State of NevadaState Government

U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Fresh Fruit and Vegetable Program, 10.582 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of nine out of a population of 61 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 9 $1,772,633 Not Reported 9 $1,772,633 Not Timely 9 $1,772,633 Obligation Incorrect 9 $1,772,633 Missing Key Elements 9 $1,772,633 Repeat Finding from Prior Year: Yes – prior year finding 2022-019. Recommendation: We recommend NDA implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

U.S. Department of Labor Unemployment Insurance, 17.225 COVID-19 Unemployment Insurance, 17.225 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award 23A55UI039335-01 included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. The Nevada Department of Employment, Training and Rehabilitation (DETR) must submit the ETA 9130 Financial Status Report, UI Programs. Condition: Amounts reported on the ETA 9130 did not agree to underlying financial records. Cause: DETR did not have adequate internal controls to ensure amounts reported agreed to underlying financial records. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of 12 out of a population of 70 ETA 9130 reports was selected for testing. An error was noted on one of the reports tested as follows: Quarter Ended March 31, 2023 (UI39335OB0) Amount Reported Amount per General Ledger Federal Share of Expenditures $11,551,039 $10,567,850 Repeat Finding from Prior Year: No Recommendation: We recommend DETR enhance the internal controls to ensure amounts reported agree to underlying records. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

U.S. Department of Labor Unemployment Insurance, 17.225 COVID-19 Unemployment Insurance, 17.225 Special Tests and Provisions – UI Benefit Payments Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards with benefit payments, which are UI EUC, UI Trust Fund, UI Extended Benefits, UI FPUC, UI PEUC, and UIPL 18-20, included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and indepth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook). Department of Labor ET Handbook 395, Part VI, Section 11 Completion of Cases and Timely Data Entry states that a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch, and 95% of cases must be completed within 90 days of the week ending batch; and a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year. Condition: The minimum standards of BAM case completion were not met. Cause: The Nevada Department of Employment, Training and Rehabilitation (DETR) did not have adequate internal controls to ensure BAM timeliness requirements were met. Effect: A BAM investigation may not detect an error timely. Questioned Costs: None Context/Sampling: The following is a summary of the BAM case completion percentages that were not met for calendar year 2022: 90-day completion requirements Paid claims require 95% completion, actual was 85.19%. Denied separation claims require 85% completion, actual was 84.21%. 120-day completion requirements Paid claims require 98% completion, actual was 93.46%. Denied separation claims require 98%, actual was 92.76%. Denied non-separation claims require 98%, actual was 93.63%. Repeat Finding from Prior Year: Yes – prior year finding 2022-021. Recommendation: We recommend DETR enhance internal controls to ensure BAM timeliness requirements are met. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

U.S. Department of Transportation Highway Planning and Construction, 20.205 COVID-19 Highway Planning and Construction, 20.205 Special Tests and Provisions – Value Engineering Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 20.205 on the Schedule of Expenditures of Federal Awards. Criteria: The Nevada Department of Transportation (NDOT) is required to establish a value engineering (VE) program and ensure that a VE analysis is performed on all applicable projects. The program should include procedures to approve or reject recommendations and for monitoring to ensure that resulting, approved recommendations are incorporated into the plans, specifications, and estimate. Applicable projects are (a) projects located on the National Highway System (NHS) with an estimated total project cost of $50 million or more that utilize federal high program funding; (b) bridge projects located on the NHS with an estimated total cost of $40 million or more that utilize federal highway program funding; and (c) any other projects that the FHWA determines to be appropriate. Critical elements of VE programs include identification of a state VE coordinator; establishment of a VE policy, and documented VE procedures, including requirements to identify applicable projects, verify required VE analyses are completed on State DOT and subrecipient projects; and monitor, assess, and report on the performance of the VE program as required by 23 CFR part 627. NDOT’s VE policy states that NDOT will conduct VE analysis for all NHS projects costing at least $25 million, to consider VE for projects exceeding $10 million, and to consider VE for all projects, processes, procedures, and standards submitted by district or division heads. Emphasis on value analysis for projects exceeding $10 million does not eliminate consideration of smaller projects that may benefit from value analysis. Condition: A VE analysis was not performed when required by NDOT policy. Cause: The Nevada Department of Transportation (NDOT) did not have adequate internal controls to ensure their VE policy was followed. Effect: A project did not benefit from a value analysis. Questioned Costs: None Context/Sampling: A nonstatistical sample of two projects from a population of seven was selected for testing. One project had an estimated cost of $41 million to $49 million and a VE analysis was performed. The other project had an estimated cost of $34 million to $41 million and a VE analysis was not performed in accordance with NDOT policy. Repeat Finding from Prior Year: No Recommendation: We recommend NDOT enhance internal controls to ensure the VE policy is followed or, if necessary, the VE policy is updated as needed and provided that it complies with federal requirements. Views of Responsible Officials: The Nevada Department of Transportation agrees with this finding.

U.S. Department of Treasury COVID-19 Emergency Rental Assistance Program, 21.023 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. The OMB Compliance Supplement provides that states are required to submit Quarterly Reports for Emergency Rental Assistance as amended by the Consolidated Appropriations Act of 2021 (ERA1) and Emergency Rental Assistance from the American Rescue Plan Act (ERA2). Condition: Key information was not reported, supporting documentation for amounts that were reported was not maintained, and there was no segregation of duties in the preparation and review of the reports. Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure reports were reviewed, support was maintained, and reports were complete and accurate prior to submission. Effect: Inaccurate and incomplete information was submitted to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of four Quarterly Reports out of a population of eight was selected for testing. The errors for submitted reports are noted as follows: ERA 1 report for the quarter ended September 30, 2022: • $18,096,873 was reported as amounts expended for administrative expenses and was not able to be traced to underlying supporting records. • Amounts expended and/or obligated for administrative expenses exceed 10% of the total allocation. • No amounts were reported for the total obligation and expenditures for housing stability services. As such the housing stability services ratio was not able to be determined. • No amounts were reported for number of households served at certain income levels. • There was no evidence of internal controls (segregation of duties). ERA 1 report for the quarter ended December 31, 2022: • No amounts were reported for administrative costs obligated and expended and award funds obligated or expended. As such the administrative costs ratio was not able to be determined. • No amounts were reported for the total obligation and expenditures for housing stability services. As such the housing stability services ratio was not able to be determined. • Number of households served at certain income levels was not able to be traced to underlying supporting records. • There was no evidence of internal controls (segregation of duties). ERA 2 report for the quarter ended September 30, 2022: • No amounts were reported for administrative costs obligated and expended and award funds obligated or expended. As such the administrative costs ratio was not able to be determined. • No amounts were reported for the total obligation and expenditures for housing stability services. As such the housing stability services ratio was not able to be determined. • No amounts were reported for number of households served at certain income levels. • There was no evidence of internal controls (segregation of duties). ERA 2 report for the quarter ended March 31, 2023: • No amounts were reported for administrative costs obligated and expended and award funds obligated or expended. As such the administrative costs ratio was not able to be determined. • No amounts were reported for the total obligation and expenditures for housing stability services. As such the housing stability services ratio was not able to be determined. • No amounts were reported for number of households served at certain income levels. • There was no evidence of internal controls (segregation of duties). Repeat Finding from Prior Year: Yes – prior year findings 2022-026 and 2022-027. Recommendation: We recommend NHD implement internal controls to ensure reports are reviewed, support is maintained, and reports are complete and accurate prior to submission. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

U.S. Department of Treasury COVID-19 Emergency Rental Assistance Program, 21.023 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward and the assistance listing number is communicated at the time of disbursement to subrecipients. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: Subawards did not contain all the required information, assistance listing numbers were not communicated at the time of disbursement, an evaluation of the subrecipients risk for noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, adequate active monitoring procedures were not performed, and subrecipient audit reports were not reviewed. Cause: The Nevada Housing Division (NHD) did not have internal controls in place to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subrecipients out of a population of four was selected for testing. All three subrecipients were not assessed for risk of noncompliance, award agreements were missing required terms and conditions for a subaward, and there was no evidence active monitoring or review of the audit reports was performed. A nonstatistical sample of four pass-through payments out of a population of 18 was selected for testing. All four pass-through payments tested did not have the assistance listing communicated at the time of disbursement. Repeat Finding from Prior Year: No Recommendation: We recommend NHD enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

U.S. Department of Treasury COVID-19 Emergency Rental Assistance Program, 21.023 Special Tests and Provisions – ERA Funds Reallocation Material Weakness Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Pursuant to 15 USC 9058a(d), Treasury is required to reallocate “excess” ERA 1 award funds. Treasury’s objective in reallocations is to ensure ERA 1 award funds remain available to grantees in accordance with their jurisdictional needs and demonstrated capacity to deliver assistance while the ERA appropriations remain available. The Nevada Housing Division (NHD) was required to submit financial information to Treasury, which were used to calculate various reallocation expenditure ratios. Reallocation expenditure ratios determines whether the grantee is subject to involuntary reallocation due to an insufficient ratio and the amount of excess funds subject to recapture by Treasury. In addition, reallocation ratios were used to determine the eligibility to receive reallocated funds. Condition: NHD did not maintain documentation to support reallocation amounts submitted to Treasury in its application to receive reallocated funds. In addition, there was no segregation of duties in the preparation and review of amounts submitted. Cause: NHD did not have internal controls to ensure supporting documentation for amounts reported to the awarding agency was maintained. Effect: Amounts reported to the federal awarding agency for the reallocation expenditure ratios may be inaccurate, which may have impacted Treasury’s reallocation determination. Questioned Costs: None Context/Sampling: There was no sampling performed. All amounts reported with respect to reallocation were tested. No underlying documentation was available to review to validate any of the amounts reported. Repeat Finding from Prior Year: No Recommendation: We recommend NHD implement internal controls to ensure supporting documentation for amounts reported to the awarding agency is maintained. Views of Responsible Officials: The Nevada Housing Division disagrees with this finding.

U.S. Department of Treasury COVID-19 Homeowner Assistance Fund, 21.026 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: Subawards and disbursements did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed. Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: The entire population of one subrecipient was selected for testing, which included one payment. The subaward was missing required information, a risk assessment was not performed, and the payment was missing the assistance listing number. Repeat Finding from Prior Year: Yes – prior year finding 2022-032. Recommendation: We recommend NHD implement internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Fund, 21.027 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction. Cause: The Nevada State Purchasing Department (State Purchasing) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity or subrecipient that is suspended or debarred. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 1,500 was selected for testing, including 19 contracts subject to Appendix II to Part 200 and to suspension and debarment requirements (transactions that are not within the revenue loss eligible use criteria). Ten out of 19 contracts subject to Appendix II to Part 200 were missing certain required contract provisions. One out of 19 vendors subject to suspension and debarment requirements were not verified for suspension and debarment prior to entering into a covered transaction. Repeat Finding from Prior Year: Yes – prior year finding 2022-034. Recommendation: We recommend State Purchasing enhance internal controls to ensure all contracts under federal awards contain the applicable provisions and procedures are followed to ensure entities are not suspended or debarred prior to entering into covered transactions. Views of Responsible Officials: The Nevada State Purchasing Department agrees with this finding.\

U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Fund, 21.027 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. The Nevada Governor’s Finance Office (GFO) must submit quarterly Project and Expenditure Reports that contain COVID-19 related costs and obligations incurred during the covered period. Critical information includes: • Current period obligation • Cumulative obligation • Current period expenditure • Cumulative expenditure • Revenue Loss Calculation • Capital Expenditures Condition: Certain amounts included in the reports submitted did not agree to underlying support or underlying support for amounts reported were not maintained. Cause: GFO did not have adequate internal controls to ensure Project and Expenditure Reports were reconciled to underlying supporting documentation. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two Project and Expenditure Reports from a population of four was selected for testing. Variances were noted as follows for cumulative impacts: Reporting Period Ended September 30, 2022: Amount Reported Amount Supported by Underlying Documentation Current Period Obligations $117,487,595 $96,899,741 Cumulative Obligations $693,688,130 $187,993,359 Reporting Period Ended March 31, 2023: Amount Reported Amount Supported by Underlying Documentation Current Period Obligations $28,208,617 $27,909,659 Cumulative Obligations $939,517,635 $443,459,939 Current Period Expenditures $25,911,692 $57,487,724 Cumulative Expenditures $540,583,461 $556,630,740 Repeat Finding from Prior Year: No Recommendation: We recommend the GFO enhance internal controls to ensure Project Expenditure Reports are reconciled to underlying supporting documentation. Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.

U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Fund, 21.027 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward and the assistance listing number is communicated at the time of disbursement to subrecipients. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: Subawards were not entered into, assistance listing numbers were not communicated at the time of disbursement, an evaluation of the subrecipients risk for noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipient audit reports were not reviewed. Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies: • Governor’s Finance Office • Department of Agriculture • Aging and Disability Services Division • Division of Public and Behavioral Health Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of 30 subrecipients out of a population of 146 across all State agencies was selected for testing. A nonstatistical sample of 60 passthrough payments out of a population of approximately 2,200 was selected for testing. The following errors were noted by agency: Governor’s Finance Office We tested 7 subrecipients applicable to Governors Finance Office and noted a risk assessment was not performed for one of the subrecipients tested. Department of Agriculture We tested 13 pass-through payments applicable to the Department of Agriculture where the assistance listing was required to be communicated. The assistance listing was not communicated at the time of disbursement for seven pass-through payments tested. We tested 14 subrecipients applicable to the Department of Agriculture. A risk assessment was not performed for 12 subrecipients tested, a subaward agreement was not entered into for 11 subrecipients, and the subrecipient single audit report was not reviewed for one subrecipient. Aging and Disability Services Division We tested 2 pass-through payments applicable to the Nevada Aging and Disability Services Division. The assistance listing was not communicated at the time of disbursement for both pass-through payments tested. Division of Public and Behavioral Health We tested 2 pass-through payments applicable to the Division of Public and Behavioral Health. The assistance listing number was not communicated at the time of disbursement for both pass-through payments tested. Repeat Finding from Prior Year: Yes – prior year finding 2022-035. Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The State of Nevada agrees with this finding.

U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. The U.S. Department of Education provides Local Educational Agency (LEA) allocation tables to the Nevada Department of Education (NDE) for basic grants, concentration grants, targeted grants, and education finance incentive grants based on LEA-level data from the Bureau of Census. NDE makes adjustments to those tables for specific items prescribed by 34 CFR section 200 such as: o LEAs not on the census o Hold harmless o Newly opened or significantly expanded charter schools o School improvement funds o State administration Condition: NDE did not maintain the original calculation of adjustments performed to the base LEA allocation tables. The amounts allocated to the LEAs were not supported by documentation maintained by NDE. As part of our audit procedures, we requested NDE reperform the allocation adjustments. NDE reperformed the allocation adjustments but was unable to agree to the original allocations to the LEAs. Cause: NDE did not have sufficient internal controls to ensure supporting documentation of the adjustments and allocations to LEAs was maintained. Effect: LEAs may not receive the appropriate funding allocation. Questioned Costs: None Context/Sampling: The original allocation workbook was not maintained and therefore could not be tested. However, NDE reperformed a new allocation after our request. We noted variances from the reperformed allocation to the original funding allocation across all 19 LEAs as follows: o Basic grants had variances ranging from $11 to $2,896,904. o Concentration grants had variances ranging from $0 to $110,980. o Targeted grants had variances ranging from $2 to $3,439,895. o Finance incentive grants had variances between $1 to $2,539,768. The total amounts allocated were the same in the reperformed allocation when compared to the original allocation. Therefore, the ranges noted above represent both under and over allocation variances to the LEAs. However, the census information (adjustments) used by NDE were not updated from the prior year in the reperformed allocation. Therefore, there is no information available to determine whether allocations to the LEAs were accurate in either the original allocation or reperformed allocation. Repeat Finding from Prior Year: No Recommendation: We recommend NDE enhance internal controls to ensure supporting documentation of the adjustments and allocations to LEAs is maintained. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. A Local Educational Agency (LEA) may receive funds under Title I only if the State Educational Agency (SEA) finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from State and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waived by the U.S. Department of Education (34 CFR section 299.5). Condition: The Nevada Department of Education (NDE) did not maintain documentation, compiled from reports submitted by the LEAs, to monitor LEA compliance. As part of our audit procedures, we requested NDE compile the information to determine whether LEAs had met their fiscal effort requirements and whether NDE was required to take any necessary actions for failures to meet the fiscal effort requirements. Cause: NDE did not have sufficient internal controls to ensure maintenance of effort tracking was maintained and reviewed for accuracy and compliance. Effect: Noncompliance with maintenance of effort requirements may not be detected and NDE may not make required funding adjustments. If an LEA fails to maintain fiscal effort, NDE must reduce an LEA’s allocation under Title I if the LEA also failed to maintain effort in one or more of the five immediately preceding fiscal years in the exact proportion by which the LEA fails to maintain effort by falling below 90 percent of both the combined fiscal effort per student and aggregate expenditures. Questioned Costs: None Context/Sampling: NDE compiled expenditure data for 19 LEAs after our request. We reviewed overall compliance for all 19 LEAs and a non-statistical sample of 4 LEAs was selected for testing by tracing to original reports. Amounts included in the calculation for one LEA did not agree to underlying supporting documentation by $2,493. However, this variance did not change the overall conclusion on compliance for the one LEA with its fiscal effort. All 19 LEAs were found to have met their fiscal effort. Repeat Finding from Prior Year: Yes – prior year finding 2022-037. Recommendation: We recommend NDE enhance internal controls to ensure information used in the maintenance of effort monitoring document is maintained and reviewed for accuracy and compliance. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

U.S. Department of Education COVID-19 Education Stabilization Fund, 84.425 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award S425U210018 included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides the following requirements: • ESSER o A State Educational Agency (SEA) must allocate at least 90% of ESSER funds to Local Educational Agencies (LEA) using the statutorily prescribed formula. • ARP ESSER o Under section 2001(f) of the ARP act, each SEA must reserve: (1) at least 5% of ARP ESSER funds for evidence-based interventions that address the academic impact of lost instructional time; (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs. • Allowances for Administrative Costs o Under section 18001(e) of the CARES act and section 313(e) of the CRRSA act, an SEA may reserve up to 0.5% of it’s total ESSER I and ESSER II allocations for administrative cost. o Under Section 2001(f)(4) of the ARP Act, an SEA may reserve not more than 0.5% of the state’s total ARP ESSER award for administrative costs. o Under section 312(d)(5) of the CRRSA Act, an SEA may reserve up to 0.5% of its total allocation or up to $200,000, whichever is greater, to administer the EANS program. Condition: The Nevada Department of Education (NDE) did not meet the earmarking set aside for evidence-based summer enrichment programs and evidence-based after school programs. In addition, there is no evidence that compliance with the earmarking requirements (i.e., actual amounts meeting the allocations or that there could be future changes to allocated amounts) is monitored. Cause: NDE did not have adequate internal controls to ensure earmarking requirements were initially met and to ensure on-going compliance was monitored. Effect: Earmarking requirements were not met and may not be met in the future. Questioned Costs: None Context/Sampling: We tested all earmarking computations required to be completed in State fiscal year 2023. There was no evidence of monitoring the earmarking requirements. Under section 2001(f) of the ARP act, each SEA must reserve: (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs. • The minimum amount to allocate to evidence-based summer enrichment programs and evidence-based after school programs was $21,455,664 and the actual amount allocated was $20,040,662. The allocated amounts above were identified and reported in the prior year. However, there was no evidence of adjustments to these allocations in the current year. Repeat Finding from Prior Year: Yes – prior year finding 2022-042. Recommendation: We recommend NDE enhance internal controls to ensure earmarking requirements are initially met and implement internal controls to ensure ongoing compliance is monitored. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

U.S. Department of Education COVID-19 Education Stabilization Fund, 84.425 Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must: • Maintain state support for elementary and secondary education in fiscal year (FY) 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and • Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019. Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above maintenance of effort (MOE) requirement in each of FYs 2022 and 2023. The CRRSA and ARP Acts have two MOE baselines: • Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019). • Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019). Condition: The Nevada Department of Education (NDE) did not maintain the underlying supporting documentation or reconciliations to support amounts reported for the maintenance of effort requirements. NDE reported state expenditure amounts for elementary and secondary education as well as higher education, with a failure to meet the higher education maintenance of effort. However, as noted above, the amounts reported for state support for elementary and secondary education as well as higher education could not be verified. Lastly, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the maintenance of effort calculations. Cause: NDE did not have internal controls to ensure maintenance of effort was tracked, complied with, and supporting documents maintained. Effect: Maintenance of effort requirements may not be met. Questioned Costs: None Context/Sampling: We tested all maintenance of effort computations required to be completed in State fiscal year 2023 (fiscal year 2022 amounts reported in fiscal year 2023). As noted above, the amounts reported could not be verified. However, NDE’s reported amounts indicated that the higher education requirement was not met as follows: State support for higher education • Baseline percentage reported as 15.47% and actual percentage for state fiscal year 2022 was reported as 15.14%. Repeat Finding from Prior Year: Yes – prior year finding 2022-041. Recommendation: We recommend NDE implement internal controls to ensure maintenance of effort is tracked, complied with, and supporting documents maintained. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

