City of Buckeye, ArizonaLocal Government

Finding Number: 2019-001 Repeat Finding: No Program Name/CFDA Title: Aging Cluster CFDA Numbers: 93.044, 93.045, 93.053 Federal Agency: U.S. Department of Health and Human Services Federal Award Number: N/A Pass-Through Agency: Area Agency on Aging, Region One, Inc. Questioned Costs: $10,890 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles CRITERIA Management is responsible for establishing and maintaining internal controls to ensure expenditures funded with Federal funds are allowable based on the grant agreement and the provisions of 2 CFR part 200, Subpart E, Cost Principles (Uniform Guidance). CONDITION The City charged costs to the Aging Cluster that were unallowable or not properly supported. CAUSE The City did not separately account for the Aging Cluster grant in the general ledger. Additionally, the City did not have a process to support costs charged to the grant for employees with multiple cost objectives. Finally, the costs charged to the grant were not closely reviewed for allowability. EFFECT Unallowable costs were charged to the Aging Cluster, which may require repayment of grant monies. CONTEXT ? The City comingled the Aging Cluster grant with the Arizona Lottery Fund (ALF) grant. ? The City charged a portion of the Recreation Manager?s salary and benefits to the grant in error. ? There are three employees with multiple cost objectives that are charged to the Aging Cluster. The funding split is approved in the detailed budget submitted to Area Agency; however, there is no documentation of how the split was determined and the City is not separately tracking hours for each cost objective.RECOMMENDATION The City should segregate the Aging Custer grant from the ALF grant in the general ledger to ensure monies are appropriately spent on allowable activities and the City can clearly demonstrate which costs were charged to each grant. Additionally, the City should develop policies and procedures to support costs charged to grants for employees with multiple cost objectives. Finally, costs charged to the grant should be monitored and periodically reviewed by management for propriety. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2019-002 Repeat Finding: No Program Name/CFDA Title: Aging Cluster CFDA Numbers: 93.044, 93.045, 93.053 Federal Agency: U.S. Department of Health and Human Services Federal Award Number: N/A Pass-Through Agency: Area Agency on Aging, Region One, Inc. Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Program Income CRITERIA The service provider will use all collected contributions to expand the service for which the contributions were given and to supplement (not supplant) funds received. (42 USC 3030c-2(b)). CONDITION The Aging Cluster program revenue was deposited into the General Fund. CAUSE The City was not aware that program income was recorded in the General Fund. EFFECT The City is not in compliance with federal regulations. CONTEXT The program revenue collected of $23,990 which includes voluntary contributions from seniors for congregate meals, home delivered meals, and transportation are improperly recorded in the General Fund rather than the Area Agency on Aging Grant Fund. Additionally, the program revenue recorded in the General Fund is not used for Aging Cluster activities. This is mitigated to a certain extent by a large General Fund subsidy of $505,300 in the form of a transfer to cover operational shortfalls related to Aging Cluster activities. The transfer covers both actual program revenue collected and the budgeted local match. RECOMMENDATION The City should ensure all voluntary contributions related to the Aging Cluster activities are recorded in the Area Agency on Aging Grant Fund. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

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