Eighth Judicial District CourtLocal Government

Section III – Federal Award Findings and Questioned Costs Finding 2024-001 – Internal Controls for Federally Funded Procurements which are Covered Transactions (Significant Deficiency) Impacted Federal Programs: Federal Agency: Department of Treasury Pass-through Entity: State of Nevada CASA Association Program: COVID-19 Corona State and Local Fiscal Recovery Fund (CSLFR) Assistance Listing No.: 21.027 Federal Award Number: SLFRF2634 Criteria: As a condition of receiving federal funds, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov | Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our walkthrough of the internal controls assessment of procurement for the CSLFR program, we had noted that there was no evidence of internal controls in place to check against applicable listings that vendors were not debarred, suspended, or otherwise excluded. Cause: Management did not include reviewing Sam.gov for a vendor’s status as part of the procurement process prior to entering into a covered transaction. Effect: The Court could unknowingly enter into covered transactions with an entity that is suspended or debarred leading to non-compliance. Questioned Costs: None Context: A total of 12 procurements totaling $501,000 in federal expenditures, met the definition of covered transactions and thus were subject to the suspension and debarment compliance requirements. These 12 procurements did not include a check prior to the agreements of each vendor’s status. Subsequent to entering into the transaction, management verified that all 12 vendors were found not to be suspended, debarred, or otherwise excluded when reviewing Sam.Gov. Recommendation: We recommend the Court update their procurement policies and procedures to include a requirement to review applicable listings in Sam.Gov for a vendor’s suspension and debarment status prior to entering into covered transactions. Management’s Response See Corrective Action Plan.

Finding 2023-001 – Internal Controls Over Payroll Charges of Employees Funded by Grants (Significant Deficiency) Impacted Federal Programs: Federal Agency: Department of Health and Human Services Pass-through Entity: State of Nevada Department of Welfare and Supportive Services Program: Child Support Enforcement Assistance Listing No.: 93.563 Federal Award Number: Interlocal Federal Agency: Department of Health and Human Services Pass-through Entity: State of Nevada Division of Public and Behavioral Health Program: COVID-19 – Block Grants for Community Mental Health Services Assistance Listing No.: 93.958 Federal Award Number: B09SM085370, B09SM083986, B09SM083988 Federal Agency: Department of Health and Human Services Pass-through Entity: State of Nevada Division of Public and Behavioral Health Program: COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing No.: 93.959 Federal Award Number: B08TI084628, B08TI083130-01, B09SM085370, B09SM083986, B09SM083988 Federal Agency: Department of Health and Human Services Pass-through Entity: Nevada System of Higher Education Program: Opioid STR Assistance Listing No.: 93.788 Federal Award Number: H79TI083310 Award Year: Fiscal year 2022-2023 Category of Finding: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. Title 2, Subtitle A, Chapter II, Part 200 Subpart E, paragraph 430 of the Code of Federal Regulations stipulates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; Be incorporated into the official records of the non-Federal entity; Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; Encompass both Federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non- Federal entity's written policy; Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award, a Federal award and non- Federal award, an indirect cost activity and a direct cost activity, two or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity; Comply with the established accounting policies and practices of the non-Federal entity. Condition: Our walkthrough of internal controls over payroll transactions charged against federal grants identified that while the Court reviews all expenditures submitted for reimbursement, they did not have individual time certifications completed by employees 100% funded solely through grants to ensure only program eligible activities were worked on during the year. Cause: Management did not have employees complete individual time certifications for those employees 100% funded solely through grants. Effect: Grants could be charged for service time and employee effort which were not performed for eligible program activities. Questioned Costs: None Context: These programs had roughly $5.5m in total federal expenditures of which $1.72m (31%) were related to payroll. Across the programs Crowe tested 80 payroll transactions and did not identify any instances of noncompliance. Recommendation: We recommend that Court employees 100% funded solely by grant programs periodically certify their time and effort assigned to the respective grant through which they are funded and their supervisor approve the certification.