U.S. Department of Education COVID-19 Education Stabilization Fund, 84.425 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Condition: Certain amounts included in the annual reports submitted for ESSER and EANS did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of the reports for ESSER, EANS, and GEER. Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance. Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely. Questioned Costs: None Context/Sampling: All four annual reports required to be filed in the State fiscal year were selected for testing; two reports for ESSER, one for GEER and one for EANS. The errors for the submitted reports were noted as follows: ESSER I Year 3 Annual Report • Amounts reported for key line 5a – full time equivalent positions for Southern Nevada Public Television did not agree to underlying support submitted by the subrecipient. Positions were reported as 75.52 on September 30, 2021 rather than 71.52 as supported by the underlying information provided by the subrecipient (1 of 56 entities reported). ESSER II Year 2 Annual Report • Information reported for key line 3c – Criteria used to Allocate Funds to Schools within LEA for Pershing County School District did not agree to support submitted by the subrecipient (1 of 35 entities reported). • Amounts reported were not supported by underlying documentation (not maintained or unusual variances not reconciled) for key line 5a – full time equivalent positions for White Pine County School District, College of Southern Nevada, Boys Town Nevada, Inc., The Achievement Network, Clark County Public Education Foundation, and Jobs for Nevada’s Graduates (6 of the 35 entities reported). EANS Year 2 Annual Report • There was no underlying documentation or support maintained for any obligation amounts reported in Lines 13a, 13c, 13f, 13h, 13k, and 13l. The aggregate obligations reported were $3,302,124. • Amounts reported for key line 15 – reporting on non-public schools receiving services or assistance under CCRSA EANS for Excel Christian School did not agree to support submitted by the subrecipient. Enrollment for the 19-20 school year was reported as 198 rather than the 191 as supported by the underlying information provided by the subrecipient (1 of 23 entities reported). Lastly, there was no evidence of review and approval (segregation of duties) for the ESSER I Year 3 Annual Report, EANS Year 2 Annual Report, or the GEER Year 2 Annual Report. Repeat Finding from Prior Year: Yes – prior year finding 2022-043. Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

U.S. Department of Health and Human Services Temporary Assistance for Needy Families, 93.558 COVID-19 Temporary Assistance for Needy Families, 93.558 Matching, Level of Effort, and Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. As provided by 45 CFR section 264.1, the average monthly number of families that include an adult or minor child head of household, or the spouse of the head of household, who has received assistance under any state program funded by federal TANF funds for more than 60 countable months (whether or not consecutive) may not exceed 20 percent of the average monthly number of all families to which the state provided assistance during the fiscal year or the immediately preceding fiscal year (but not both), as the state may elect. Condition: The Division of Welfare and Supportive Services (DWSS) compiles the caseload criteria above in a TANF NEON Cash Cases Hardship Report. There was no evidence that this report was approved, reviewed, or otherwise monitored. Cause: DWSS did not have internal controls to ensure caseload earmarking requirements are monitored. Effect: Noncompliance with earmarking requirements may not be detected. Questioned Costs: None Context/Sampling: The caseload report was generated for the entire state fiscal year. The average cases with more than 60 countable months were 0.19% of the total cases for the state fiscal year, which is below the 20% maximum allowed. However, this report is generated internally by DWSS on a quarterly basis (and aggregated to be summarized annually), and there was no evidence of a review being performed. Repeat Finding from Prior Year: No Recommendation: We recommend DWSS enhance internal controls to ensure caseload earmarking requirements are monitored. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Temporary Assistance for Needy Families, 93.558 COVID-19 Temporary Assistance for Needy Families, 93.558 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Division of Welfare and Supportive Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS, and, therefore, not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of three out of a population of nine applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 3 $1,381,291 Not Reported 3 $1,381,291 Not Timely 3 $1,381,291 Obligation Incorrect 3 $1,381,291 Missing Key Elements 3 $1,381,291 Repeat Finding from Prior Year: No Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Temporary Assistance for Needy Families, 93.558 COVID-19 Temporary Assistance for Needy Families, 93.558 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. The Division of Welfare and Supportive Services (DWSS) has developed risk based subrecipient monitoring policies and procedures to provide for reasonable assurance that subrecipients are complying with federal requirements. These policies indicate that DWSS will perform an onsite review at least every three years, with higher risk subrecipients being subjected to increased frequency of review and oversight. Condition: Certain subrecipients were identified as high risk by DWSS and were not subjected to higher frequency monitoring procedures as described by the DWSS policy, such as a desk review or on-site visit. Cause: DWSS did not have adequate internal controls to ensure program staff had adequate capacity to perform monitoring procedures for subrecipients in accordance with DWSS policy. Effect: Noncompliance at the subrecipient level may occur and not be detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subrecipients out of a population of nine was selected for testing. Of the three subrecipients selected, two were deemed high risk by DWSS and neither were monitored through desk review or on-site review during the year. Repeat Finding from Prior Year: No Recommendation: We recommend DWSS implement internal controls to ensure program staff have adequate capacity to perform monitoring procedures for subrecipients in accordance with DWSS policy. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Child Support Enforcement, 93.563 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.563 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward. Condition: Subawards did not contain all the required information. Cause: The Division of Welfare and Supportive Services (DWSS) did not have internal controls to ensure subawards contained all required information. Effect: The subrecipient may not be aware of all requirements and noncompliance could occur. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subrecipients out of a population of 15 was selected for testing. All three subrecipient agreements were missing required elements per 2 CFR 200.332. The items missing from the agreements were: •Federal Award Identification Number •Subrecipient Unique Entity Identifier •Indirect Cost Rate •Federal Award Date Repeat Finding from Prior Year: No Recommendation: We recommend DWSS implement internal controls to ensure subawards contain all required information. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 COVID-19 Low-Income Home Energy Assistance, 93.568 Cash Management Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Condition: Certain reimbursement requests were not reviewed and approved by an individual independent of the preparation of the request. Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure all reimbursement requests were reviewed and approved. Effect: Inaccurate reimbursement requests may occur and not detected by DWSS timely. Questioned Costs: None Context/Sampling: A nonstatistical sample of 29 reimbursement requests out of a population of 141 was selected for testing. Six reimbursement requests did not have the evidence of review and approval by an individual independent of the preparation (segregation of duties). Repeat Finding from Prior Year: Yes – prior year finding 2022-047. Recommendation: We recommend DWSS enhance internal controls to ensure all reimbursement requests are reviewed and approved in accordance with the Division’s internal control policy. Views of Responsible Officials: The Nevada Division of Welfare and Supportive agrees with this finding.

U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 COVID-19 Low-Income Home Energy Assistance, 93.568 Eligibility Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: As provided by 42 USC 8624(b)(2), assistance may be provided to: • Households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans’ benefits or; • Households with incomes which do not exceed the greater of 150% of the State’s established poverty level, or 60% of the State’s median income. Lower income eligibility criteria may be established, but no household may be excluded solely on the basis of income if the household income is less than 110% of the State’s poverty level. The Low-Income Home Energy Assistance State Plan (State Plan) establishes and describes assistance benefit levels, which provides for the calculation of a Fixed Annual Credit (FAC) and ultimately, the amount of assistance provided. Condition: The amount of assistance to provide was not calculated correctly. Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure annual and eligible income were correctly reflected. Effect: Benefits were not computed accurately and over disbursed. Questioned Costs: $307 Context/Sampling: A nonstatistical sample of 60 recipients ($66,234 benefits paid) out of a population of 12,285 ($16,985,706 benefits paid) was selected for testing. For one recipient, the annual and eligible income was reflected as $0. However, the annual and eligible income should have been $13,404 as supported by the case file, which impacted the benefit calculation and resulted in the over payment. Repeat Finding from Prior Year: Yes – prior year finding 2022-049. Recommendation: We recommend DWSS enhance internal controls to ensure annual and eligible income is correctly reflected. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 COVID-19 Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Welfare and Supportive Services (DWSS) is required to submit the LIHEAP Performance Data Form each year, which indicates the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds and the sources and uses of LIHEAP funds, respectively. Condition: Amounts reported for weatherization assistance benefits, unobligated funds, and administration costs did not have underlying documentation to support the amount reported. Cause: DWSS did not have adequate internal controls to ensure amounts reported on the LIHEAP Performance DATA Form were appropriately supported. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The one annual report submitted during the audit period was selected for testing. Weatherization Assistance Benefits of $617,842, Unobligated Funds of $286,708, and Administration Costs of $995,181 had no supporting documentation available to show how amounts were determined. Repeat Finding from Prior Year: No Recommendation: We recommend DWSS enhance internal controls to ensure amounts reported on the LIHEAP Performance Data Form are appropriately supported. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 COVID-19 Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects grant awards 2101NVLIEA and 2201NVLIEA 2022G992201 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Welfare and Supportive Services (DWSS) is required to submit the LIHEAP Carryover and Reallotment Report each year, which indicates the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds and the sources and uses of LIHEAP funds, respectively. Condition: The projected unobligated balance (carryover amount) had no underlying documentation or support the amount. Cause: DWSS did not have internal controls to ensure amounts reported on the LIHEAP Carryover and Reallotment Report were adequately documented and supported. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The one annual report submitted during the audit period was selected for testing. The following variances were noted on the report: Amount Reported Amount per Reconciliation Line 1.1 – Current Year payable $15,545,877 $15,012,533 Line 1.3 – Projected unobligated balance $286,709 $999,808 No explanation for the reconciling items between the reconciliation amounts and the amounts ultimately reported were provided. Repeat Finding from Prior Year: Yes – prior year finding 2022-050. Recommendation: We recommend DWSS implement internal controls to ensure amounts reported on the LIHEAP Carryover and Reallotment Report are adequately documented and supported. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 COVID-19 Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects grant awards 2101NVLIEA, 2201NVLIEA 2022G992201, 2301NVLIEA, 2301NVLIEE, and 2101NVE5C6 included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not include on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 4 $1,398,599 Not Reported 4 $1,398,599 Not Timely 4 $1,398,599 Obligation Incorrect 4 $1,398,599 Missing Key Elements 4 $1,398,599 Repeat Finding from Prior Year: Yes – prior year finding 2022-051. Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 COVID-19 Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Matching, Level of Effort, and Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Applicable to the matching fund (assistance listing 93.596), state expenditures will be matched at the Federal Medical Assistance Percentage (FMAP) rate for the applicable fiscal year. Private or public donated funds may be counted as state expenditures for this purpose subject to the limitations in 45 CFR section 98.53. Condition: The Division of Welfare and Supportive Services (DWSS) utilizes donated in-kind services from partner agencies and subrecipients to satisfy the match requirement for the matching fund. The in-kind services are cumulatively tracked and applied against the required match. During our audit procedures, we noted instances where the amount reported for matching expenditures did not agree to the in-kind cumulative tracker and instances where the underlying support (certified match letters received from partner agencies and subrecipients) did not agree to the tracker. Cause: DWSS did not have adequate internal controls to ensure the in-kind service match amounts are reconciled and reported accurately. Effect: Inaccurate amounts available for match may be maintained and may impact whether the matching requirement is met. Questioned Costs: None Context/Sampling: The matching fund was tested for the federal fiscal year 2020 matching grant, which had a period performance end of September 30, 2022. The match initially required was $6,252,334 (later adjusted in a final report to $7,233,384). The match reconciled in the cumulative balance tracker was $5,858,548. The match contributed from partner agencies and subrecipients was noted as $28,506,852; however, not all of the amounts tracked agreed to the underlying support. Although, $20,190,154 was agreed to the underlying support, which was sufficient to meet the matching requirement. Repeat Finding from Prior Year: No Recommendation: We recommend DWSS enhance internal controls to ensure in-kind service match amounts are reconciled and reported accurately. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 COVID-19 Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. The Division of Welfare and Supportive Services (DWSS) must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly. Condition: Certain amounts reported on the ACF-696 did not agree to underlying documentation. Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of four reports out of a population of 14 submitted during the audit period was selected for testing. Variances were noted as follows: Quarter Ended September 30, 2022 (FFY2021 – 2101NVCCDF) Amount Reported Amount per General Ledger Line 1d – Direct Services (Col C) $17,839,132 $17,912,019 Quarter Ended March 31, 2023 (FFY2020 – 2001NVCCDF) Amount Reported Amount per General Ledger Line 1 – Total Expenditures (Col B) $16,920,153 $23,235,306 Line 1d – Direct Services (Col B) $15,304,717 $16,294,920 Line 2a – State Expenditures (Col B) $625,234 $6,940,386 Repeat Finding from Prior Year: Yes – prior year finding 2022-053. Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 COVID-19 Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Division of Welfare Supportive Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS, and, therefore, not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of three out of a population of six applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 3 $135,360,827 Not Reported 3 $135,360,827 Not Timely 3 $135,360,827 Obligation Incorrect 3 $135,360,827 Missing Key Elements 3 $135,360,827 Repeat Finding from Prior Year: Yes – prior year finding 2022-054. Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Foster Care – Title IV-E, 93.658 Adoption Assistance, 93.659 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.658 and 93.659 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the Federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Allocation methods used in cost allocation did not agree to the approved cost allocation plan, amounts allocated did not agree to the general ledger, and allocation statistics did not agree to underlying support. Cause: The Nevada Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure costs were allocated accurately and in accordance with the cost allocation plan. Effect: Costs may be charged to the federal programs that do not agree to the cost allocation plan. Questioned Costs: Foster Care - $24,025 Adoption Assistance - $30,475 Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing (the September 30, 2022 and March 31, 2023 quarters). In summary, errors were noted as follows: • Two allocation methods did not agree to the submitted cost allocation plan. Rural Case Management Contracts are not included within the cost allocation plan and Temporary Staffing Contracts are direct to a different grant per the cost allocation plan, but were actually allocated as a result of RMS. • Total costs allocated (across all programs) in budget account 3145 were overstated by $69,615 in the September 30, 2022 quarter and were understated by $2,297 in the March 31, 2023 quarter when agreeing amounts to the general ledger. • Two allocation statistics did not agree to the underlying supporting documentation that impacted the allocation percentages by 0.32% and .02% for two allocation methods in the March 31, 2023 cost allocation. These ultimately represented an under allocation to federal programs. Repeat Finding from Prior Year: Yes – prior year finding 2022-056. Recommendation: We recommend DCFS enhance internal controls to ensure costs are allocated accurately and in accordance with the cost allocation plan. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

U.S. Department of Health and Human Services Foster Care – Title IV-E, 93.658 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant awards 2301NVFOST and G-2201NVFOST included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to or greater than $30,000. Condition: Required subaward information was not reported timely in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Division of Child and Family Services (DCFS) did not have internal controls to ensure subaward information was submitted timely in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS timely and therefore delayed on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of three subawards greater than $30,000 obligated during the year. The timeliness errors were noted as follows: Subawards Obligations Total Tested 3 $41,017,389 Not Reported - - Not Timely 2 $36,980,730 Obligation Incorrect - - Missing Key Elements - - The obligation date for the non-timely subawards was September 2022 and they were reported in January 2023. Repeat Finding from Prior Year: Yes – prior year finding 2022-057. Recommendation: We recommend DCFS implement internal controls to ensure subaward information is submitted timely in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

U.S. Department of Health and Human Services Foster Care – Title IV-E, 93.658 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement. Condition: The assistance listing number was not identified at the time of disbursement. Cause: The Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient. Effect: The subrecipient may not identify program receipts appropriately. Questioned Costs: None Context/Sampling: A nonstatistical sample of six subrecipient payments out of a population of 24 was selected for testing. The assistance listing number was not communicated on any of the payments. Repeat Finding from Prior Year: Yes – prior year finding 2022-058. Recommendation: We recommend DCFS enhance internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 457). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for eligible individuals. Condition: To enroll in CHIP, a beneficiary must apply for benefits to the Nevada Division of Welfare and Supportive Services (DWSS). An intake employee will review, timestamp, and input the application or redetermination into a casefile to provide for a second review of the application or redetermination by a supervisor. A redetermination was not always maintained to allow for the review by a supervisor. Cause: DWSS did not have adequate internal controls to ensure applications and redeterminations were properly documented and maintained. Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of a population of 32,339 eligible participants was selected for testing. One individual did not have an application or redetermination available for review. However, other supporting documentation was maintained that ultimately supported the eligibility determination and conclusion. Repeat Finding from Prior Year: Yes – prior year finding 2022-059. Recommendation: We recommend DWSS enhance internal controls to ensure applications and redeterminations are properly documented and maintained. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 and 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November). The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments. Condition: PARIS data was not utilized by the Division of Health Care Financing and Policy (DHCFP) or the Division of Welfare and Supportive Services (DWSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes. Cause: DHCFP and DWSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate. Effect: Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated. Questioned Costs: Projected questioned costs are $11,108,851 for Medicaid and $139,223 for CHIP. Context/Sampling: No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 55,251 participants with dual enrollment. Of those 55,251 participants, 8,439 participants were enrolled in another state after the State of Nevada. The projected questioned costs were estimated by performing the following: • Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada). • Estimating a weighted average capitation payment based on demographics that determine the payment amount. • Applying the weighted average capitation payments from the termination date through June 30, 2023 to determine the total projected questioned costs. • The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs. Repeat Finding from Prior Year: Yes – prior year finding 2022-061. Recommendation: We recommend DHCFP and DWSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate. Views of Responsible Officials: The Division of Health Care Financing and Policy and the Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Allowable Activities and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.403 provides that costs must be adequately documented to support the allowability of the cost. Condition: Underlying supporting documentation for certain administrative costs was not maintained by the Division of Health Care Financing and Policy (DHCFP). Cause: DHCFP did not have adequate internal controls to ensure supporting documentation for administrative expenditures was maintained. Effect: Administrative costs were charged to the federal program without appropriate supporting documentation. Questioned Costs: $5,459 Context/Sampling: A nonstatistical sample of 60 transactions ($634,037) out of a population of 4,335 transactions ($134,939,132) was selected for testing. No documentation was available to support seven transactions, totaling $5,459, that were charged to the federal program. These charges included general ledger descriptions of: • Per diem in-state • Annual leave • Building and grounds lease assessment • IT virtual server hosting • IT security assessment Of the seven transactions, five were journal vouchers that did not contain the underlying support for the journal voucher. One transaction was coded as a direct payment voucher and one transaction was coded as an expenditure to a cash receipt (rather than payment voucher). Repeat Finding from Prior Year: No Recommendation: We recommend DHCFP enhance internal controls to ensure supporting documentation for administrative expenditures is maintained. Views of Responsible Officials: The Division of Health Care Financing and Policy agrees with this finding.

