the micro-purchase threshold but below the small purchase threshold, which was 100% of the population in this threshold. We noted there was a lack of documentation retained by the Organization to support two of these three procurement transactions above the micro-purchase threshold but below the small purchase threshold. As such, this is deemed to be a material weakness in internal control over compliance. Effect: Undocumented procurement decisions could violate the requirements of 2 CFR § 200.318 Cause: Special Olympics Arizona, Inc. did not implement controls to ensure documentation was retained to support adherence to its own procurement policy. Identification as a Repeat Finding: Partial repeat finding of 2023-04 Recommendation: The entity should implement controls to ensure that documentation is retained to support adherence to its own procurement policy. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

Item: 2023-002 Assistance Listing Number: 21.027 Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of 232 payroll costs charged to the program, we conducted a non-statistical sample of 24 payroll costs charged to the program. In our sample of 24, we noted that all selections were charged to the program based on budget estimates. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred such that costs charged to the program were supported. However, recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Repeat finding of 2022-02 Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

Item: 2023-003 Assistance Listing Number: 84.425U Programs: COVID-19 - American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Agency: U.S. Department of Education Pass-Through Agencies: Arizona Department of Education Pass-Through Grantor Identifying Number: Unknown Award Year: April 19, 2022 to September 30, 2024 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of 225 payroll costs charged to the program, we conducted a non-statistical sample of 23 payroll costs charged to the program. In our sample of 23, we noted that all selections were charged to the program based on estimated allocations determined in advance based on job descriptions and duties. We noted that actual time incurred was not used to charge expenditures to the program. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred such that costs charged to the program were supported. However, recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Repeat finding of 2022-03 Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

Item: 2023-004 Assistance Listing Number: 21.027 Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Compliance Requirement: Procurement, suspension and debarment Criteria: In accordance with 2 CFR § 200.318 - General procurement standards - the entity must use its own documented procurement procedures which reflect applicable. State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in 2 CFR § 200.318. Condition: The entity’s procurement policy and related procedures do not address the provisions of 2 CFR § 200.318 Questioned Costs: n/a Context: In a population of over 250 procurements for program costs, we conducted a non-statistical sample of 40 transactions. In our sample of 40 transactions, it was noted that 39 procurements were below the micro-purchase threshold, and 1 procurement was above the micro-purchase threshold but below the small purchase threshold. We noted there was a procurement policy in place however, it was not written in compliance with 2 CFR § 200.318. Additionally, there was a lack of documentation retained by the organization to support procurement transactions. As such, this is deemed to be a material weakness in internal control over compliance. Effect: Undocumented procurement decisions could violate the requirements of 2 CFR § 200.318 Cause: Special Olympics Arizona, Inc. did have a written procurement policy however, it did not conform to 2 CFR § 200.318. Additionally, Special Olympics Arizona, Inc. did not implement controls to ensure adherence to policies that conform to 2 CFR § 200.318. Identification as a Repeat Finding: Repeat finding of 2022-04 Recommendation: The entity should prepare written procurement policies and implement controls to ensure adherence to the policies that conform to 2 CFR § 200.318. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

Item: 2022-002 Assistance Listing Number: 21.027 Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of over 250 payroll costs charged to the program, we conducted a non-statistical sample of 40 payroll costs charged to the program. In our sample of 40, we noted that all selections were charged to the program based on budget estimates. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls is not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Not a repeat finding Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

Item: 2022-003 Assistance Listing Number: 84.425U Programs: COVID-19 - American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Agency: U.S. Department of Education Pass-Through Agencies: Arizona Department of Education Pass-Through Grantor Identifying Number: Unknown Award Year: April 19, 2022 to September 30, 2024 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of 182 payroll costs charged to the program, we conducted a non-statistical sample of 18 payroll costs charged to the program. In our sample of 18, we noted that all selections were charged to the program based on estimated allocations determined in advance based on job descriptions and duties. We noted that actual time incurred was not used to charge expenditures to the program. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls is not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Not a repeat finding Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

Item: 2022-004 Assistance Listing Number: 21.027 Programs: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Compliance Requirement: Procurement, suspension and debarment Criteria: In accordance with 2 CFR § 200.318 - General procurement standards - the entity must use its own documented procurement procedures which reflect applicable. State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in 2 CFR § 200.318. Condition: The entity does not have a documented procurement policy and procedures that address the provisions of 2 CFR § 200.318 Questioned Costs: n/a Context: In a population of 79 procurements for program costs, we conducted a non-statistical sample of 8 transactions. In our sample of 8 transactions, it was noted that all procurements were below the micro-purchase threshold, but there was no documented procurement policies or controls to ensure compliance with 2 CFR § 200.318. Effect: Undocumented procurement decisions could violate the requirements of 2 CFR § 200.318 Cause: Special Olympics Arizona, Inc. did not prepare written procurement policies, nor implement controls to ensure adherence to the policies, that conform to 2 CFR § 200.318. Identification as a Repeat Finding: Not a repeat finding Recommendation: The entity should prepare written procurement policies and implement controls to ensure adherence to the policies that conform to 2 CFR § 200.318. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.