U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 457). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for eligible individuals. Condition: To enroll in Medicaid, a beneficiary must apply for benefits to the Nevada Division of Welfare and Supportive Services (DWSS). An intake employee will review, timestamp, and input the application or redetermination into a casefile to provide for a second review of the application or redetermination by a supervisor. In certain instances, the application or redetermination was either not properly filed or not maintained to allow for review by a supervisor. Cause: DWSS did not have adequate internal controls to ensure applications and redeterminations were properly documented and maintained. Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of a population of 74,760 Modified Adjusted Gross Income (MAGI) based determinations was selected for testing. Two applications were not properly indexed or maintained in the casefile to allow for review by a supervisor. However, the other supporting documentation was maintained that ultimately supported the eligibility determination and conclusion. Repeat Finding from Prior Year: No Recommendation: We recommend DWSS enhance internal controls to ensure applications and redeterminations are properly documented and maintained. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Health Care Financing and Policy (DHCFP) is required to submit Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-64) reports based on actual recorded expenditures (42 CFR 430.30). Condition: Amounts reported on the CMS-64 were not supported by the underlying accounting information. Cause: DHCFP did not have adequate internal controls to ensure CMS-64 reports were accurate or supporting documentation for reconciling items was maintained. Effect: Inaccurate information may be reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-64 reports out of a population of four was selected for testing. DHCFP has manual adjustments to key line items within the CMS-64 from the general ledger. DHCFP did not maintain a record of any of the manual adjustments and we were unable to verify whether the manual adjustment was appropriate. In total, there were $36,128,957 in manual adjustments in the December 31, 2022 CMS-64 report and $5,364,337 in the March 31, 2023 CMS-64 report that we were unable to verify. Repeat Finding from Prior Year: Yes – prior year finding 2022-062. Recommendation: We recommend DHCFP enhance internal controls to ensure CMS-64 reports are accurate and supporting documentation is maintained. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2022-018: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Fresh Fruit and Vegetable Program, 10.582 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 10.553 and 10.555 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. Pursuant to Title 7 Agriculture Part 210 National School Lunch Program and Part 220 School Breakfast Program, state agencies are required to submit a report on school program operations (FNS-10) to Food and Nutrition Service (FNS) each month. Condition: Membership enrollment amounts reported on the FNS-10 report were inaccurate. Cause: The Nevada Department of Agriculture (NDA) did not have adequate internal controls to ensure accurate information was reported to the federal awarding agency. Effect: Inaccurate information was reported to FNS. Questioned Costs: None Context/Sampling: A nonstatistical sample of seven out of a population of 36 reports was selected for testing. The October 2021 FNS-10 report includes annual information (rather than monthly). Line 12b – Membership (Enrollment) of Public Schools was reported as 13. The actual enrollment supported by the underlying documentation of public schools was 22. Repeat Finding from Prior Year: No Recommendation: We recommend NDA enhance internal controls to ensure accurate information is reported to the federal awarding agency. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2022-019: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Fresh Fruit and Vegetable Program, 10.582 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559, and 10.582 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Agriculture (NDA) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of 6 out of a population of 54 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Repeat Finding from Prior Year: No Recommendation: We recommend NDA implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2022-020: U.S. Department of Labor Unemployment Insurance, 17.225 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. The Nevada Department of Employment, Training and Rehabilitation (DETR) must submit the ETA 2112 UI Financial Transaction Summary as directed by the Employment & Training Administration Handbook. This report is a monthly summary of transactions, which account for all funds received in, passed through, or paid out of the state unemployment fund. Condition: Amounts reported on the ETA 2112 were misreported by category (benefit type). Cause: DETR did not have adequate internal controls to ensure benefit payments were appropriately categorized by type. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of four out of 12 monthly reports was selected for testing. Errors were noted on each of the four reports tested as follows: Month Ended July 31, 2021 • Deposit and disbursement total variances of $29,400. • Off-setting variances in specific benefits ranging from $1,069 to $522,826. Month Ended August 31, 2021 • Off-setting variances in specific benefits ranging from $2,993 to $3,244,522. Month Ended December 31, 2021 • Off-setting variances in specific benefits ranging from $4,785 to $373,125. Month Ended April 30, 2022 • Off-setting variances in specific benefits ranging from $2,992 to $161,515. Repeat Finding from Prior Year: Yes – prior year finding 2021-026. Recommendation: We recommend the DETR enhance the internal controls to ensure benefit payments are appropriately categorized by type. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2022-021: U.S. Department of Labor Unemployment Insurance, 17.225 Special Tests and Provisions – UI Benefit Payments Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and in-depth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook). Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. State of Nevada, Department of Employment, Training and Rehabilitation, Manual of Operations, Chapter 7800, Part V, Section 7862 Supervisor Case Review states that the supervisor review is intended as a final check of information gathered and processed during the audit to ensure horizontal consistency, consistent and correct coding, and ensure all required elements are complete and included. Items/Areas of concern will be addressed to the investigator of the case and resolved prior to closing the case. Department of Labor ET Handbook 395, Part VI, Section 11 Completion of Cases and Timely Data Entry states that a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch, and 95% of cases must be completed within 90 days of the week ending batch; and a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year. Condition: Investigations performed by the BAM supervisor or senior investigator are not reviewed by someone other than the investigator. In addition, completion of cases and timely data entry requirements were not met. Cause: The Nevada Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure the timely data entry requirements were met. Effect: Errors may occur in a BAM investigation that are not detected or may not be detected timely. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 completed BAM cases out of a population of 734 was selected for testing. The investigator and reviewer were the same person for 17 of the cases tested. In addition, a time lapse report of case completion was examined for paid claims accuracy. Of these investigations, 85.19% of the cases were completed within 90 days, rather than the 95% required. In addition, the total completion percentage was 92.12% complete, rather than the 98% completion required. Repeat Finding from Prior Year: Yes – prior year finding 2021-028. Recommendation: We recommend DETR implement internal controls to ensure appropriate segregation of duties on all BAM investigations and to ensure timeliness requirements are met. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2022-022: U.S. Department of Labor WIOA Cluster: WIOA Adult Program, 17.258 WIOA Youth Activities, 17.259 WIOA Dislocated Worker Formula Grants, 17.278 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Department of Employment, Training, and Rehabilitation (DETR) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligation dates were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate. Questioned Costs: None Context/Sampling: A nonstatistical sample of three out of a population of eight applicable subawards obligations during the year was selected for testing.: Obligation dates were reported as October 1, 2021 for all three subawards rather than August 2, 2021 (two subawards) or September 22, 2021 (one subaward). Repeat Finding from Prior Year: No Recommendation: We recommend DETR implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Department of Employment, Training, and Rehabilitation agrees with this finding.

2022-023: U.S. Department of Labor WIOA Cluster: WIOA Adult Program, 17.258 WIOA Youth Activities, 17.259 WIOA Dislocated Worker Formula Grants, 17.278 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement. Condition: The assistance listing number was not identified at the time of disbursement. Cause: The Department of Employment, Training and Rehabilitation (DETR) did not have internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of a population of 571 payments to subrecipients was selected for testing. DETR did not communicate the award’s assistance listing number at the time of disbursement for all 60 payments. Repeat Finding from Prior Year: No Recommendation: We recommend DETR implement internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient. Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.

2022-024: U.S. Department of the Treasury Coronavirus Relief Fund, 21.019 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. The Nevada Governor’s Finance Office (GFO) must submit quarterly Financial Progress Reports that contain COVID-19 related costs incurred during the covered period to Treasury OIG. Critical information includes: • The total amount of payments received from Treasury. • The amount of funds received that were expended or obligated for each project or activity. • A detailed list and a description of all projects or activities for which funds were expended or obligated. • Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made that are greater than $50,000. Condition: Some expenditures were not reported in the appropriate classification or by vendor. Cause: GFO did not have adequate internal controls to ensure Financial Progress Reports were prepared in accordance with governing requirements. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two Financial Progress Reports from a population of four was selected for testing. Obligations for Direct Payments greater than $50,000 did not agree to underlying support. Transfers to other agencies within the State were reported as direct payments to the State of Nevada rather than reported by the vendor that those agencies expended funds to. In addition, payments to subrecipients were reported as direct payments to vendors rather than as a subrecipient payment. The cumulative impact is as follows: Reporting Period Ended December 31, 2021 For reporting category - direct payments > $50,000: Obligations were reported as $371,850,696. However, supporting documentation showed obligations of $44,591,536. Of the $371,850,696 $327,259,160 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or an aggregate payment to an individual. Expenditures were reported as $4,297,856. However, we identified $4,109,950 in expenditures that were reported as a direct payment to other state agencies, counties, or cities. The $4,109,950 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual. Reporting Period Ended June 30, 2022 For reporting category - direct payments > $50,000: Obligations were reported as $33,920,290. However, we identified $7,773,744 in obligations that were reported as a direct payment to other state agencies, counties, or cities. The $7,773,744 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual. Repeat Finding from Prior Year: Yes – prior year finding 2021-030. Recommendation: We recommend the GFO enhance internal controls to ensure Financial Progress Reports are prepared in accordance with governing requirements. Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.

2022-025: U.S. Department of the Treasury Coronavirus Relief Fund, 21.019 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities communicate the award’s assistance listing number to the subrecipient at the time of disbursement. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: Assistance listing numbers were not communicated at disbursement and there was no evidence that subrecipient audit reports were monitored. Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies: •Nevada Supreme Court •Nevada Governor’s Finance Office Effect: Noncompliance at the subrecipient level may occur and not be detected by the State. Questioned Costs: None Context/Sampling: A nonstatistical sample of 4 subrecipients out of a population of 18 across all State agencies was selected for testing. A nonstatistical sample of 12 pass-through payments out of a population of 56 was selected for testing. The following errors were noted by agency: Nevada Governor’s Finance Office We tested four subrecipients and nine pass-through payments applicable to the Governors Finance Office. No documentation was available to provide that any of the four subrecipient audit reports had been monitored. In addition, the assistance listing was not communicated at the time of disbursement for one pass-through payment tested. Nevada Supreme Court We tested three pass-through payments applicable to the Nevada Supreme Court. The assistance listing was not communicated at the time of disbursement for all three pass-through payments. Repeat Finding from Prior Year: Yes – prior year finding 2021-031. Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The agencies listed above agree with this finding.

2022-026: U.S. Department of Treasury Emergency Rental Assistance Program, 21.023 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. The OMB Compliance Supplement provides that states are required to submit Federal Financial Reports (SF-425). In addition, states are required to submit Quarterly Reports for Emergency Rental Assistance as amended by the Consolidated Appropriations Act of 2021 (ERA1) and Emergency Rental Assistance from the American Rescue Plan Act (ERA2). Condition: There was no review of the SF-425 reports or Quarterly Reports by an individual independent of the preparation of the reports. Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure reports are reviewed prior to submission. Effect: Inaccurate information may be submitted to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two SF-425 reports out of a population of four and four Quarterly Reports out of a population of eight was selected for testing. There was no evidence of segregation of duties on any of the reports selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend NHD implement internal controls to ensure reports are reviewed prior to submission. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2022-027: U.S. Department of Treasury Emergency Rental Assistance Program, 21.023 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The OMB Compliance Supplement provides that all grantees must submit Quarterly Reports with reporting periods of one calendar quarter and several cumulative fields covering all activity from the date of award through the quarter close. The key line items are the cumulative amount obligated and the cumulative amount expended. These Quarterly Reports are required for expenditures of Emergency Rental Assistance as amended by the Consolidated Appropriations Act of 2021 (ERA1) and Emergency Rental Assistance from the American Rescue Plan Act (ERA2). Condition: Quarterly Reports submitted for ERA2 were not prepared with the same underlying methodology as the ERA1 Quarterly Reports and adequate documentation was not available to support the inconsistent reporting. Cause: The Nevada Housing Division (NHD) did not have adequate internal controls to ensure required reports were prepared consistently and with appropriate supporting documentation. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of four Quarterly Reports out of a population of eight was selected for testing. The December 31, 2021 and March 31, 2022 ERA 2 Quarterly Reports were supported by partial underlying information. However, the information reported (i.e., what constituted an obligation and an expenditure) was different than the ERA 1 Quarterly Reports for the same quarter ends. Supporting documentation was not available to describe why the deviation in reporting methodology took place for the same quarter ends. Repeat Finding from Prior Year: Yes – prior year finding 2021-034. Recommendation: We recommend NHD enhance internal controls to ensure the Quarterly Reports are prepared consistently and with appropriate supporting documentation. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2022-029: U.S. Department of Treasury Homeowners Assistance Fund, 21.026 Cash Management Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 305(b)(1) states that pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized. In accordance with Title 2 of U.S Code of Federal Regulation (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 305(b)(8) and section 305(b)(9), HAF participants must maintain advance payments of their Federal awards in interest-bearing accounts, except in cases specified by that provision of regulations. HAF participants may retain up to $500 in earned interest annually from the date Treasury disbursed HAF award funds to the HAF participant. Any additional interest earned must be remitted annually to the Department of Health and Human Services Payment Management System. Condition: The Nevada Housing Division (NHD) did not adequately monitor cash drawdowns by their subrecipients to ensure that the time elapsing between transfer of federal funds to the subrecipient and their disbursement for the program purpose was minimized. NHD did not track interest earned on funds advanced by the Department of Treasury and did not remit NHD’s interest earned greater than $500. Cause: NHD did not have internal controls to ensure time between disbursement of federal funds to the subrecipient and their disbursement for program purposes was minimized and to ensure interest was appropriately tracked and remitted in accordance with federal regulations. Effect: An interest liability occurred due to cash advances not being spent as close as administratively feasible to when received and NHD’s interest was not remitted. Questioned Costs: None Context/Sampling: The entire population of two subrecipient payments were selected for testing. The subaward provided for an initial advance funding of $3,000,000 for initial program costs, which was advanced on September 16, 2021. A second payment was made on May 17, 2022 for $9,000,000 when the original $3,000,000 had not yet been spent. Interest of $213,019 was earned on funds advanced to NHD for the year ended June 30, 2022 and was not remitted to the Department of Health and Human Services Payment Management System in accordance with federal regulations. Repeat Finding from Prior Year: No Recommendation: We recommend NHD implement internal controls to ensure time between disbursement of federal funds to the subrecipient and their disbursement for program purposes is minimized and to ensure interest is appropriately tracked and remitted. Views of Responsible Officials: The Nevada Housing Division partially agrees with this finding.

2022-030: U.S. Department of Treasury Homeowners Assistance Fund, 21.026 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. The OMB Compliance Supplement requires that state homeowner assistance fund (HAF) participants submit a one-time interim report. Condition: There was no evidence that the one-time interim report was reviewed by an individual separate from the preparer. Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure there was documented review of the one-time interim report. Effect: Incorrect information may be submitted to the federal awarding agency. Questioned Costs: None Context/Sampling: We tested the entire population of one report submitted during the year. Repeat Finding from Prior Year: No Recommendation: We recommend NHD implement internal controls to ensure there is documented review of reports submitted to federal awarding agencies. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2022-031: U.S. Department of Treasury Homeowners Assistance Fund, 21.026 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of one subaward obligated during the year. The quantity and subaward obligation errors were noted as follows: Repeat Finding from Prior Year: No Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2022-032: U.S. Department of Health and Human Services Homeowner Assistance Fund, 21.026 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.026 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: Subawards and disbursements did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed. Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by NHD. Questioned Costs: None Context/Sampling: The entire population of one subrecipient was selected for testing, which included two payments. The subaward was missing required information, a risk assessment was not performed, and both payments were missing the assistance listing number. Repeat Finding from Prior Year: No Recommendation: We recommend NHD implement internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2022-033: U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Fund, 21.027 Allowable Activities Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that recipients may use funds for any eligible expenses subject to restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Treasury’s Interim Final Rule and Final Rule at 31 CFR sections 35.7 and 35.8, and Treasury’s FAQs. The Final Rule provides that recipients may use funds to replace lost public sector revenue to provide government services to the extent of the reduction in revenue experienced due to the pandemic. The lost revenue calculation is described in the Final Rule and provides an illustrative example of the definition of general revenue within the census bureau classification structure of revenue in the FAQs. Condition: Lost revenue was not calculated consistently in accordance with the Final Rule’s definition of general revenue. Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure the revenue loss calculation was prepared in accordance with governing requirements. Effect: The maximum allowable expenditures to be spent on government services pursuant to lost public sector revenue was inaccurate. Questioned Costs: None Context/Sampling: Cumulative lost revenue, applicable to fiscal year 2022 was calculated for calendar years 2020 and 2021. We examined the calculation performed by GFO and noted general revenues that were improperly excluded (from the base years and calculated years). We reperformed the calculation and noted the following: •We calculated a growth rate of 6.5% from the base years, whereas GFOused a growth rate of 5.2% (minimum rate allowable). •For calendar year 2020, GFO determined revenue loss to be$1,086,485,000. We recalculated revenue loss using all generalrevenues and revenue loss was determined to be $2,058,142,958. Thiswas a variance of $971,657,958 where GFO was understated in thecalculation of lost revenue (which does not cause any unallowableexpenditures). •For calendar year 2021, we and GFO both calculated lost revenue of $0,although the revenue comparisons were different based on therevenues and growth rate used. Repeat Finding from Prior Year: No Recommendation: We recommend GFO enhance internal controls to ensure the revenue loss calculation is prepared in accordance with the governing requirements. Views of Responsible Officials: The Nevada Governor’s Finance Office agrees with this finding.

2022-034: U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Fund, 21.027 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction. Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. The Nevada Housing Division (NHD) did not have adequate internal controls to ensure procedures were followed to verify subrecipients were not suspended or debarred prior to entering into a covered transaction. Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity or subrecipient that is suspended or debarred. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 2,500 was selected for testing, including 12 contracts subject to Appendix II to Part 200. A nonstatistical sample of three subrecipients out of a population of six was selected for testing. The following errors were noted by agency: Nevada Governor’s Finance Office Two of the contracts were missing certain applicable provisions. Suspension and debarment verification procedures were not performed for two vendors. Nevada Housing Division Suspension and debarment verification procedures were not performed for one subrecipient. Repeat Finding from Prior Year: No Recommendation: We recommend the State agencies listed above enhance internal controls to ensure all contracts under federal awards contain the applicable provisions and procedures are followed to ensure entities are not suspended or debarred prior to entering into covered transactions. Views of Responsible Officials: The State of Nevada agrees with this finding.

2022-035: U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Fund, 21.027 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward and the assistance listing number is communicated at the time of disbursement to subrecipients. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Condition: Subawards did not contain all the required information, assistance listing numbers were not communicated at the time of disbursement, an evaluation of each subrecipients risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and monitoring procedures were not performed. Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies: •Nevada Governor’s Finance Office •Nevada Housing Division Effect: Noncompliance at the subrecipient level may occur and not be detected by the State. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subrecipients out of a population of six across all State agencies was selected for testing. A nonstatistical sample of five pass-through payments out of a population of 20 was selected for testing. The following errors were noted by agency: Nevada Governor’s Finance Office We tested 5 pass-through payments applicable to the Nevada Governor’s Finance Office. The assistance listing was not communicated at the time of disbursement for all pass-through payments tested. Nevada Housing Division We tested one subrecipient applicable to the Nevada Housing Division. A risk assessment was not performed, the subaward was missing required information and no monitoring procedures were performed as necessary to ensure the subaward was used for authorized purposes. Repeat Finding from Prior Year: No Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The State of Nevada agrees with this finding.

2022-036: U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Fund, 21.027 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Governor’s Finance Office (GFO) did not have adequate internal controls to ensure payments to subrecipients were appropriately reported on the SEFA. Effect: Prior to correction, amounts passed through to subrecipients on the SEFA were overstated by $332,407,747. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend GFO enhance internal controls to ensure payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Governors Finance Office agrees with this finding.

2022-037: U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Matching, Level of Effort, and Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Condition: Information the Nevada Department of Education (NDE) compiled to monitor local educational agency compliance with maintenance of effort requirements did not agree to underlying supporting documentation. Cause: NDE did not have sufficient internal controls to ensure information included in the maintenance of effort monitoring document agreed to underlying documentation. Effect: Noncompliance with maintenance of effort requirements may not be detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of five school districts and four charter schools out of a population of 17 school districts and 37 charter schools was selected for testing. Amounts included in the calculation for one school district and one charter school did not agree to underlying supporting documentation. Repeat Finding from Prior Year: No Recommendation: We recommend NDE enhance internal controls to ensure information included in the maintenance of effort monitoring document agrees to underlying documentation. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-038: U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that State Educational Agencies must submit their average state per pupil expenditure data to the National Center for Education Statistics (State Per Pupil Expenditure Report). Condition: Formula errors in the State Per Pupil Expenditure Report resulted in amounts reported for certain pass-through dollars to be inaccurate. Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure the State Per Pupil Expenditure Report was completed accurately. Effect: Inaccurate information was reported to the National Center for Education Statistics. Questioned Costs: None Context/Sampling: The State Per Pupil Expenditure Report for the year ended June 30, 2021 (submitted in August 2022) was selected for testing. There were no expenditures reported for “Object Code 970 pass-through dollars”; however, the actual amount was $2,408,320. This error had no effect on the final per pupil expenditure calculation. Repeat Finding from Prior Year: No Recommendation: We recommend NDE enhance internal controls to ensure the State Per Pupil Expenditure Report is completed accurately. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-039: U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Required subaward information was not reported timely in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure subaward information was submitted timely in accordance with the FFATA. Effect: Subaward obligations were not reported timely in the FSRS. Questioned Costs: None Context/Sampling: A nonstatistical sample of four out of a population of 17 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Repeat Finding from Prior Year: Yes – prior year finding 2021-036. Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted timely in accordance with the FFATA. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-040: U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Special Tests and Provisions Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that a State Educational Agency (SEA) must apply section 4306(c) of the ESEA to calculate a hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school local educational agency (LEA). Condition: Documentation that the hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school LEA was not maintained and thus not able to be tested. Cause: The Nevada Department of Education (NDE) did not have internal controls to ensure appropriate documentation of the calculation of the hold-harmless base for the prior year that reflects the new or significantly expanded enrollment of the charter school LEA was maintained. Effect: Noncompliance with section 4306(c) of the ESEA may have occurred and not be detected or corrected. Questioned Costs: None Context/Sampling: No information was maintained by NDE; therefore, testing was not able to be performed. Repeat Finding from Prior Year: No Recommendation: We recommend NDE implement internal controls to ensure appropriate documentation of compliance with section 4306(c) of the ESEA is maintained. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-041: U.S. Department of Education Education Stabilization Fund, 84.425 Level of Effort – Maintenance of Effort Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Under section 317 of the CRRSA Act, a state that receives ESSER II, GEER II, or EANS funds under CRRSA Act must: • Maintain state support for elementary and secondary education in FY 2022 at least at the proportional level of the state’s overall spending, averaged over FYs 2017, 2018, and 2019; and • Maintain state support for higher education in FY 2022 at least at the proportional level of the state’s support for higher education relative to the state’s overall spending, averaged over FYs 2017, 2018, and 2019. Under section 2004(a) of the ARP Act, a state that receives ARP ESSER funds must meet the above MOE requirement in each of FYs 2022 and 2023. The CRRSA and ARP Acts have two MOE baselines: • Elementary and secondary education baseline, which averages the percentages of total spending that are used to support elementary and secondary education over the three baseline years (FYs 2017, 2018, and 2019). • Higher education baseline, which averages percentages of total state spending that are used to support higher education over the three baseline years (FYs 2017, 2018, and 2019). Condition: The Nevada Department of Education (NDE) did not provide supporting documentation to evidence that the State of Nevada met the level of effort requirements. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and the reviewer of the level of effort calculations. Cause: NDE did not have internal controls to ensure level of effort was tracked and supporting documents were maintained. Effect: Level of effort requirements may not be met. Questioned Costs: None Context/Sampling: We tested all level of effort computations required to be completed in State fiscal year 2022. A summary of the deficiency is as follows: State support for elementary and secondary education •NDE reported to the federal agency that maintenance of effort was met,but was unable to provide supporting documentation to support theamounts reported. State support for higher education •Proportional level from base years: 5.4% or $1,117,028,683 •Amounts reported as appropriated: 3.0% or $626,096,643 •Deficient appropriations based on reported levels by $490,932,040 •NDE was unable to provide supporting documentation for the amountsreported to the federal agency; the above calculations were calculatedon the information reported. Repeat Finding from Prior Year: No Recommendation: We recommend NDE implement internal controls to ensure level of effort is tracked and supporting documents are maintained. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-042: U.S. Department of Education Education Stabilization Fund, 84.425 Earmarking Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant awards S425U210018 and S425W210029 included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides the following requirements: • ESSER o An SEA must allocate at least 90% of ESSER funds to LEAs using the statutorily prescribed formula. • ARP ESSER o Under section 2001(f) of the ARP act, each SEA must reserve: (1) at least 5% of ARP ESSER funds for evidence-based interventions that address the academic impact of lost instructional time; (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs. • Allowances for Administrative Costs o Under section 18001(e) of the CARES act and section 313(e) of the CRRSA act, an SEA may reserve up to 0.5% of it’s total ESSER I and ESSER II allocations for administrative cost. o Under Section 2001(f)(4) of the ARP Act, an SEA may reserve not more than 0.5% of the state’s total ARP ESSER award for administrative costs. o Under section 312(d)(5) of the CRRSA Act, an SEA may reserve up to 0.5% of it’s total allocation or up to $200,000, whichever is greater, to administer the EANS program. Condition: The Nevada Department of Education (NDE) did not meet the earmarking set aside for evidence-based summer enrichment programs and evidence-based after school programs. In addition, there is no evidence that compliance with the earmarking requirements (i.e., actual amounts meeting the allocations or that there could be future changes to allocated amounts) is monitored. Cause: NDE did not have adequate internal controls to ensure earmarking requirements were initially met and to ensure on-going compliance was monitored. Effect: Earmarking requirements were not met and may not be met in the future. Questioned Costs: None Context/Sampling: We tested all earmarking computations required to be completed in State fiscal year 2022. There was no evidence monitoring of earmarking requirements. Under section 2001(f) of the ARP act, each SEA must reserve: (2) at least 1% of ARP ESSER funds for evidence-based summer enrichment programs; (3) at least 1% of ARP ESSER funds for evidence-based comprehensive after school programs. •The minimum amount to allocate to evidence-based summerenrichment programs and evidence-based after school programs was$21,455,664 and the actual amount allocated was $20,040,662. Repeat Finding from Prior Year: No Recommendation: We recommend NDE enhance internal controls to ensure earmarking requirements are initially met and implement internal controls to ensure on-going compliance is monitored. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-043: U.S. Department of Education Education Stabilization Fund, 84.425 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that State Educational Agencies submit annual reports over Governor’s Emergency Education Relief (GEER), Elementary and Secondary School Emergency Relief (ESSER) Grants and Emergency Assistance to Non-Public Schools (EANS). Each report contains data on expenditures, planned expenditures, subrecipients, and use of funds, including for mandatory reservations. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Condition: Certain amounts included in the annual reports submitted for EANS and GEER did not agree to underlying support or underlying support for amounts reported were not maintained. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports. Cause: The Nevada Department of Education (NDE) did not have internal controls to identify required information to be reported, ensure accuracy, or maintain adequate document retention to support compliance. Effect: Inaccurate or incomplete information was reported to the federal awarding agency or was not reported timely. Questioned Costs: None Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, GEER and EANS. The errors for the submitted reports were noted as follows: GEER 7/1/2020 through 6/31/2021 Report •The amount allocated was reported as $38,490,388, there was nounderlying support for the amount reported. •The amount expended was reported as $13,771,505, there was nounderlying support for the amount reported. •Administrative uses were reported as $0, there was no underlyingsupport for the amount reported. •Non-administrative uses were reported as $3,227,999, there was nounderlying support for the amount reported. •13 of the 18 local educational agencies reported did not agree tounderlying support for reportable categories. •No underlying support was available for information reported onInstitutions of Higher Education. •No underlying support was available for information reported on OtherEntities. EANS 7/1/2020 through 6/30/2021 Report •The amount expended was reported as $1,701,593, there was nounderlying support for the amount reported •The amount obligated (not yet expended) was reported as $12,357,444,there was no underlying support for the amount reported. •1 out of 22 non-public schools reported did not agree to underlyingsupport for reportable categories. Repeat Finding from Prior Year: Yes – prior year finding 2021-038. Recommendation: We recommend NDE implement internal controls to identify required information to be reported, ensure accuracy, and maintain adequate document retention to support compliance. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-044: U.S. Department of Education Education Stabilization Fund, 84.425 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Accurate and timely subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported accurately or timely in the FSRS; therefore, public information disclosures are inaccurate. Questioned Costs: None Context/Sampling: A nonstatistical sample of 15 out of a population of 74 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Repeat Finding from Prior Year: Yes – prior year finding 2021-039. Recommendation: We recommend NDE enhance internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-045: U.S. Department of Education Education Stabilization Fund, 84.425 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward. Pass-through entities identify the dollar amount made available under each federal award and the assistance listing number at time of disbursement. Condition: Subaward agreements did not contain all the required information and assistance listing numbers were not communicated at the time of disbursement. Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure subawards and disbursements to subrecipients included all required information. Effect: Noncompliance at the subrecipient level may occur and not be detected by NDE. Questioned Costs: None Context/Sampling: A nonstatistical sample of 13 out of a population of 65 subrecipients was selected for testing. The 13 subrecipients had a total of 28 subawards issued. Required information was missing from 14 of the 28 subawards tested. The missing information was related to: federal award date to the State by the federal agency, name of the federal awarding agency, and whether the award included research and development activities. A nonstatistical sample of 60 out 1601 subrecipient payments was selected for testing. The assistance listing number was not communicated at the time of disbursement for 15 of the subrecipient payments. Repeat Finding from Prior Year: No Recommendation: We recommend NDE enhance internal controls to ensure subawards and disbursements to subrecipients include all required information. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-046: U.S. Department of Education Education Stabilization Fund, 84.425 Other Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Department of Education (NDE) did not have adequate internal controls to ensure payments to subrecipients were recorded to the designated subrecipient general ledger accounts within the chart of accounts. The Controller’s Office uses the chart of accounts to prepare the SEFA. Effect: Prior to correction, the total federal expenditures passed through to subrecipients on the SEFA were overstated by $1,667,511. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: Yes – prior year finding 2021-041. Recommendation: We recommend NDE enhance internal controls to ensure payments to subrecipients are recorded to the designated subrecipient general ledger accounts within the chart of accounts. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2022-047: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Cash Management Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Condition: A reimbursement request was not reviewed and approved by an individual independent of the preparation of the request. Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure all reimbursement requests were reviewed and approved in accordance with the Division’s internal control policy. Effect: Inaccurate reimbursement requests may occur and not detected by DWSS timely. Questioned Costs: None Context/Sampling: A nonstatistical sample of 14 reimbursement requests out of a population of 68 was selected for testing. One reimbursement request did not have the evidence of review and approval in accordance with DWSS’s internal control policy. Repeat Finding from Prior Year: No Recommendation: We recommend DWSS enhance internal controls to ensure all reimbursement requests are reviewed and approved in accordance with the Division’s internal control policy. Views of Responsible Officials: The Nevada Division of Welfare and Supportive agrees with this finding.

2022-048: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. The Low-Income Home Energy Assistance State Plan (State Plan) provides for internal controls related to beneficiary case reviews, in part, as follows: Supervisors are required to complete a set number of case reviews per worker per month to monitor staff performance. Trainees and staff with performance issues are subject to 100% review prior to the posting of benefits. The Program Manager reviews a subset of the review completed by the supervisors to ensure they are adequately identifying and addressing performance issues. Condition: Supervisor case reviews were not performed in accordance with the State Plan. Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure beneficiary case review policies were followed due to supervisory retirements in which the positions were not refilled in a timely manner. Effect: Inaccurate eligibility or benefit determinations may be established and not detected by DWSS. Questioned Costs: None Context/Sampling: We examined a listing of beneficiary case reviews performed for the entire year. A total of 20 non trainee reviews were performed out of approximately 396, and only two months out of the year were performed for trainee reviews that were required to be performed in accordance with the State Plan. Repeat Finding from Prior Year: Yes – prior year finding 2021-047. Recommendation: We recommend DWSS enhance internal controls to ensure beneficiary case review policies are followed. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2022-049: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Eligibility Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: As provided by 42 USC 8624(b)(2), assistance may be provided to: • Households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans’ benefits or; • Households with incomes which do not exceed the greater of 150% of the State’s established poverty level, or 60% of the State’s median income. Lower income eligibility criteria may be established, but no household may be excluded solely on the basis of income if the household income is less than 110% of the State’s poverty level. The Low-Income Home Energy Assistance State Plan (State Plan) establishes and describes assistance benefit levels, which provides for the calculation of a Fixed Annual Credit (FAC) and ultimately, the amount of assistance provided. Condition: The amount of assistance to provide was not calculated correctly as it related to social security cost-of-living increases. Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure the social security cost of living increases were appropriately adjusted in recipients’ income calculation. Effect: The recipient was entitled to more assistance than calculated. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 recipients out of a population of approximately 18,865 was selected for testing. We noted an error in the amount of income used in the calculation of benefits for two recipients. The sample totaled $53,854 in benefits paid and the error was $11.85. Repeat Finding from Prior Year: Yes – prior year finding 2021-046. Recommendation: We recommend DWSS enhance internal controls to ensure the social security cost of living increases are appropriately adjusted in the recipients’ income calculation. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2022-050: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award 2101NVLIEA on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Welfare and Supportive Services (DWSS) is required to submit the LIHEAP Carryover and Reallotment Report each year, which indicates the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Condition: The projected unobligated balance (carryover amount) did not agree to the underlying actual unobligated balance and there was no underlying documentation or support to support the variance. Cause: DWSS did not have adequate internal controls to ensure the unobligated balance was adequately documented and supported. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The one annual report submitted during the audit period was selected for testing. The projected regular block grant carryover amount was reported as $0 on January 12, 2022. The underlying account records supported a carryover amount of $298,004 as of September 30, 2021. There was no documentation available to explain why the projected balance was different from the actual balance when the projected balance was reported at a later date. Repeat Finding from Prior Year: Yes – prior year finding 2021-048. Recommendation: We recommend DWSS enhance internal controls to ensure the projected unobligated balance is adequately documented and supported. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2022-051: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows: Repeat Finding from Prior Year: Yes – prior year finding 2021-050. Recommendation: We recommend NHD implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2022-052: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipients were not monitored to ensure audits required by Uniform Guidance were performed. Cause: The Nevada Housing Division (NHD) did not have internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: A nonstatistical sample of two subrecipients out of a population of four was selected for testing. A risk assessment was not performed and the subawards were missing required information for both subrecipients. In addition, there was no documentation available to demonstrate that the two subrecipients were monitored to ensure Uniform Guidance audits were obtained, if required, or that management decisions were issued, if applicable. Repeat Finding from Prior Year: Yes – prior year finding 2021-051. Recommendation: We recommend the NHD implement internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2022-053: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. State agencies must submit the ACF-696, Child Care and Development Fund Financial Reports quarterly. Condition: The Division of Welfare and Support Services (DWSS) did not maintain underlying documentation to support the amounts reported in the ACF-696 reports. Cause: DWSS did not have internal controls to ensure the amounts reported were adequately documented and supported. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two quarterly reports out of a population of four submitted during the audit period were selected for testing. Reconciliations or other records of the underlying accounting system to the amounts reported were not retained by the Division for both reports selected for testing. Therefore, we were unable to test the accuracy of the amounts reported in the ACFR-696 reports for the quarters ended September 30, 2021 and March 31, 2022. Repeat Finding from Prior Year: No Recommendation: We recommend DWSS implement internal controls to ensure the amounts reported are adequately documented and supported. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

2022-054: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Division of Welfare Support Services (DWSS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subawards obligated during the year out of a population of eight was selected for testing. The quantity and subaward obligation errors were noted as follows: Repeat Finding from Prior Year: No Recommendation: We recommend DWSS implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

2022-055: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward. Pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: Subawards did not contain all the required information, an evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed. Cause: The Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure risk assessments were performed and subawards contained all required items. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subrecipients out of a population of eight was selected for testing. A risk assessment was not performed for one subrecipient and two subawards were missing communication of whether any research and development activities were included. Repeat Finding from Prior Year: Yes – prior year finding 2021-052. Recommendation: We recommend DWSS enhance internal controls to ensure risk assessments are performed and subawards contain all required items. Views of Responsible Officials: The Division of Welfare and Supportive Services agrees with this finding.

2022-056: U.S. Department of Health and Human Services Foster Care – Title IV-E, 93.658 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the Federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Allocation methods used in cost allocation did not agree to the approved cost allocation plan and allocation statistics did not agree to underlying support. Cause: The Nevada Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure costs were allocated accurately and in accordance with the cost allocation plan. Effect: Costs may be charged to the federal programs that do not agree to the cost allocation plan. Questioned Costs: None as known and projected costs are less than $25,000. Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing. One allocation method did not agree to the submitted cost allocation plan for the March 31, 2022. In addition, one allocation statistic included an error that impacted the allocation percentages by 0.32% for one allocation method in the March 31, 2022 cost allocation. Repeat Finding from Prior Year: Yes – prior year finding 2021-054. Recommendation: We recommend DCFS enhance internal controls to ensure costs are allocated accurately and in accordance with the cost allocation plan. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2022-057: U.S. Department of Health and Human Services Foster Care – Title IV-E, 93.658 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000. Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Division of Child and Family Services (DCFS) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA’s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of two subawards obligated during the year. The quantity and subaward obligation errors were noted as follows: Repeat Finding from Prior Year: Yes – prior year finding 2021-055. Recommendation: We recommend DCFS implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2022-058: U.S. Department of Health and Human Services Foster Care – Title IVE-E, 93.658 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award’s assistance listing number is identified to the subrecipient at the time of disbursement. Condition: The assistance listing number was not identified at the time of disbursement. Cause: The Division of Child and Family Services (DCFS) did not have adequate internal controls to ensure the assistance listing number was communicated on each disbursement to a subrecipient. Effect: Noncompliance at the subrecipient level may occur and not be detected by DCFS. Questioned Costs: None Context/Sampling: A nonstatistical sample of four subrecipient payments out of a population of 31 was selected for testing. The assistance listing number was not communicated on one payment. Repeat Finding from Prior Year: No Recommendation: We recommend DCFS enhance internal controls to ensure the assistance listing number is communicated on each disbursement to a subrecipient. Views of Responsible Officials: The Nevada Department of Child and Family Services agrees with this finding.

2022-059: U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 457). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for eligible individuals. Condition: Individuals were deemed eligible but were placed in an incorrect aid category or did not have supporting documentation available for review. Cause: The Nevada Division of Welfare and Supportive Services (DWSS) did not have adequate internal controls to ensure aid categories were accurate or applications for CHIP were maintained. Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of a population of 32,789 eligible participants was selected for testing. One individual had the incorrect aid code classified and two individuals did not have applications available for review. Repeat Finding from Prior Year: Yes – prior year finding 2021-056. Recommendation: We recommend DWSS enhance internal controls to ensure that aid categories are accurate and applications for CHIP are maintained. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2022-060: U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Health Care Financing and Policy (DHCFP) is required to submit Quarterly Children’s Health Insurance Program Statement Expenditures for Title XXI (CMS-21) reports based on actual recorded expenditures (Sections 2105(e) and 2107(b)(1) of Title XXI). Condition: Amounts reported on the CMS-21 were not supported by the underlying accounting information. Cause: DHCFP did not have adequate internal controls to ensure CMS-21 reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-21 reports out of a population of four was selected for testing. DHCFP was unable to provide support for one variance identified. The December 31, 2021 CMS-21 report had the following unreconciled variance (Total Computable Column). • Lines 1B/1D: $253 (less reported than general ledger support) Repeat Finding from Prior Year: Yes – prior year finding 2021-057. Recommendation: We recommend DHCFP enhance internal controls to ensure CMS-21 reports are accurate. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2022-061: U.S. Department of Health and Human Services Children’s Health Insurance Program (CHIP), 93.767 Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 and 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: Title 42 Public Health section 435.403 State Residence provides that the State must provide Medicaid to eligible residents of the State, including residents who are absent from the State, except in cases where another state has determined that the person is a resident there for purposes of Medicaid. The Medicaid State Plan provides that the State has an eligibility determination system for data matching through the Public Assistance Reporting Information System (PARIS). The information that is requested is to be exchanged with states and other entities legally entitled to verify Title XIX applications and individuals eligible for covered Title XIX services consistent with applicable PARIS agreements. The State will transmit and receive data quarterly (February, May, August, and November). The State enrolls beneficiaries on a mandatory basis into managed care entities (managed care organizations and/or primary care case managers) in the absence of certain allowable waivers. The State contracts with managed care organizations and reimburses them for capitation payments. Condition: PARIS data was not utilized by the Division of Health Care Financing and Policy (DHCFP) or the Division of Welfare and Supportive Services (DWSS) to monitor residency changes to determine when managed care benefits needed to be terminated because the beneficiary was a resident of another state for Medicaid purposes. Cause: DHCFP and DWSS did not have internal controls in place to effectively communicate the PARIS data between the two agencies to ensure managed care benefits were terminated when appropriate. Effect: Individuals are enrolled in Medicaid (and CHIP) plans in multiple states and benefits are not being terminated timely. Therefore, the State of Nevada is paying capitation payments to managed care organizations, when the benefits should have been terminated. Questioned Costs: Projected questioned costs are $12,743,890 for Medicaid and $186,062 for CHIP. Context/Sampling: No sampling was used. The PARIS data was obtained and examined in total. The PARIS data included 56,892 participants with dual enrollment. Of those 56,892 participants, 9,722 participants were enrolled in another state after the State of Nevada. The projected questioned costs were estimated by performing the following: • Identifying individuals who enrolled in another state after they had enrolled in Nevada (termination date for Nevada). • Estimating a weighted average capitation payment based on demographics that determine the payment amount. • Applying the weighted average capitation payments from the termination date through June 30, 2022 to determine the total projected questioned costs. • The total projected questioned costs were then allocated between Medicaid and CHIP using participant counts in each plan between the ages of 0-18. Participants older than 18 were allocated to Medicaid. The allocated projected questioned costs were then multiplied by a weighted average Federal Medical Assistance Percentage (FMAP) to determine the final projected federal questioned costs. Repeat Finding from Prior Year: No Recommendation: We recommend DHCFP and DWSS implement internal controls to effectively communicate the PARIS data between each other and to ensure managed care benefits are terminated when appropriate. Views of Responsible Officials: The Division of Health Care Financing and Policy and the Division of Welfare and Supportive Services agrees with this finding.

2022-062: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Health Care Financing and Policy (DHCFP) is required to submit Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-64) reports based on actual recorded expenditures (42 CFR 430.30). Condition: Amounts reported on the CMS-64 were not supported by the underlying accounting information. Cause: DHCFP did not have adequate internal controls to ensure CMS-64 reports were accurate or supporting documentation for reconciling items was maintained. Effect: Inaccurate information may be reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-64 reports out of a population of four was selected for testing. DHCFP has manual adjustments to key line items within the CMS-64 from the general ledger. DHCFP did not maintain a record of any of the manual adjustments and we were unable to verify whether the manual adjustment was appropriate. In total, there were $91,007,519 in manual adjustments in the December 31, 2021 CMS-64 report and $121,971,786 in the March 31, 2022 CMS-64 report that we were unable to verify. Repeat Finding from Prior Year: Yes – prior year finding 2021-061. Recommendation: We recommend DHCFP enhance internal controls to ensure CMS-64 reports are accurate and supporting documentation is maintained. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2022-063: U.S. Department of Health and Human Services Opioid STR, 93.788 Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.788 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. The grant agreements provide that no more than five percent of the total grant award may be used for administrative and infrastructure development costs. In addition, no more than two percent of the total grant award may be used for data collection and reporting. Condition: The Nevada Division of Public and Behavioral Health (DPBH) did not have evidence of monitoring administrative, infrastructure development, data collection, and reporting costs to ensure they did not exceed the maximum allowable. Cause: DPBH did not have internal controls to provide for the monitoring of earmarking requirements. Effect: Costs may be expended above the maximum allowable. Questioned Costs: None Context/Sampling: No sampling was performed; earmarking requirements were tested in total. DPBH did not exceed the maximum allowable spending; however, there was no evidence that the earmarking requirement was actively monitored. Repeat Finding from Prior Year: No Recommendation: We recommend DPBH implement internal controls to provide for the monitoring of earmarking requirements. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2022-064: U.S. Department of Health and Human Services Opioid STR, 93.788 Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.788 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-Federal entities are prohibited from contracting with parties that are suspended or debarred under covered transactions. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction. Cause: The Nevada Division of Public and Behavioral Health (DPBH) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity that is suspended or debarred. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of a population of 263 was selected for testing, including 11 contracts subject to Appendix II to Part 200. Eight vendor contracts selected did not contained the applicable provisions required by Appendix II to Part 200 and of those eight, seven were missing procedures to verify the vendor was not suspended or debarred. Repeat Finding from Prior Year: No Recommendation: We recommend DPBH enhance internal controls to ensure all contracts under federal awards contain the applicable contract provisions and to ensure procedures are followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2022-065: U.S. Department of Health and Human Services Opioid STR, 93.788 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 93.788 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. The grant agreements require that award recipients submit an annual and a midyear Performance Progress Report (PPR). Condition: The Nevada Division of Public and Behavioral Health (DPBH) did not maintain underlying documentation to support the amounts reported in annual and midyear PPRs. Cause: DPBH did not have internal controls to maintain adequate document retention to support compliance with the reporting requirements. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The annual performance report and the mid-year performance report submitted during the audit period were selected for testing. Support was not maintained to reconcile or verify the accuracy of the amounts reported to the federal awarding agency for either report. Repeat Finding from Prior Year: No Recommendation: We recommend DPBH implement internal controls to maintain adequate document retention to support compliance with the reporting requirements. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2021-018: U.S. Department of Agriculture SNAP Cluster: Supplemental Nutrition Assistance Program (SNAP), 10.551 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program, 10.561 U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Low-income Home Energy Assistance, 93.568 Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Children?s Health Insurance Program (CHIP), 93.767 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 10.561, 93.575, 93.596, 93.568, 93.778, and 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, subpart E, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Allocation statistics used in cost allocation did not agree to the underlying support and the internal review process was not documented. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to document review of allocation statistics and ensure that the allocation statistics were accurate. Effect: Administrative costs claimed were inaccurate. Questioned Costs: None as known and projected questioned costs are less than $25,000. Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing. Some allocations based on full-time equivalents (FTE?s) were not supported by the underlying data for both quarters. In addition, there was no evidence of review. Repeat Finding from Prior Year: Yes ? prior year finding 2020-023. Recommendation: We recommend the Division enhance internal controls to document review of allocation statistics and ensure that the allocation statistics are accurate. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-019: U.S. Department of Agriculture SNAP Cluster: Supplemental Nutrition Assistance Program (SNAP), 10.551 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program, 10.561 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 10.561 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: An evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure risk assessment was performed. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: A non-statistical sample of seven subrecipients out of a population of 24 was selected for testing. Risk assessment was not performed for all seven subrecipients. Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure risk assessment is performed. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-020: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Child Nutrition Discretionary Grants Limited Availability, 10.579 Activities Allowed or Unallowed/Allowable Cost Principles and Cash Management Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559 and 10.579 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.334 provides that records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respective, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Uniform Guidance section 200.403 provides that costs must be adequately documented in order to be allowable. Uniform Guidance section 200.305 provides that payment methods must minimize the time elapsing between the transfer of funds from the passthrough entity and the disbursement by the subrecipient. Condition: Transaction records were not retained, resulting in the inability to determine compliance. Cause: The Nevada Department of Agriculture (the Department) did not have adequate internal controls to ensure appropriate document retention. Effect: Unallowable costs may have been charged to the federal awards and payments to subrecipients may not have followed the timing requirements. Questioned Costs: $30,103 Context/Sampling: A nonstatistical sample of 60 transactions out of a population of approximately 1,250 was selected for testing. The total sample tested was $7,060,246 from a population of $120,840,577. Support could not be provided for three transactions totaling $30,103 as well as two other credit adjustments for $(6,576). Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure appropriate document retention. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2021-021: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Child Nutrition Discretionary Grants Limited Availability, 10.579 Cash Management Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559 and 10.579 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.334 provides that records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respective, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. The Uniform Guidance section 200.305 provides that payments are governed by the Treasury-State Cash Management Improvement Act (CMIA) agreements for disbursement of federal funds. Condition: Transaction records were not retained, resulting in the inability to determine compliance with the State?s Treasury-State Agreement. Cause: The Nevada Department of Agriculture (the Department) did not have adequate internal controls to ensure appropriate document retention. Effect: The Department may not be in compliance with the Treasury-State Agreement. Questioned Costs: None Context/Sampling: A nonstatistical sample of nine transactions totaling $5,307,069 out of a population of 57 totaling $122,338,845 was selected for testing. Documentation regarding the underlying expenditures and check run the federal draw was receipted for could not be provided for five transactions totaling $95,535. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure appropriate document retention. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2021-022: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Child Nutrition Discretionary Grants Limited Availability, 10.579 Special Tests and Provisions ? Accountability for USDA-Donated Foods Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 10.553, 10.555, 10.556, 10.559 and 10.579 on the Schedule of Expenditures of Federal Awards. Criteria: Distributing and sub distributing agencies (as defined at 7 CFR section 250.3) must maintain accurate and complete records with respect to the receipt, distribution, and inventory of USDA-donated foods, including end products processed from donated foods. Failure to maintain records required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or loss of donated foods (7 CFR sections 250.16(a)(6) and 250.15(c)). Condition: Year-end physical inventory observations performed by the Nevada Department of Agriculture could not be rolled forward, using receipt and distribution records, to the physical inventory observation performed during the audit. Cause: The Department did not have adequate internal controls to ensure accurate rollforward reconciliations of inventory balances. Effect: Year-end inventory balances may not be accurate. Questioned Costs: None Context/Sampling: A nonstatistical sample of 26 commodities out of a population of 34 was selected for roll-forward testing. The year-end physical inventory count was performed on June 21, 2021 and the roll-forward was performed to subsequent inventory counts on November 29, 2021 and December 2, 2021 (depending on location of warehouse). The Department was unable to reconcile 19 of the 26 commodities tested. Variances ranged from 172 additional units to 68 fewer units, depending on the commodity. Repeat Finding from Prior Year: None Recommendation: We recommend the Department enhance internal controls to ensure accurate roll-forward reconciliations of inventory balances. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2021-023: U.S. Department of Agriculture Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Special Milk Program for Children, 10.556 Summer Food Service Program for Children, 10.559 Child Nutrition Discretionary Grants Limited Availability, 10.579 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects the National School Lunch Program Commodities and Summer Food Service Program Commodities grant awards included under assistance listings 10.555 and 10.559 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA). The Uniform Guidance section 200.502 provides that food commodities received from a federal awarding agency be included on the SEFA. Condition: Food commodities received from the federal awarding agency were not originally reported on the SEFA. Cause: The Nevada Department of Agriculture (the Department) did not have adequate internal controls to ensure food commodities were appropriately reported on the SEFA. Effect: Prior to correction, the SEFA was understated by $3,502,717. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure food commodities are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Department of Agriculture agrees with this finding.

2021-024: U.S. Department of Agriculture Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 10.557 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 10.557 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Cause: The Nevada Division of Public and Behavioral Health (the Division) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions. Effect: Contractors may not be aware of required terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 3,000 was selected for testing, including 12 contracts subject to Appendix II to Part 200. Eight of the contracts were missing certain applicable provisions. Repeat Finding from Prior Year: Yes - prior year finding 2020-012. Recommendation: We recommend the Division enhance internal controls to ensure all contracts under federal awards contain the applicable provisions. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2021-025: U.S. Department of Labor Unemployment Insurance, CFDA 17.225 U.S. Department of Homeland Security Presidential Declared Disaster Assistance to Individuals and Households ? Other Needs, 97.050 Eligibility Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 17.225 and 97.050 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation (FPUC) programs were created via the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Covered individuals under PUA were those who were not eligible for regular unemployment compensation and unemployed, partially unemployed, or unable or unavailable to work due to COVID-19. The eligibility criteria was based on self-certification; however, states may request supporting documentation if they have reasonable suspicions of fraud (Q23 of Attachment I to UIPL No 16-20, Change 2). FPUC was provided as supplemental benefits to PUA, regular UI, and other programs. Payment for supplemental lost wages (LWA) was authorized under the ?Other Expenses? category of Other Needs Assistance (ONA), in accordance with section 408(e)(2) of the Stafford Act, to eligible individuals of the State of Nevada, under the condition that an eligible individual means recipient of at least $100 per week of various applicable unemployment compensation programs (i.e., unemployment compensation, extended benefits, pandemic unemployment assistance, etc.). Condition: Payments were made to individuals who self-certified as eligible; however, supporting documentation was not requested or only requested after multiple benefit payments had already been made when there were indications to provide a reasonable suspicion of fraud. In addition, the weekly benefit amount was not calculated correctly. Cause: The Nevada Department of Employment, Training, and Rehabilitation (the Department) did not have the staffing levels, information system data analytic controls or manual internal controls in place to respond to the significant surge of unemployment claims as a result of the COVID-19 pandemic. Claims were paid strictly based off claimant certifications. Effect: Payments were made to ineligible claimants or for an incorrect amount. Questioned Costs: Known questioned costs of $47,134 for assistance listing 17.225 and $5,100 for assistance listing 97.050, projected questioned costs are undeterminable. Context/Sampling: A nonstatistical sample of 60 PUA claimants out of approximately 100,000 was selected for testing. The sample of 60 PUA claimants also included 36 claimants who received LWA because of their PUA eligibility. We noted ten claimants who were either ineligible or had a high suspicion of fraud and the Department has subsequently identified as overpayments. Of the ten claimants, we noted four also received LWA. In addition, we noted one claimant?s benefit amount had an unreconciled understatement by $126. Repeat Finding from Prior Year: Yes ? prior year finding 2020-014. Recommendation: We recommend the Department continue to improve and enhance information system internal controls to enhance data analytics as well as manual internal controls to better detect and prevent fraud. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2021-026: U.S. Department of Labor Unemployment Insurance, 17.225 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. Monthly, the Nevada Department of Employment, Training and Rehabilitation (the Department) must submit the ETA 2112 UI Financial Transaction Summary as directed by the Employment & Training Administration Handbook. Condition: Amounts reported on the ETA 2112 were misreported by category (benefit type). Cause: The Department did not have adequate internal controls to ensure benefit payments were appropriately categorized by type. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of four out of 12 monthly reports was selected for testing. Pandemic Unemployment Assistance, Line 23C, was overstated by $1,589,382. Federal Emergency Compensation, Line 23, was understated by $1,588,107, and $1,276 of Extended Unemployment Compensation was not reported for the period ending December 31, 2020 report. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance the internal controls to ensure benefit payments are appropriately categorized by type. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2021-027: U.S. Department of Labor Unemployment Insurance, 17.225 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with governing requirements. As directed by the Employment & Training Administration Handbook, the Nevada Department of Employment, Training and Rehabilitation (the Department) must submit the quarterly ETA UI-3, Quarterly UI Above-Base report within 30 days after the end of the reporting quarter. In addition, the Department must submit the monthly ETA 9055 ? Appeals Case Aging ? Lower and Higher Authority Appeals report within 20 days after the end of the reporting month. Condition: Reports were not submitted timely. Cause: The Department did not have adequate internal controls to ensure due dates for the ETA UI-3 and ETA 9055 were met. Effect: Non-timely information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two out of four quarterly ETA UI-3 reports was selected for testing. The December 31, 2020 quarter end report was reported on February 10, 2021. A nonstatistical sample of three out of 12 monthly ETA 9055 was selected for testing. The May 31, 2021 month end report was reported on June 23, 2021. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance the internal controls to ensure due dates for the ETA UI-3 and ETA 9055 are met. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2021-028: U.S. Department of Labor Unemployment Insurance, 17.225 Special Tests and Provisions ? UI Benefit Payments Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and indepth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook). Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance federal statutes, regulations, and the terms and conditions of the federal award. State of Nevada, Department of Employment, Training and Rehabilitation, Manual of Operations, Chapter 7800, Part V, Section 7862 Supervisor Case Review states that the supervisor review is intended as a final check of information gathered and processed during the audit to ensure horizontal consistency, consistent and correct coding, and ensure all required elements are complete and included. Items/Areas of concern will be addressed to the investigator of the case and resolved prior to closing the case. Condition: Investigations performed by the BAM supervisor or senior investigator are not reviewed by someone other than the investigator. Cause: The Nevada Department of Employment, Training and Rehabilitation (the Department) did not have internal controls to ensure appropriate segregation of duties on all BAM investigations. Effect: Errors may occur in a BAM investigation that are not detected. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 completed BAM cases out of a population of 335 was selected for testing. The investigator and reviewer were the same person for 19 of the cases tested. Repeat Finding from Prior Year: No Recommendation: We recommend the Department implement internal controls to ensure appropriate segregation of duties on all BAM investigations. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2021-029: U.S. Department of Labor Unemployment Insurance, 17.225 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA). Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Department of Employment, Training, and Rehabilitation (the Department) did not have adequate internal controls to ensure total federal expenditures were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures on the SEFA were understated by $1,000,255,411. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure total federal expenditures are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Department of Employment, Training, and Rehabilitation agrees with this finding.

2021-030: U.S. Department of the Treasury Coronavirus Relief Fund, 21.019 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. The Nevada Governor?s Finance Office (the Office) must submit quarterly Financial Progress Reports that contain COVID-19 related costs incurred during the covered period to Treasury OIG. Critical information includes: o The total amount of payments received from Treasury. o The amount of funds received that were expended or obligated for each project or activity. o A detailed list of all projects or activities for which funds were expended or obligated. o Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made that are greater than $50,000. o Aggregated reporting on loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made that are less than $50,000. Aggregate reporting was required for direct payments to individuals, regardless of the amount. Condition: Some expenditures were not reported in the appropriate classification or by vendor. Cause: The Office did not have adequate internal controls to ensure Financial Progress Reports were prepared in accordance with governing requirements. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two Financial Progress Reports from a population of four was selected for testing. Transfers to other agencies within the State were reported as direct payments to the State of Nevada rather than reported by the vendor that those agencies expended funds to. In addition, expenditures to county or city local governments were reported as direct payments rather than either a transfer or grant to another government as required. The cumulative impact is as follows: Reporting Period Ended December 31, 2020 Direct payments > $50,000: Obligations were reported as $416,058,918. However, we identified $412,272,052 in obligations that were reported as a direct payment to other state agencies, counties, or cities. The $412,272,052 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or an aggregate payment to an individual. Expenditures were reported as $187,234,819. However, we identified $183,766,783 in expenditures that were reported as a direct payment to other state agencies, counties, or cities. The $183,766,783 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual. Reporting Period Ended March 31, 2021 Direct payments > $50,000: Obligations were reported as $372,218,344. However, we identified $366,450,228 in obligations that were reported as a direct payment to other state agencies, counties, or cities. The $366,450,228 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual. Expenditures were reported as $21,125,116. However, we identified $20,659,027 in expenditures that were reported as a direct payment to other state agencies, counties, or cities. The $20,659,027 should have been reported by vendor as either a contract, grant, transfer, vendor specific (rather than state agency, county, or city) direct payment, or aggregate payment to an individual. Repeat Finding from Prior Year: No Recommendation: We recommend the Office enhance internal controls to ensure Financial Progress Reports are prepared in accordance with governing requirements. Views of Responsible Officials: The Nevada Governor?s Finance Office agrees with this finding.

2021-031: U.S. Department of the Treasury Coronavirus Relief Fund, 21.019 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.019 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward and the assistance listing number is communicated at the time of disbursement to subrecipients. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Condition: Subawards did not contain all the required information, assistance listing numbers were not communicated at disbursement, an evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and monitoring procedures were not performed. Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies: o Nevada Division of Tourism o Nevada Division of Aging and Disability Services o Nevada Division of Public and Behavioral Health o Office of the Secretary of State o Nevada Department of Agriculture Effect: Noncompliance at the subrecipient level may occur and not be detected by the State. Questioned Costs: None Context/Sampling: A nonstatistical sample of 36 subrecipients out of a population of 180 across all State agencies was selected for testing. A nonstatistical sample of 60 passthrough payments out of a population of approximately 900 was selected for testing. The following errors were noted by agency: Nevada Division of Tourism We tested 11 subrecipients and 13 pass-through payments applicable to the Division of Tourism. A risk assessment was not performed and the subawards were missing required information for 11 subrecipients. In addition, the assistance listing was not communicated at the time of disbursement for all 13 pass-through payments. Nevada Division of Aging and Disability Services We tested one subrecipient applicable to the Division of Aging and Disability Services. A risk assessment was not performed and the subaward was missing the correct assistance listing number for the subrecipient. In addition, monitoring procedures were not performed as necessary to ensure the subaward was used for authorized purposes. Nevada Division of Public and Behavioral Health We tested six subrecipients and ten pass-through payments applicable to the Division of Public and Behavioral Health. A risk assessment was not performed for one subrecipient. In addition, the assistance listing was not communicated at the time of disbursement for five pass-through payments. Moreover, two passthrough payments were originally communicated with a different assistance listing and we were unable to verify that documentation regarding the change in funding source was clearly communicated. Office of the Secretary of State We tested eight subrecipients applicable to the Office of the Secretary of the State. These eight subrecipients were mis-identified as vendors, rather than subrecipients. Therefore, subawards were not executed for the eight subrecipients and the required information was not communicated. Nevada Department of Agriculture We tested nine subrecipients applicable to the Department of Agriculture. A risk assessment was not performed for nine subrecipients. Repeat Finding from Prior Year: No Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The State of Nevada agrees with this finding.

2021-032: U.S. Department of Treasury Emergency Rental Assistance Program, 21.023 Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: 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 is not suspended, debarred, or otherwise excluded from participating in the transaction. This verification may be accomplished by checking the System for Award Management (SAM) Exclusions, collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR 200.214, 2 CFR Part 180). Condition: Suspension and debarment verification procedures were not performed. Cause: The Nevada Housing Division (the Division) did not have internal controls to ensure suspension and debarment verification procedures were performed for subrecipients. Effect: Payments could have been made to subrecipients who were suspended or debarred. Questioned Costs: None Context/Sampling: The entire population of three subrecipient covered transactions was selected for testing. Suspension and debarment verification procedures were not performed for any of the covered transactions. Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure suspension and debarment verification procedures are performed for subrecipients. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2021-033: U.S. Department of Treasury Emergency Rental Assistance Program, 21.023 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Emergency Rental Assistance Program Reporting Guidance published by the U.S. Department of Treasury requires monthly ERA1 Award Reports based on actual number of participant households served in the reporting period and the total amount of funds expended in the reporting period. Condition: Amounts reported on the reports were reported in the wrong period. Cause: The Nevada Housing Division (the Division) did not have adequate internal controls to ensure the monthly ERA1 Award Reports were accurate for the period reported. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The entire population of two monthly reports filed during the year was selected for testing. The April 2021 monthly report was understated by 65 participant households served in the reporting period and understated by $377,241 of funds expended in the reporting period. The May 2021 monthly report was overstated by 65 participant households served in the reporting period and overstated by $377,241 of funds expended in the reporting period. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure the monthly ERA1 Award Reports are accurate for the period reported. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2021-034: U.S. Department of Treasury Emergency Rental Assistance Program, 21.023 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: The Grant Agreements entered into under Section 501 of Division N of the Consolidated Appropriations Act, 2021, Pub. L. No. 116-260 requires the recipient to comply with any reporting obligations established by Treasury, including the Treasury Office of Inspector General, as related to the grant agreement. The Emergency Rental Assistance Program Reporting Guidance published by the U.S. Department of Treasury requires quarterly financial reporting through the Federal Financial Report (SF-425). Condition: Quarterly SF-425 reports were not prepared and submitted. Cause: The Nevada Housing Division (the Division) did not have internal controls to identify the reporting requirements and ensure required reports were submitted. Effect: Information was not reported to the federal awarding agency as required. Questioned Costs: None Context/Sampling: No reports were tested as they were not completed. Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to identify reporting requirements and ensure required reports are submitted. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2021-035: U.S. Department of Treasury Emergency Rental Assistance Program, 21.023 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Condition: Subawards did not contain all the required information, an evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and monitoring procedures were not performed. Cause: The Nevada Housing Division (the Division) did not have internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: The entire population of three subrecipients was selected for testing. Risk assessment and monitoring was not performed for all three subrecipients. In addition, every subaward was missing required information. Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2021-036: U.S. Department of Education Title I Grants to Local Educational Agencies, 84.010 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000 (or $25,000 for federal agencies that have not yet adopted amendments effective November 12, 2020). Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Education (the Department) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA?s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of 8 out of a population of 30 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 8 $1,963,068 Not Reported 8 $1,963,068 Not Timely 8 $1,963,068 Obligation Incorrect 8 $1,963,068 Missing Key Elements 8 $1,963,068 Repeat Finding from Prior Year: No Recommendation: We recommend the Department implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2021-037: U.S. Department of Education Special Education Cluster: Special Education-Grants to States, 84.027 Special Education-Preschool Grants, 84.173 Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award H173A180046 included under assistance listing 84.173. Criteria: A State Educational Agency (SEA) may use not more than 20 percent of the funds it is allowed to retain for state activities under 20 USC 1419(d) for the purposes of administering the Preschool Grants Program. Condition: Administrative expenses exceeded the maximum allowable. Cause: The Nevada Department of Education (the Department) did not have adequate internal controls to ensure administrative expenditures did not exceed the maximum available to spend. Effect: Monies available for other state level activities or amounts available to subgrant to Local Educational Agencies (LEAs) were under-allocated. Questioned Costs: None reported as the amount is less than $25,000. Context/Sampling: We tested all final expenditure totals on the grant that closed during the audit period. The maximum available for administrative expenditures was $117,541 and the actual amount spent was $121,085. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure administrative expenditures do not exceed the maximum available to spend. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2021-038: U.S. Department of Education Education Stabilization Fund, 84.425 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that State Education Agencies submit annual reports over Governor?s Emergency Education Relief (GEER) and Elementary and Secondary School Emergency Relief (ESSER) Grants as follows: Direct recipients of ESSER I grants must submit an annual report (OMB No. 1810-0749) with data for the following categories: ? Overall ESSER I fund grant for State Education Agency (SEA); ? SEA Reserve; ? Mandatory subgrants to Local Education Agency (LEA), Section 18003(c) of the CARES Act and Section 313(c) of the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act; ? Student participation and engagement; and ? Full-time equivalent positions. Direct recipients of GEER grants must submit an annual report (OMB No 1810- 0748) with data for the following categories: ? Types of entities within the state that were awarded GEER funds; ? Funding conditions or requirements on GEER awards for LEAs and IHEs to ensure that the funds were spent on specific purposes or activities; ? Amounts expended and the purposes for which the funds were expended by an LEA; ? For each IHE awarded GEER funds from the state, the amount expended and additional information if GEER funds were used by the IHE to provide financial aid to students at IHE; ? The amount awarded and expended by each education related entity, including: o Which populations of students were or will be served by the entity? o Did the funding awarded to the entity support distance learning and remote education or provide financial support to students? ? FTE positions for LEAs, IHEs, or Educational Entities; and ? The number of K-12 schools that received GEER funds or received services paid for with GEER funds. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance Federal statutes, regulations, and the terms and conditions of the federal award. Condition: Certain obligated amounts to LEAs were reported inaccurately. Certain expenditure purposes or activities, student enrollment, and amounts awarded were not reported. In addition, there was no evidence of review and approval (segregation of duties) between the preparer and reviewer of these reports. Cause: The Nevada Department of Education (the Department) did not have internal controls to identify required information to be reported and ensure accuracy. Effect: Inaccurate or incomplete information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: Two annual reports were required to be filed in the State Fiscal Year, one for GEER and one for ESSER. Both reports were selected for testing. The errors were noted as follows: ESSER 3/13/2020 through 9/30/2020 Report ? The SEA Reserve was not reported. ? Expended amounts were not reported for any applicable purpose. ? Student participation and engagement was not reported. ? Full-time equivalent positions were not reported. ? One of the 21 mandatory subgrant obligations was reported at $814,540, rather than $81,454. ? One of the 21 mandatory subgrant obligations was reported at $76,517 and no underlying support was available for review. GEER 3/13/2020 through 9/30/2020 Report ? Amounts expended and the purposes for which they were expended by an LEA was not reported. ? Expended amounts were not reported for any applicable purpose. ? IHE related information was not reported. ? Full-time equivalent positions were not reported. Repeat Finding from Prior Year: No Recommendation: We recommend the Department implement internal controls to identify required information to be reported and ensure accuracy. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2021-039: U.S. Department of Education Education Stabilization Fund, 84.425 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000 (or $25,000 for federal agencies that have not yet adopted amendments effective November 12, 2020). Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Department of Education (the Department) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA?s website for public information disclosure. Questioned Costs: None Context/Sampling: A nonstatistical sample of six out of a population of 38 applicable subaward obligations was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 6 $7,320,485 Not Reported 6 $7,320,485 Not Timely 6 $7,320,485 Obligation Incorrect 6 $7,320,485 Missing Key Elements 6 $7,320,485 Repeat Finding from Prior Year: No Recommendation: We recommend the Department implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2021-040: U.S. Department of Education Education Stabilization Fund, 84.425 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Condition: An evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and monitoring procedures were not performed in accordance with established policies. Cause: The Nevada Department of Education (the Department) did not have adequate internal controls to ensure policies regarding subrecipient monitoring were followed. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department. Questioned Costs: None Context/Sampling: A nonstatistical sample of 11 out of a population of 55 subrecipients was selected for testing. Risk assessment and monitoring activities were not completed for one of the subrecipients tested. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure policies regarding subrecipient monitoring are followed. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2021-041: U.S. Department of Education Education Stabilization Fund, 84.425 Other Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Department of Education (the Department) did not have adequate internal controls to ensure total federal expenditures and payments to subrecipients were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures and amounts passed through to subrecipients on the SEFA were understated by $1,083,866. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure total federal expenditures and payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2021-042: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), 93.323 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Cause: The Nevada Division of Public and Behavioral Health (the Division) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions. Effect: Contractors may not be aware of required terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 2000 was selected for testing, including 17 contracts subject to Appendix II to Part 200. Ten of the contracts were missing certain applicable provisions. Repeating Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure all contracts under federal awards contain the applicable provisions. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2021-043: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), 93.323 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award 5 NU50CK000560-02-CV included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The terms and conditions of the grant award requires quarterly financial reporting through the Federal Financial Report (SF-425). Condition: Information reported was not supported by the underlying records. Cause: The Nevada Division of Public and Behavioral Health did not have adequate internal controls to ensure SF-425 reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The entire population of four SF-425?s submitted during the audit period was selected for testing. We noted one error on one of the reports where actual expenditures were $784 higher than reported. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure SF-425 reports are accurate. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2021-044: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), 93.323 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award 1 NU50CK000560-01 included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The terms and conditions of the grant award requires Monthly Fiscal Reports based on actual recorded expenditures. Condition: Information reported was not supported by the underlying records. Cause: The Nevada Division of Public and Behavioral Health did not have adequate internal controls to ensure Monthly Fiscal Reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of seven Monthly Fiscal Reports out of a population of 39 was selected for testing. We noted one error on one of the reports where $658 of actual expenditures were mis-reported between ?other expenditures? and ?contractual expenditures?. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure Monthly Fiscal Reports are accurate. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2021-045: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), 93.323 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award 6 NU50CK000560-01-05 included under assistance listing 93.323 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The terms and conditions of the grant award requires Performance Measure Data based on actual recorded results. Condition: Information reported was not supported by the underlying records. Cause: The Nevada Division of Public and Behavioral Health did not have adequate internal controls to ensure Performance Measure Data reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two Performance Measure Data reports out of a population of 12 was selected for testing. We noted one error on one of the reports where the number of new cases that were identified (or known) as contacts in the previous 14 days was understated by three cases. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure Performance Measure Data reports are accurate. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2021-046: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Eligibility Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: As provided by 42 USC 8624(b)(2), assistance may be provided to: o Households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans? benefits or; o Households with incomes which do not exceed the greater of 150% of the State?s established poverty level, or 60% of the State?s median income. Lower income eligibility criteria may be established, but no household may be excluded solely on the basis of income if the household income is less than 110% of the State?s poverty level. The Low-Income Home Energy Assistance State Plan (State Plan) establishes and describes assistance benefit levels, which provides for the calculation of a Fixed Annual Credit (FAC) and ultimately, the amount of assistance provided. Condition: The amount of assistance to provide was not calculated with accurate information. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure income reported in the information system agreed to information provided in the application. Effect: Assistance was provided to a recipient who was not entitled to that amount of assistance. Questioned Costs: None as known and projected costs are less than $25,000. Context/Sampling: A nonstatistical sample of 60 recipients out of a population of approximately 18,600 was selected for testing. We noted an error in the amount of income used in the calculation of benefits for one recipient. The sample totaled $58,291 in benefits paid and the error was $24. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure income reported in the information system agrees to the information provided in the application. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-047: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance federal statutes, regulations, and the terms and conditions of the Federal award. The Low-Income Home Energy Assistance State Plan (State Plan) provides for internal controls related to beneficiary case reviews, in part, as follows: Supervisors are required to complete a set number of case reviews per worker per month to monitor staff performance. Trainees and staff with performance issues are subject to 100% review prior to the posting of benefits. The Program Manager reviews a subset of the review completed by the supervisors to ensure they are adequately identifying and addressing performance issues. Condition: Supervisor case reviews were not performed in accordance with the State Plan. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure beneficiary case review policies were followed. Effect: Inaccurate eligibility or benefit determinations may be established and not detected by the Division. Questioned Costs: None Context/Sampling: We examined a listing of beneficiary case reviews performed for the entire year. A total of 55 reviews were performed out of approximately 650 that were required to be performed in accordance with the State Plan. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure beneficiary case review policies are followed. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-048: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award 2001NVE5C3 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Welfare and Supportive Services (the Division) is required to submit the LIHEAP Carryover and Reallotment Report each year, which indicates the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Condition: The projected unobligated balance (carryover amount) for CARES Act funds did not agree to the underlying actual unobligated balance and there was no underlying documentation or support to support the variance. Cause: The Division did not have adequate internal controls to ensure the projected unobligated balance was adequately documented and supported. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The one annual report submitted during the audit period was selected for testing. The projected unobligated balance was reported as $5,020,854 on May 17, 2021. The actual amount was reported separately and prior to the projected amount as $5,073,444 on January 3, 2021. There was no documentation available to explain why the projected balance was different from the actual balance when the projected balance was reported at a later date. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure the projected unobligated balance is adequately documented and supported. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-049: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Housing Division (the Division) is required to submit the Annual Report on Households Assisted by LIHEAP for the preceding fiscal year of (1) number and income levels of the households assisted for each component and any type of LIHEAP assistance and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.334 provides that records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respective, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Condition: Supporting documentation was not maintained by the Division for amounts reported and the records provided by subrecipients in the absence of the records not maintained by the Division did not support some of the household information reported. Cause: The Division did not have internal controls to ensure the underlying records were maintained and reconciled to the submitted report. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: The one annual report submitted during the audit period was selected for testing. The underlying household statistics were not maintained by the Division and were requested from subrecipients. Records provided by the subrecipients included data for 71 households. A non-statistical sample of 11 households was selected for testing. Upon testing the records provided by the subrecipients, we noted unreconciled variances for the following: o Furnace Repair and Replacement: Line 7j, columns A and E, had a variance of 1 household. o Poverty levels did not agree to the underlying support for three of the households tested. o Non-Operable status did not agree to the underlying support for three of the households tested. Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure the underlying records are maintained and reconciled to the submitted report. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2021-050: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000 (or $25,000 for federal agencies that have not yet adopted amendments effective November 12, 2020). Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Housing Division (the Division) did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA?s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of 4 subawards obligated during the year. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 4 $538,512 Not Reported 4 $538,512 Not Timely 4 $538,512 Obligation Incorrect 4 $538,512 Missing Key Elements 4 $538,512 Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2021-051: U.S. Department of Health and Human Services Low-Income Home Energy Assistance, 93.568 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.568 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: Subawards did not contain all the required information, an evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipients were not monitored to ensure audits required by Uniform Guidance were performed. Cause: The Nevada Housing Division (the Division) did not have internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: A nonstatistical sample of two subrecipients out of a population of four was selected for testing. A risk assessment was not performed and the subawards were missing required information for both subrecipients. In addition, there was no documentation available to demonstrate that the two subrecipients were monitored to ensure Uniform Guidance audits were obtained, if required, or that management decisions were issued, if applicable. Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Housing Division agrees with this finding.

2021-052: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listings 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities ensure every subaward includes certain information at the time of the subaward. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: Subawards did not contain all the required information, an evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed, and subrecipients were not monitored to ensure audits required by Uniform Guidance were performed. Cause: Adequate internal controls were not in place to ensure compliance with subrecipient monitoring requirements for the following agencies: o Nevada Division of Aging and Disability Services o Nevada Division of Welfare and Supportive Services Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: A nonstatistical sample of seven subrecipients out of a population of 21 across three State agencies was selected for testing. The following errors were noted in two of the agencies: Nevada Division of Aging and Disability Services We tested three subrecipients applicable to the Division of Aging and Disability Services. A risk assessment was not performed and the subawards were missing required information for three subrecipients. In addition, there was no documentation available to demonstrate that two subrecipients were monitored to ensure Uniform Guidance audits were obtained, if required, or that management decisions were issued, if applicable. Nevada Division of Welfare and Supportive Services We tested four subrecipients applicable to the Division of Welfare and Supportive Services. A risk assessment was not performed for four subrecipients. Repeat Finding from Prior Year: No Recommendation: We recommend the State agencies listed above enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Division of Aging and Disability Services and the Nevada Division of Welfare and Supportive Services agree with this finding.

2021-053: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, 93.596 Special Tests and Provisions ? Fraud Detection and Repayment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 93.575 and 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: Lead agencies shall recover childcare payments that are the result of fraud. These payments shall be recovered from the party responsible for committing the fraud (45 CFR section 98.60). The Nevada Division of Welfare and Supportive Services (the Division) has policies in place to identify, report, and recover payments resulting from fraud. The Investigations and Recovery Policy Manual provides that overpayments must be calculated by the child-care contractor within 60 working days of receipt of necessary information. Condition: An overpayment calculation exceeded the 60-day requirement as provided in the policy. Cause: The Division did not have adequate internal controls to ensure timely overpayment calculation by a child-care contractor. Effect: Fraudulent payments may not be recovered timely. Questioned Costs: None Context/Sampling: We tested all three overpayment cases from the audit period. For one overpayment case, the completed investigation was communicated on January 15, 2021 and the overpayment recalculation was communicated on April 27, 2021, which was nine working days late. Repeat Finding from Prior Year: Yes ? prior year finding 2020-026. Recommendation: We recommend the Division enhance internal controls to ensure timely overpayment calculation by a child-care contractor. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-054: U.S. Department of Health and Human Services Foster Care ? Title IV-E, 93.658 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the Federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Allocation methods used in cost allocation did not agree to the approved cost allocation plan. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure costs were allocated in accordance with the cost allocation plan. Effect: Costs may be charged to the federal programs that do not agree to the cost allocation plan. Questioned Costs: None Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing. Two allocation methods did not agree to the cost allocation plan for the September 30, 2020 quarter and one of those allocation methods did not agree in the March 31, 2021 quarter. However, the net result was an under-allocation of costs to Foster Care. Repeat Finding from Prior Year: Yes ? prior year finding 2020-027. Recommendation: We recommend the Division enhance internal controls to ensure costs are allocated in accordance with the cost allocation plan. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2021-055: U.S. Department of Health and Human Services Foster Care ? Title IV-E, 93.658 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000 (or $25,000 for federal agencies that have not yet adopted amendments effective November 12, 2020). Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS). Cause: The Nevada Division of Child and Family Services did not have internal controls to ensure subaward information was submitted in accordance with the FFATA. Effect: Subaward obligations were not reported in the FSRS and therefore not included on the FFATA?s website for public information disclosure. Questioned Costs: None Context/Sampling: We tested the entire population of two subawards obligated during the year. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 2 $77,416,578 Not Reported 2 $77,416,578 Not Timely 2 $77,416,578 Obligation Incorrect 2 $77,416,578 Missing Key Elements 2 $77,416,578 Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure subaward information is submitted in accordance with the FFATA. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2021-056: U.S. Department of Health and Human Services Children?s Health Insurance Program (CHIP), 93.767 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 457). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for eligible individuals. Condition: Individuals were deemed eligible but were placed in an incorrect aid category. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure aid categories were accurate. Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of approximately 2,763 total eligibility determinations was selected for testing. Five individuals had the incorrect aid code classified. Repeat Finding from Prior Year: Yes ? prior year finding 2020-030. Recommendation: We recommend the Division enhance internal controls to ensure that aid categories are accurate. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-057: U.S. Department of Health and Human Services Children?s Health Insurance Program (CHIP), 93.767 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Health Care Financing and Policy (the Division) is required to submit Quarterly Children?s Health Insurance Program Statement Expenditures for Title XXI (CMS-21) reports based on actual recorded expenditures (Sections 2105(e) and 2107(b)(1) of Title XXI). Condition: Amounts reported on the CMS-21 were not supported by the underlying accounting information. Cause: The Division did not have adequate internal controls to ensure CMS-21 reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-21 reports out of four was selected for testing. The Division was unable to provide support or reconciliations for variances identified across both reports. The December 31, 2020 CMS-21 report had the following unreconciled variances (Total Computable Column). ? Lines 1A/1C: $27 ? Lines 1B/1D: $24,285 ? Line 9: $27 ? Line 11: $1,528 ? Line 25: $27,803 ? Line 33: $120,071 The March 31, 2021 CMS-21 report had the following unreconciled variances (Total Computable Column). ? Lines 1A/1C: $213 ? Lines 1B/1D: $58,296 ? Line 2: $3,932 ? Line 3: $10,464 ? Line 5: $15,425 ? Line 6: $3,715 ? Line 8: $29,634 ? Line 9: $42,097 ? Line 10: $3,936 ? Line 11: $5,931 ? Line 12: $28,601 ? Line 13: $979 ? Line 14: $1,130 ? Line 15: $654 ? Line 16: $693 ? Line 21: $883 ? Line 25: $14,076 ? Line 33: $27,216 Repeat Finding from Prior Year: Yes ? prior year finding 2020-031. Recommendation: We recommend the Division enhance internal controls to ensure CMS-21 reports are accurate. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2021-058: U.S. Department of Health and Human Services Children?s Health Insurance Program (CHIP), 93.767 Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award 2105NV5021 included under assistance listing 93.767 and grant award 2105NV5MAP included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA). Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Division of Health Care Financing and Policy (the Division) did not have adequate internal controls to ensure total federal expenditures were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures on the SEFA were overstated by $1,117,570 for assistance listing 93.767 and $203,366,654 for assistance listing 93.778. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure total federal expenditures are appropriately reported on the SEFA. Views of Responsible Officials: The Division of Health Care Financing and Policy agrees with this finding.

2021-059: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.334 provides that records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respective, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Uniform Guidance section 200.403 provides that costs must be adequately documented in order to be allowable. Federal participation is available for payments to qualifying hospitals that serve a disproportionate number of low-income patients with special needs. The State plan must specifically define a disproportionate share hospital (DSH) and the method of calculating the rate for these hospitals. Section 1923 of the Social Security Act limits DSH payments on a state-wide basis to annual DSH allotments and on a hospital-specific basis to each qualifying hospital?s uncompensated care costs. Condition: The total DSH payments charged to the program did not agree to the total allotment calculated. In addition, supporting documentation was not provided to verify the accuracy of the hospital-specific calculations. Cause: The Nevada Division of Health Care Financing and Policy (the Division) did not have adequate internal controls to retain proper documentation or reconciliations with respect to DSH payments. Effect: DSH payments may have been unallowable or calculated incorrectly. Questioned Costs: None as the amount charged to the federal program was less than the total allotment calculated. Context/Sampling: The entire allotment of $80,203,483 was selected for testing. Records were provided for total amounts paid of $74,349,873 and the remaining variance was unreconciled. The $80,203,483 allotment included hospital-specific calculations for 23 hospitals (or qualifying providers). Documentation was requested, but not provided by the Division and we were unable to verify the accuracy of the hospital specific calculations. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to retain proper documentation or reconciliations with respect to DSH payments. Views of Responsible Officials: The Division of Health Care Financing and Policy agrees with this finding.

2021-060: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 435). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for individuals whose eligibility determination is based on factors other than Modified Adjusted Gross Income, i.e., Aged, Blind and Disabled (MAABD). Condition: Individuals were deemed eligible but were placed in an incorrect aid category or did not have documentation to support the eligibility determination. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure aid categories were accurate and that case files were complete. Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to. Questioned Costs: Known questioned costs of $1,782, projected questioned costs are undeterminable. Context/Sampling: A nonstatistical sample of 68 out of approximately 14,000 MAABD eligibility determinations was selected for testing. One individual had the incorrect aid code classified, which would have been reimbursable by the federal awarding agency at a higher rate (90%). The estimated impact was approximately $9,800. In addition, an application was not available and could not be reviewed for one individual. Repeat Finding from Prior Year: Yes ? prior year finding 2020-032. Recommendation: We recommend the Division enhance internal controls to ensure that aid categories are accurate and that case files are complete. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2021-061: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Health Care Financing and Policy (the Division) is required to submit Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-64) reports based on actual recorded expenditures (42 CFR 430.30). Condition: Amounts reported on the CMS-64 were not supported by the underlying accounting information. Cause: The Division did not have adequate internal controls to ensure CMS-64 reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-64 reports out of a population of four was selected for testing. The Division was unable to provide support or reconciliations for variances identified across both reports. The December 31, 2020 CMS-64 report had the following unreconciled variances (Total Computable Column): ? Lines 1A-1D: $198,687 ? Line 2A: $198,906 ? Lines 5A/C/D: $110,474 ? Lines 6A/B: $41,055 ? Line 7: $103,173 ? Lines 7A1-7A6: $122,275,190 ? Line 8: $855,088 ? Lines 9A/B: $49,228 ? Line 10: $78,063 ? Line 11: $6,615 ? Line 16: $11,360 ? Lines 17A/B/C1/D: $8,123 ? Lines 18A/A1/C: $3,302,160 ? Line 19A: $3,412 ? Line 24A: $798 ? Line 26: $65,429 ? Line 27: $1,773 ? Line 28: $94,293 ? Line 29: $90,743 ? Line 30: $2,070 ? Line 31: $605 ? Line 32: $1,121 ? Line 38: $9,542 ? Line 40: $115,331 ? Line 49: $98,719 The March 31, 2021 CMS-64 report had the following variances (Total Computable Column): ? Lines 1A-1D: $117,749 ? Lines 5A/C/D: $70,784 ? Line 5B: $770,518 ? Lines 6A/B: $2,239,624 ? Line 7: $47,992,139 ? Line 8: $1,275,776 ? Lines 9A/B: $116 ? Line 16: $10,835 ? Lines 17A/B/C1/D: $724 ? Line 18B1: $724,050 ? Line 19A: $50,886 ? Line 24A: $1,393 ? Line 26: $31,682 ? Line 28: $59 ? Line 29: $336,159 ? Line 31: $353 ? Line 39: $987 ? Line 40: $1,966 ? Line 49: $1,205,513 Repeat Finding from Prior Year: Yes ? prior year finding 2020-033. Recommendation: We recommend the Division enhance internal controls to ensure CMS-64 reports are accurate. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2021-062: U.S. Department of Homeland Security Disaster Grants ? Public Assistance (Presidentially Declared Disasters), 97.036 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients of certain federal awards to report subaward information by the end of the month following the month in which the prime awardee obligates a subgrant award equal to $30,000 (or $25,000 for federal agencies that have not yet adopted amendments effective November 12, 2020). Condition: Required subaward information was not reported in the FFATA Subaward Reporting System (FSRS) timely. Cause: The Nevada Division of Emergency Management (the Division) did not have adequate internal controls to ensure subaward information was submitted timely. Effect: Subaward obligations were not reported in the FSRS in a timely manner and therefore not included on the FFATA?s website for public information disclosure in a timely manner. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subawards from a population of nine was selected for testing. The quantity and subaward obligation errors were noted as follows: Subawards Obligations Total Tested 3 $918,842 Not Reported N/A N/A Not Timely 3 $918,842 Obligation Incorrect N/A N/A Missing Key Elements N/A N/A Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure subaward information is submitted timely. Views of Responsible Officials: The Nevada Division of Emergency Management agrees with this finding.

2021-063: U.S. Department of Homeland Security Presidential Declared Disaster Assistance to Individuals and Households ? Other Needs, 97.050 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 97.050 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and data for performance measures. The Grant Award provides that weekly program status reports be filed, which include: ? The number and dollar amount of applications approved weekly; ? The number of individuals eligible to receive assistance under this award, broke out by programs identified in Section 4(d)(i) of the August 8, 2020 Presidential memorandum; ? The amount of assistance disbursed weekly; and ? The number of appeals received. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.334 provides that records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respective, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Condition: The amounts reported for appeals and pending claims were not supported by the underlying records. In addition, evidence of segregation of duties (internal control review) was not available. Cause: The Nevada Department of Employment, Training, and Rehabilitation (the Department) did not have adequate internal controls to ensure the weekly reports were accurate and data retained. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of eight out of a population of 26 weekly reports was selected for testing. Original data and reconciliations were not retained, and they were recreated for testing. The following is a summary list of unreconciled variances between reported amounts and underlying recreated documentation for seven reports: January 10, 2021 Report Open Appeals (Line 2a): Reported 18,465; Documentation 38,628 New Appeals (Line 2b): Reported 579; Documentation 137 Pending Claims (Line 3a): Reported 122,489; Documentation 54,205 New Pending Claims (Line 3b): Reported 352; Documentation 4 January 31, 2021 Report Open Appeals (Line 2a): Reported 19,216; Documentation 13,174 New Appeals (Line 2b): Reported 543; Documentation 36,475 Pending Claims (Line 3a): Reported 82,006; Documentation 43,489 New Pending Claims (Line 3b): Reported 498; Documentation 0 February 28, 2021 Report Open Appeals (Line 2a): Reported 20,095; Documentation 11,972 New Appeals (Line 2b): Reported 571; Documentation 36,811 Pending Claims (Line 3a): Reported 52,613; Documentation 22,546 April 3, 2021 Report Open Appeals (Line 2a): Reported 65,143; Documentation 12,123 New Appeals (Line 2b): Reported 37; Documentation 65 Pending Claims (Line 3a): Reported 30,185; Documentation 24,000 April 24, 2021 Report Open Appeals (Line 2a): Reported 62,977; Documentation 11,827 New Appeals (Line 2b): Reported 96; Documentation 83 Pending Claims (Line 3a): Reported 26,897; Documentation 17,346 May 15, 2021 Report Open Appeals (Line 2a): Reported 61,022; Documentation 11,502 New Appeals (Line 2b): Reported 68; Documentation 59 Pending Claims (Line 3a): Reported 24,681; Documentation 19,777 June 19, 2021 Report Open Appeals (Line 2a): Reported 57,015; Documentation 10,848 New Appeals (Line 2b): Reported 54; Documentation 36 Pending Claims (Line 3a): Reported 23,568; Documentation 14,979 In addition, three reports did not have evidence of review and approval by an individual other than the preparer. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure the weekly reports are accurate and data is retained. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2020-010: U.S. Department of Agriculture SNAP Cluster: Supplemental Nutrition Assistance Program (SNAP), CFDA 10.551 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program, CFDA 10.561 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 10.561 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure every subaward includes certain information at the time of the subaward. Condition: Subawards did not include certain information required by Uniform Guidance. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure subawards contained all required information. Effect: Subrecipients may not be aware of all requirements or terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of four subawards from a population of 20 subawards was selected for testing. One subaward was missing information as to whether the award was research and development or not. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure subawards contain all required information. Views of Responsible Officials: The Nevada Division of Welfare and Supporting Services agrees with this finding.

2020-011: U.S. Department of Agriculture SNAP Cluster: Supplemental Nutrition Assistance Program (SNAP), CFDA 10.551 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program, CFDA 10.561 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 10.551 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure total federal expenditures were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures on the SEFA were overstated by $28,498,848. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure total federal expenditures and payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2020-012: U.S. Department of Agriculture Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), CFDA 10.557 Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 10.557 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Nonfederal entities may verify that a party is not suspended or debarred by checking the Excluded Parties List System, collecting a certification from the entity, or adding a clause or condition to the covered transaction vehicle (2 CFR 200.214, 2 CFR Part 180). Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Suspension and debarment verification procedures were not always performed prior to entering into covered transactions. Cause: The Nevada Division of Public and Behavioral Health (the Division) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions and to ensure suspension and debarment verification procedures were always performed prior to entering into all covered transactions. Effect: Contractors may not be aware of required terms and conditions and payments could be made to recipients who were suspended or debarred. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of approximately 700 was selected for testing, including 14 contracts subject to Appendix II to Part 200. Eleven of the contracts were missing certain applicable provisions and no suspension and debarment verification procedures were performed for five of the parties that received disbursements. Repeat Finding from Prior Year: Yes - prior year finding 2019-009. Recommendation: We recommend the Division enhance internal controls to ensure all contracts under federal awards contain the applicable provisions and ensure suspension and debarment verification procedures are performed prior to entering into all covered transactions. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2020-013: U.S. Department of Justice Crime Victim Assistance, CFDA 16.575 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 16.575 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. Crime Victim Assistance Program Guidelines require state grantees to submit, within 90 days of making the subaward, Subgrant Award Reports for each subrecipient. Condition: Subgrant Award Reports (SAR) were not filed timely. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure SARs were reported timely. Effect: Late information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of 11 subrecipients out of 56 was selected for testing. Seven SARs were not filed timely, ranging from one to 128 days late. In addition, one SAR was reported in advance of the subaward being signed. Repeat Finding from Prior Year: Yes ? prior year finding 2019-012. Recommendation: We recommend the Division enhance internal controls to ensure SARs are reported timely. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2020-014: U.S. Department of Labor Unemployment Insurance, CFDA 17.225 Eligibility Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation (FPUC) programs were created via the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Covered individuals under PUA were those who were not eligible for regular unemployment compensation and unemployed, partially unemployed, or unable or unavailable to work due to COVID-19. The eligibility criteria was based on self-certification; however, states may request supporting documentation if they have reasonable suspicions of fraud (Q23 of Attachment I to UIPL No 16-20, Change 2). FPUC was provided as supplemental benefits to PUA, regular UI, and other programs. Condition: Payments were made to individuals who self-certified as eligible; however, supporting documentation was not requested or only requested after multiple benefit payments had already been made when there were indications to provide a reasonable suspicion of fraud. Cause: The Nevada Department of Employment, Training, and Rehabilitation (the Department) did not have the staffing levels, information system data analytic controls or manual internal controls in place to respond to the significant surge of unemployment claims as a result of the COVID-19 pandemic. Claims were paid strictly based off claimant certifications. Effect: Payments were made to ineligible claimants. Questioned Costs: Known questioned costs of $94,755, projected questioned costs are undeterminable. Context/Sampling: A nonstatistical sample of 60 PUA claimants out of approximately 1,000 was selected for testing. In our sample of 60, we noted 11 claimants who were either ineligible or had a high suspicion of fraud. Benefits paid through June 30, 2020 for these 11 claimants was $94,755. Repeat Finding from Prior Year: No Recommendation: We recommend the Department work with the federal agencies involved in the unemployment fraud task force to identify and attempt recovery of fraudulent payments. In addition, we further recommend that the Department improve information system internal controls to enhance data analytics as well as manual internal controls to better detect and prevent fraud. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2020-015: U.S. Department of Labor Unemployment Insurance, CFDA 17.225 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Quarterly, the Nevada Department of Employment, Training and Rehabilitation (the Department) must submit the Quarterly Unemployment UI Above-Base Report (UI-3) as directed by the Employment & Training Administration Handbook. Condition: Amounts reported on the UI-3 were not supported by the underlying accounting information and therefore, were not reported in accordance with program requirements. Cause: The Department did not have adequate internal controls to ensure the UI-3 was accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two out of four quarterly reports was selected for testing. Section A, Line 6, was understated by 7.79 and 7.58 staff years for the current quarter worked and current quarter paid, respectively, for the March 31, 2020 UI-3 report. In addition, we were unable to verify the accuracy of the year to date paid column as it was reported less than the current quarter paid, without explanation as to why the year to date would be less than the quarter to date. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance the internal controls to ensure the UI-3 is accurate. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2020-016: U.S. Department of Labor Unemployment Insurance, CFDA 17.225 Special Tests and Provisions ? UI Benefit Payments Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: State Workforce Agencies are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is the quality control system designed to assess the accuracy of UI benefit payments and denied claims. The State?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt and indepth investigations to determine the degree of accuracy in the administration of the program. The requirements are promulgated in the ET Handbook No. 395 (Handbook). The Handbook states that each case file must contain, at a minimum, a copy of all agency documents from the claimant?s original claim file in addition to any documents pertaining to the BAM investigation that were utilized. This includes documentation of the Occupational Code source and a copy of the Department Collection Instrument (DCI) report. Additionally, the Handbook establishes time limits for completion of all cases for the year as follows: Paid Claims ? A minimum of 70% of cases must be completed within 60 days of the week ending date of the batch ? A minimum of 95% of cases must be completed within 90 days of the week ending date of the batch Denied Claims ? A minimum of 60% of cases must be completed within 60 days of the week ending date of the batch ? A minimum of 85% of cases must be completed within 90 days of the week ending date of the batch Condition: BAM investigation files did not include all required documentation. In addition, the time limits for completion were not met. Cause: The Nevada Department of Employment, Training and Rehabilitation (the Department) did not have adequate internal controls to ensure timely BAM review completion and appropriate document retention. Effect: Payments made to ineligible individuals may not be identified. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 completed BAM cases out of a population of 622 was selected for testing. For one case, the entire file was not located. For a second case, the file was missing the required claimant questionnaire. The Department completed 60.86% of paid claim reviews within 60 days and 66.00% of paid claim reviews within 90 days. The Department completed 66.67% of denied monetary claim reviews, 74.55% of denied separation claim reviews, and 71.82% of denied nonseparation claim reviews within 90 days. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure timely BAM review completion and appropriate document retention. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2020-017: U.S. Department of Labor Unemployment Insurance, CFDA 17.225 Special Tests and Provisions ? UI Reemployment Programs: Worker Profiling and Reemployment Services (WPRS) and Reemployment Services and Eligibility Assessments (RESEA) Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 17.225 on the Schedule of Expenditures of Federal Awards. Criteria: The Unemployment Insurance Program Letter No. 07-19 requires the nonfederal entity receive feedback that claimants reported as directed to program staff and participated in required RESEA activities. In addition, prior to the submission of RESEA performance reports, the reports must be reviewed for accuracy by the UI staff member of the RESEA team, in addition to being reviewed by the RESEA program lead (if a different staff member). Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: One claimant file did not contain documentation or forms regarding case status, such as if the claimant attended an appointment with RESEA program staff. In addition, there were no written policies or procedures to provide for the review of the RESEA performance reports by required staff. Cause: The Nevada Department of Employment, Training and Rehabilitation (the Department) did not have adequate internal controls to ensure that all RESEA case notes were maintained in participant files and written policies and procedures to provide for the review of RESEA performance reports are not available. Effect: RESEA program performance may not be properly measured due to inadequate case notes. Internal controls over RESEA performance reports may not be consistently applied. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of 7,299 participants was selected for testing. Feedback was not received for one participant. Available policies and procedures were reviewed, but internal controls regarding the RESEA performance report review were not included in the policies and procedures. Repeat Finding from Prior Year: No. Recommendation: We recommend the Department enhance the internal controls to ensure that all RESEA case notes are maintained in participant files and the written policies and procedures are updated to provide for the review of RESEA performance reports by required staff. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2020-018: U.S. Department of the Treasury Coronavirus Relief Fund, CFDA 21.019 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 21.019 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Governor?s Finance Office, Budget Division (the Division) and the Controller?s Office (Office) did not have adequate internal controls for communication of reconciling items to ensure total federal expenditures and payments to subrecipients were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures and amounts passed through to subrecipients on the SEFA were overstated by $11,637,020. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Division and Office enhance internal controls for communication of reconciling items to ensure total federal expenditures and payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Governor?s Finance Office, Budget Division and the Controller?s Office agree with this finding.

2020-019: U.S. Department of Education Title I Grants to Local Educational Agencies, CFDA 84.010 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Potentially affects all grant awards included under CFDA 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. Each year, a SEA must submit its average state per pupil expenditure (SPPE) data to the National Center for Education Statistics through allowable methods in 20 USC 7801. Condition: Average daily attendance information on the State Per Pupil Expenditure Report was inaccurate. Cause: The Nevada Department of Education (the Department) did not have adequate internal controls to ensure average daily attendance was accurate on the State Per Pupil Expenditure Report. Effect: Inaccurate information was reported to the National Center for Education Statistics. Questioned Costs: None Context/Sampling: The State Per Pupil Expenditure Report is an annual report and the report submitted during the year (school year 2018-2019) was selected for testing. We noted average daily attendance was inaccurate for four school districts. The average state per pupil expenditures originally reported was $9,217. After correcting the information for the four school districts, the average state per pupil expenditures was $9,176. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure average daily attendance is accurate on the State Per Pupil Expenditure Report. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2020-020: U.S. Department of Education Title I Grants to Local Educational Agencies, CFDA 84.010 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that: A. Pass-through entities ensure that a subaward is executed when federal funding is passed through to a subrecipient and that every subaward includes certain information at the time of the subaward. B. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Condition: A. Funding was provided to a subrecipient without an executed subaward. B. An evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and/or not utilized to determine the monitoring plan. In addition, programmatic monitoring pursuant to subawards was not performed or not documented. Cause: The Nevada Department of Education (the Department) and the Nevada State Public Charter School Authority (the Authority) did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department or the Authority. Questioned Costs: Undetermined Context/Sampling: Testing was performed over each requirement for the Department and the Authority. The applicable populations were as follows: 34 subrecipients in total; 20 applicable to the Department and 14 applicable to the Authority. A. A nonstatistical sample of seven subawards (four for the Department and three for the Authority) was selected for testing. One Authority subrecipient received funds without an executed subaward. B. A nonstatistical sample of seven subrecipients (four for the Department and three for the Authority) was selected for testing. The Department monitored the four subrecipients selected but based on policies and procedures that did not include consideration of risk assessment (even though a risk assessment was performed). The Authority did not perform a risk-based risk assessment or document its monitoring of programmatic performance for the three subrecipients selected. Repeat Finding from Prior Year: Yes ? prior year finding 2019-022. Recommendation: We recommend the Department and the Authority enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Department of Education and the Nevada State Public Charter School Authority agree with this finding.

2020-021: U.S. Department of Education Title I Grants to Local Educational Agencies, CFDA 84.010 Special Tests and Provisions ? Assessment System Security Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 84.010. Criteria: The OMB Compliance Supplement requires state education agencies (SEAs), in consultation with local education agencies (LEAs), to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment systems, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures (20 USC 6311(b)(2)(B)(iii)). The State of Nevada?s Assessment Security System Procedures require that LEA?s, including charter schools, submit Test Security Plans by September 1 of each year to the State Board of Education and the Legislative Committee on Education. Condition: Test Security Plans were not reviewed to ensure implementation of an assessment system was appropriate. Cause: The Nevada Department of Education (the Department) did not have internal controls to provide for the review of Test Security Plans. Effect: The Department may not know if LEA?s are compliant with the Assessment Security System Procedures. Questioned Costs: None Context/Sampling: A nonstatistical sample of ten Test Security Plans out of a population of 34 was selected for testing. The Department was unable to provide support for all ten that the plans had been reviewed to ensure implementation of an assessment system was appropriate. Repeat Finding from Prior Year: Yes ? prior year finding 2019-023. Recommendation: We recommend the Department implement internal controls to provide for the review of Test Security Plans. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2020-022: U.S. Department of Education Special Education Cluster: Special Education-Grants to States, CFDA 84.027 Special Education-Preschool Grants, CFDA 84.173 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 84.027 and 84.173 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that: Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Condition: An evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and/or not utilized to determine the monitoring plan. In addition, programmatic monitoring pursuant to subawards was not performed or not documented. Cause: The Nevada Department of Education (the Department) and the Nevada State Public Charter School Authority (the Authority) did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department or the Authority. Questioned Costs: Undetermined Context/Sampling: Testing was performed over each requirement for the Department and the Authority. The applicable populations were as follows: 52 subrecipients in total; 24 applicable to the Department and 28 applicable to the Authority. A nonstatistical sample of 11 subrecipients was selected for testing (six for the Department and five for the Authority). The Department monitored the six subrecipients selected but based on policies and procedures that did not include consideration of risk assessment (even though a risk assessment was performed). The Authority did not perform a risk assessment or document its monitoring of programmatic performance for the five subrecipients selected. Repeat Finding from Prior Year: Yes ? prior year finding 2019-026. Recommendation: We recommend the Department and the Authority enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Department of Education and the Nevada State Public Charter School Authority agree with this finding.

2020-023: U.S. Department of Agriculture SNAP Cluster: Supplemental Nutrition Assistance Program (SNAP), CFDA 10.551 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program, CFDA 10.561 U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, CFDA 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, CFDA 93.596 Child Support Enforcement, CFDA 93.563 Temporary Assistance for Needy Families, CFDA 93.558 Medicaid Cluster: State Medicaid Fraud Control Units, CFDA 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, CFDA 93.777 Medical Assistance Program (Medicaid; Title XIX), CFDA 93.778 Children?s Health Insurance Program (CHIP), CFDA 93.767 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 10.561, 93.575, 93.596, 93.563, 93.558, 93.778, and 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, subpart E, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Allocation statistics used in cost allocation did not agree to the underlying support. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure review of allocations was performed for accuracy. Effect: Administrative costs claimed were inaccurate. Questioned Costs: Costs were overclaimed or (underclaimed) for each program as follows: SNAP Cluster: ($19,586) CCDF Cluster: $2,141 Child Support Enforcement: $2,579 TANF: $15,964 Medicaid Cluster: ($10,906) CHIP: ($1,599) Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing. Allocations based on full-time equivalents (FTE?s) were in error. If a position turned over during the year, the departing employee and the new hire were both counted, thus duplicating the FTE count. In addition, a time tracking statistic did not agree to the underlying support. Repeat Finding from Prior Year: Yes ? prior year finding 2019-029. Recommendation: We recommend the Division enhance internal controls to ensure review of allocation statistics is performed for accuracy. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2020-024: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF), CFDA 93.558 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award 1801NVTANF2018G996115 included under CFDA 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Welfare and Supportive Services (the Division) is required to submit a quarterly TANF Financial Report (ACF-196R) based on actual recorded expenditures (45 CFR 265.3). Condition: Amounts reported on the ACF-196R were not supported by the underlying accounting information. Cause: The Division did not have adequate internal controls to ensure ACF-196R reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of three ACF-196R reports out of eight was selected for testing. The September 30, 2019 report for the 1801NVTANF2018G99115 grant award had the following variances: ? Line 6a was overstated by $9,610 ? Line 9a was understated by $900 ? Line 9b was overstated by $900 ? Line 9c was overstated by $1,887,961 ? Line 10 was understated by $1,650,609 ? Line 15 was understated by $9,173 ? Line 22a was understated by $237,790 Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure ACF-196R reports are accurate. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2020-025: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF), CFDA 93.558 Other Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure total payments to subrecipients were appropriately reported on the SEFA. Effect: Prior to correction, amounts passed through to subrecipients on the SEFA were overstated by approximately $1.3 million. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure total payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2020-026: U.S. Department of Health and Human Services CCDF Cluster: Child Care and Development Block Grant, CFDA 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund, CFDA 93.596 Special Tests and Provisions ? Fraud Detection and Repayment Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.575 and CFDA 93.596 on the Schedule of Expenditures of Federal Awards. Criteria: Lead agencies shall recover child care payments that are the result of fraud. These payments shall be recovered from the party responsible for committing the fraud (45 CFR section 98.60). The Nevada Division of Welfare and Supportive Services (the Division) has policies in place to identify, report, and recover payments resulting from fraud. As part of these policies, repayment agreements should be entered into within 60 days of the investigation being completed. Condition: An investigation was completed and there was no documentation available for the determination of overpayment amount or repayment agreement. Cause: The Division did not have adequate internal controls to ensure timely corrective action or retain appropriate documentation to conclude a case. Effect: Fraudulent payments may not be recovered. Questioned Costs: None Context/Sampling: We selected a nonstatistical sample of two overpayment cases from a population of five. We noted that the amount of overpayment was not determined, and no repayment agreement had been entered into or other conclusion documented for one case that was completed in September 2019. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure timely corrective action or retain appropriate documentation to conclude a case. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2020-027: U.S. Department of Health and Human Services Foster Care ? Title IV-E, CFDA 93.658 Adoption Assistance, CFDA 93.659 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.658 and CFDA 93.659 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, subpart E, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the Federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Allocation methods used in cost allocation did not agree to the approved cost allocation plan. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure costs were allocated in accordance with the cost allocation plan. Effect: Costs may be charged to the federal programs that do not agree to the cost allocation plan. Questioned Costs: None. Context/Sampling: A nonstatistical sample of two out of four quarters was selected for testing. Two allocation methods did not agree to the cost allocation plan for one quarter and one of those allocation methods did not agree in the subsequent quarter. However, the net result was an under-allocation of costs to Foster Care and Adoption Assistance. Repeat Finding from Prior Year: Yes ? prior year finding 2019-034. Recommendation: We recommend the Division enhance internal controls to ensure costs are allocated in accordance with the cost allocation plan. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2020-028: U.S. Department of Health and Human Services Foster Care ? Title IV-E, CFDA 93.658 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. Quarterly, the Nevada Division of Child and Family Services (the Division) must submit the Title IV-E Programs Quarterly Financial Report (CB-496) as described in 45 CFR parts 1355 and 1356. Condition: Amounts reported on the CB-496 were not supported by the underlying accounting information and therefore, were not reported in accordance with program requirements. Cause: The Division did not have adequate internal controls to ensure the CB-496 was reported accurately. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CB-496 reports out of four was selected for testing. The following variance was noted on the March 31, 2020 CB-496 report: ? Line 49a ?Actual Count Current was overstated by 45 children Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure the CB-496 is reported accurately. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2020-029: U.S. Department of Health and Human Services Foster Care ? Title IV-E, CFDA 93.658 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that: Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: An evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and monitoring procedures were not performed in accordance with established policies. In addition, procedures were not performed to review audit reports for audit findings and issue management decisions, as applicable. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure policies regarding subrecipient monitoring were followed. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: Undetermined Context/Sampling: The entire population of two subrecipients was tested. The risk assessment and monitoring activities were not completed for one of the two subrecipients. In addition, a management decision was required for one subrecipient and was not issued. Repeat Finding from Prior Year: No. Recommendation: We recommend the Division implement internal controls to ensure policies regarding subrecipient monitoring are followed. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2020-030: U.S. Department of Health and Human Services Children?s Health Insurance Program (CHIP), CFDA 93.767 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 457). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for eligible individuals. Condition: Individuals were deemed eligible but were placed in an incorrect aid category. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure aid categories were accurate. Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of approximately 8,300 total eligibility determinations was selected for testing. Four individuals had the incorrect aid code classified. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure that aid categories are accurate. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2020-031: U.S. Department of Health and Human Services Children?s Health Insurance Program (CHIP), CFDA 93.767 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Health Care Financing and Policy (the Division) is required to submit Quarterly Children?s Health Insurance Program Statement Expenditures for Title XXI (CMS-21) reports based on actual recorded expenditures (Sections 2105(e) and 2107(b)(1) of Title XXI). Condition: Amounts reported on the CMS-21 were not supported by the underlying accounting information. Cause: The Division did not have adequate internal controls to ensure CMS-21 reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-21 reports out of four was selected for testing. The March 31, 2020 CMS-21 report had the following variances (Total Computable Column). ? Line 2 was overstated by $450 ? Line 8 was overstated by $107,436 ? Line 9 was overstated by $700,000 Repeat Finding from Prior Year: Yes ? prior year finding 2019-038. Recommendation: We recommend the Division enhance internal controls to ensure CMS-21 reports are accurate. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2020-032: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, CFDA 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, CFDA 93.777 Medical Assistance Program (Medicaid; Title XIX), CFDA 93.778 Eligibility Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: States are required to determine eligibility in accordance with the eligibility requirements defined in the approved State plan (42 CFR 435). The State plan describes certain aid categories, including the eligibility criteria and potential benefits allowed under the aid categories for individuals whose eligibility determination is based on factors other than Modified Adjusted Gross Income, i.e. Aged, Blind and Disabled (MAABD). Condition: Individuals were deemed eligible but were placed in an incorrect aid category or did not have documentation to support the eligibility determination. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure aid categories were accurate and that case files were complete. Effect: Individuals may receive benefits that they are not entitled to or not receive benefits for which they are entitled to. Questioned Costs: Known questioned costs of $442, projected questioned costs are undeterminable. Context/Sampling: A nonstatistical sample of 68 out of approximately 22,000 MAABD eligibility determinations was selected for testing. Two individuals had the incorrect aid code classified. In addition, an application was not available and could not be reviewed for one individual. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure that aid categories are accurate and that case files are complete. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2020-033: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, CFDA 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, CFDA 93.777 Medical Assistance Program (Medicaid; Title XIX), CFDA 93.778 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.775, CFDA 93.777, and CFDA 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information, and are presented in accordance with program requirements. The Nevada Division of Health Care Financing and Policy (the Division) is required to submit Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-64) reports based on actual recorded expenditures (42 CFR 430.30). Condition: Amounts reported on the CMS-64 were not supported by the underlying accounting information. Cause: The Division did not have adequate internal controls to ensure CMS-64 reports were accurate. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-64 reports out of four was selected for testing. The December 31, 2019 CMS-64 report, Line 19A was understated by $64,346 (Total Computable Column). The March 31, 2020 CMS-64 report had the following variances (Total Computable Column): ? Line 8 was understated by $539 ? Line 10 was understated by $1,863 ? Line 11 was understated by $686 ? Line 16 was understated $3,041 ? Line 19A was understated by $3,299,781 ? Line 29 was understated by $235 ? Line 37 was understated by $18,390 ? Line 38 was understated by $762 ? Line 40 was understated by $324 ? Line 49 was understated by $2,125 Repeat Finding from Prior Year: No. Recommendation: We recommend the Division enhance internal controls to ensure CMS-64 reports are accurate. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2020-034: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, CFDA 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, CFDA 93.777 Medical Assistance Program (Medicaid; Title XIX), CFDA 93.778 Special Tests and Provisions ? ADP Risk Analysis and System Security Review Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 93.775, CFDA 93.777, and CFDA 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: State Medicaid Agencies (SMA) are required to establish and maintain a program for conducting periodic risk analyses to ensure that appropriate and cost-effective safeguards are incorporated into new and existing systems. This includes performing risk analyses whenever significant system changes occur. SMAs shall review the ADP system security installations involved in the administration of HHS programs on a biennial basis. At a minimum, the reviews shall include an evaluation of physical and data security operating procedures, and personnel practices (45 CFR 95.621). Condition: No review over the ADP system was completed. Cause: The Nevada Division of Health Care Financing and Policy (the Division) did not have internal controls to ensure an ADP review was completed when required. Effect: Security of the ADP system may be insufficient. Questioned Costs: None Context/Sampling: No sampling was used. The Division implemented major system changes in February 2019 and the previous ADP system review was completed in June 2017. Repeat Finding from Prior Year: Yes ? prior year finding 2019-040. Recommendation: We recommend the Division implement internal controls to ensure an ADP review is completed when required. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2019-008: U.S. Department of Agriculture Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), CFDA 10.557 Cash Management Material Weakness in Internal Control over Compliance Grant Award Number:Affects grant awards 201717W100647, 201818W100647, and 201919W100647 included under CFDA 10.557 on the Schedule of Expenditures of Federal Awards. Criteria:The OMB Compliance Supplement states that to the extent available, program income, rebates, refunds, and other income and receipts should be disbursed before requesting additional federal cash draws. Condition: Rebates were not disbursed prior to requesting funds. Cause: The Nevada Division of Public and Behavioral Health (the Division) did not have adequate internal controls to ensure rebates were disbursed prior to requesting funds. Effect: Incorrect amounts of cash may be received, and an interest liability could result. Questioned Costs: None Context/Sampling: No sampling was used; the entire population of 134 federal cash draws was reviewed. Of this population, seven cash draws were requested prior to the disbursement of rebates. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure rebates are disbursed before requesting funds. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2019-009: U.S. Department of Agriculture Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), CFDA 10.557 Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 10.557 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. The OMB Compliance Supplement states that non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Non-federal entities may verify that a party is not suspended or debarred by checking the Excluded Parties List System, collecting a certification from the entity, or adding a clause or condition to the covered transaction vehicle. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Suspension and debarment verification procedures were not always performed prior to entering into covered transactions. Cause: The Nevada Division of Public and Behavioral Health (the Division) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions and to ensure suspension and debarment verification procedures were always performed prior to entering into all covered transactions. Effect: Contractors may not be aware of required terms and conditions and payments could be made to recipients who were suspended or debarred. Questioned Costs: None Context/Sampling: A nonstatistical sample of 63 procurement transactions out of approximately 3,200 was selected for testing, including 17 contracts subject to Appendix II to Part 200. Thirteen of the contracts were missing certain applicable provisions and no suspension and debarment verification procedures were performed for four of the parties that received disbursements. Repeat Finding from Prior Year: Yes - prior year finding 2018-003. Recommendation: We recommend the Division enhance internal controls to ensure all contracts under federal awards contain the applicable provisions and ensure suspension and debarment verification procedures are performed prior to entering into all covered transactions. Views of Responsible Officials: The Nevada Division of Public and Behavioral Health agrees with this finding.

2019-010: U.S. Department of the Interior Fish and Wildlife Cluster: Sport Fish Restoration Program, CFDA 15.605 Wildlife Restoration and Basic Hunter Education, CFDA 15.611 Hunter Education and Safety Program, CFDA 15.626 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 15.605 and 15.611 included on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Department of Wildlife (the Department) did not have adequate internal controls to ensure total federal expenditures and payments to subrecipients were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures on the SEFA were understated by $3,489,536 and pass-through payments were understated by $2,518,379. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure total federal expenditures and payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Department of Wildlife agrees with this finding.

2019-011: U.S. Department of Justice Crime Victim Assistance, CFDA 16.575 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 16.575 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions. Effect: Contractors may not be aware of required terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 procurement transactions out of 487 was selected for testing, including five contracts subject to Appendix II to Part 200. One of the contracts were missing certain applicable provisions. Repeat Finding from Prior Year: Yes ? prior year finding 2018-010. Recommendation: We recommend the Division enhance internal controls to ensure all contracts under federal awards contain the applicable provisions. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-012: U.S. Department of Justice Crime Victim Assistance, CFDA 16.575 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 16.575 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Crime Victim Assistance Program Guidelines require state grantees to submit, within 90 days of making the subaward, Subgrant Award Reports for each subrecipient. Condition: Subgrant Award Reports (SAR) were not filed timely. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure SARs were reported timely. Effect: Late information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of 14 subrecipients out of 55 was selected for testing. 13 SARs were not filed timely, ranging from one to 149 days late. In addition, one SAR was reported in advance of the subaward being signed. Repeat Finding from Prior Year: Yes ? prior year finding 2018-012. Recommendation: We recommend the Division enhance internal controls to ensure SARs are reported timely. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-013: U.S. Department of Justice Crime Victim Assistance, CFDA 16.575 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 16.575 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward. Condition: Subawards did not include certain information required by Uniform Guidance. Cause: The Division of Child and Family Services (the Division) did not have adequate internal controls to ensure subawards contained all required information. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: A nonstatistical sample of 14 subawards out of a population of 55 was selected for testing. None of the subawards contained all the required information. Repeat Finding from Prior Year: Yes ? prior year finding 2018-014. Recommendation: We recommend the Division enhance internal controls to ensure subawards contain all required information. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-014: U.S. Department of Justice Crime Victim Assistance, CFDA 16.575 Special Tests and Provisions Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award #2015-VA-GX-0024 included under CFDA 16.575 on the Schedule of Expenditures of Federal Awards. Criteria: The Final Program Guidelines for the Crime Victim Assistance grant indicates that priority funding shall be given to victims of sexual assault, domestic abuse, child abuse, and previous underserved populations (10% to each area). Condition: The underserved population did not meet the 10% funding requirement. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to track funding allocations to ensure the priority funding requirements were met. Effect: The underserved population did not receive the minimum expenditure amounts. Questioned Costs: None Context/Sampling: No sampling was used. We tested the expenditures included under the grant award and noted that $1,416,811 were noted as spent on the underserved population. The minimum amount to spend was $1,616,876, which indicates a deficiency of $200,065. Repeat Finding from Prior Year: Yes ? prior year finding 2018-015. Recommendation: We recommend the Division enhance internal controls to track funding allocations to ensure the priority funding requirements are met. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-015: U.S. Department of Labor WIOA Cluster: WIA/WIOA Adult Programs, CFDA 17.258 WIA/WIOA Youth Activities, CFDA 17.259 WIA/WIOA Dislocated Worker Formula Grants, CFDA 17.278 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Condition: Certain data elements in the WIOA Participant Individual Record Layout Report (PIRL) were reported inaccurately. Cause: The Nevada Department of Employment, Training and Rehabilitation (the Department) did not have adequate internal controls to ensure that all information in the PIRL was accurate or supported by underlying information. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of 9,502 participant records was selected for testing. o Two of 60 records had an error regarding Data Element 1800 (Credential Attainment Rate) where the incorrect credential was reported. Specifically, while the participant obtained a ?Certificate?, it was reported that the participant obtained a ?Certification?. o One of 60 records had an amount reported under Data Element 1704 (Median Earnings, Median Wages 2nd Quarter After Exit), which we were unable to examine discernible evidence that supported the wages reported. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure that all information in the PIRL is accurate and supported by underlying information. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2019-016: U.S. Department of Labor WIOA Cluster: WIA/WIOA Adult Programs, CFDA 17.258 WIA/WIOA Youth Activities, CFDA 17.259 WIA/WIOA Dislocated Worker Formula Grants, CFDA 17.278 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 17.258, 17.259, and 17.278 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award?s CFDA number is identified to the subrecipient at the time of disbursement. Condition: Subawards did not include certain information required by Uniform Guidance. In addition, the CFDA number was not identified at the time of disbursement. Cause: The Department of Employment, Training and Rehabilitation (the Department) did not have internal controls in place to ensure subawards contained all required information and that the CFDA number was communicated on each subrecipient payment. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subawards out of a population of 14 was selected for testing. None of the subawards contained all the required information. In addition, a nonstatistical sample of 60 out of a population of 599 payments to subrecipients was selected for testing. The Department did not communicate the award?s CFDA number at the time of disbursement for 39 of the 60 payments. Repeat Finding from Prior Year: Yes ? prior year finding 2018-019. Recommendation: We recommend the Department enhance internal controls to ensure subawards contain all required information and that the CFDA number is communicated on each subrecipient payment. Views of Responsible Officials: The Department of Employment, Training and Rehabilitation agrees with this finding.

2019-017: U.S. Department of Labor WIOA Cluster: WIA/WIOA Adult Programs, CFDA 17.258 WIA/WIOA Youth Activities, CFDA 17.259 WIA/WIOA Dislocated Worker Formula Grants, CFDA 17.278 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 17.259 and CFDA 17.278 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Payments to subrecipients are required to be reported on the SEFA when incurred (cash basis of accounting). Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Department of Employment, Training and Rehabilitation (the Department) did not have adequate internal controls to ensure total federal expenditures and payments to subrecipients were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures and payments to subrecipients on the SEFA for CFDA 17.259 were understated by $674,361 and $666,753, respectively. In addition, the total federal expenditures and payments to subrecipients on the SEFA for CFDA 17.278 were understated by $2,879,297 and $1,625,139, respectively. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure total federal expenditures and payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2019-018: U.S. Department of Veterans Affairs Grants to States for Construction of State Home Facilities, CFDA 64.005 Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 64.005 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Accurate record retention and reconciliation of expenditures are key components of effective internal controls. Condition: The Department of Veterans Services (the Department) did not maintain adequate records and reconciliations to facilitate effective monitoring and tracking of allowable costs. Cause: The Department did not have adequate internal controls to monitor total federal expenditures, including approved pre-award costs. Effect: $10,115,056 in costs were not billed to the federal awarding agency timely. Questioned Costs: None Context/Sampling: No sampling was used. We examined the total unbilled costs and noted approved pre-award project costs from fiscal years 2014-2018 as well costs in fiscal year 2019 that were not reconciled or billed. The costs from fiscal years 2014-2018 accounted for approximately 85% of the unbilled amounts. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to monitor total federal expenditures, including approved pre-award costs. Views of Responsible Officials: The Nevada Department of Veterans Services agrees with this finding.

2019-019: U.S. Department of Veterans Affairs Grants to States for Construction of State Home Facilities, CFDA 64.005 Cash Management and Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 64.005 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Adequate segregation of duties is a key component of effective internal controls. Condition: While no instances of noncompliance were noted, there was no discernible evidence of appropriate segregation of duties in preparation of reimbursement requests (SF-271 reports). Cause: The Nevada Department of Veterans Services (the Department) did not have adequate internal controls to evidence appropriate segregation of duties. Effect: Inaccurate information may be reported to the federal awarding agency. Questioned Costs: None Context/Sampling: No sampling was used, we examined the entire population of four SF-271 reports. None of the reports had evidence of segregation of duties. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to evidence appropriate segregation of duties. Views of Responsible Officials: The Nevada Department of Veterans Services agrees with this finding.

2019-020: U.S. Department of Veterans Affairs Grants to States for Construction of State Home Facilities, CFDA 64.005 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 64.005 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Cause: The Nevada Department of Veterans Services (the Department) did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions. Effect: Contractors may not be aware of required terms and conditions. Questioned Costs: None Context/Sampling: A nonstatistical sample of 26 procurement transactions out of 148 was selected for testing, including ten contracts subject to Appendix II to Part 200. Six of the ten contracts were missing certain applicable provisions. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure all contracts under federal awards contain the applicable provisions. Views of Responsible Officials: The Nevada Department of Veterans Services agrees with this finding.

2019-021: U.S. Department of Veterans Affairs Grants to States for Construction of State Home Facilities, CFDA 64.005 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 64.005 included on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing total federal expenditures for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Department of Veterans Services (the Department) did not have adequate internal controls to ensure total federal expenditures were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures on the SEFA were understated by $10,115,056. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure total federal expenditures are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Department of Veterans Services agrees with this finding.

2019-022: U.S. Department of Education Title I Grants to Local Educational Agencies, CFDA 84.010 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that: A. Pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award?s CFDA number is identified to the subrecipient at the time of disbursement. B. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. C. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: A. Subawards did not include certain information required by Uniform Guidance. In addition, the award?s CFDA number was not identified to the subrecipient at the time of disbursement. B. An evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and/or not utilized to determine the monitoring plan. In addition, programmatic monitoring for performance pursuant to subawards was incomplete. C. Procedures were not performed to verify that subrecipients were audited (or not required to be audited) as required by Uniform Guidance, review audit reports for audit findings, issue management decisions, as applicable, and ensure the subrecipient took timely corrective action on all audit findings, as applicable. Cause: The Nevada Department of Education (the Department) and the Nevada State Public Charter School Authority (the Authority) did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department. Questioned Costs: Undetermined Context/Sampling: Testing was performed over each requirement for the Department and the Authority. The applicable populations were as follows: 28 subrecipients in total; 20 applicable to the Department and 8 applicable to the Authority. Total payments made to subrecipients were 501; 222 applicable to the Department and 279 applicable to the Authority. A. A nonstatistical sample of six subawards was selected for testing. All five subawards from the Department and the one from the Authority were missing information required by Uniform Guidance. A nonstatistical sample of 64 payments to subrecipients was selected for testing. Of these 64 payments selected, 48 payments were made by the Department and 16 were made by the Authority. The Department did not communicate the award?s CFDA number at the time of disbursement in 18 of the payments. B. A nonstatistical sample of six subrecipients was selected for testing. The Department monitored the five subrecipients selected but based on policies and procedures that did not include consideration of risk assessment (even though a risk assessment was performed). The Authority did not perform a risk assessment or monitor programmatic performance for the one subrecipient selected. C. A nonstatistical sample of six subrecipients was selected for testing. The Department did not verify an audit was performed (or not required to be performed) for one of five subrecipients tested. The Authority received an audit report for the one subrecipient tested. However, there was no evidence that the Authority had reviewed the audit report. Repeat Finding from Prior Year: Yes ? parts A and B were prior year finding 2018-022. Recommendation: We recommend the Department and the Authority enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Department of Education and the Nevada State Public Charter School Authority agrees with this finding.

2019-023: U.S. Department of Education Title I Grants to Local Educational Agencies, CFDA 84.010 Special Tests and Provisions ? Assessment System Security Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 84.010. Criteria: The OMB Compliance Supplement requires state education agencies (SEAs), in consultation with local education agencies (LEAs), to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment systems, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures. The State of Nevada?s Assessment Security System Procedures require that LEA?s submit District Test Security Plans by September 1 of each year to the State Board of Education and the Legislative Committee on Education. Condition: District Test Security Plans were either not submitted or not maintained. Cause: The Nevada Department of Education (the Department) did not have internal controls to ensure LEA?s adhered to the Assessment Security System Procedures. Effect: The Department may not know if LEA?s are compliant with the Assessment Security System Procedures. Questioned Costs: None Context/Sampling: A nonstatistical sample of four LEA District Test Security Plans out of a population of 28 was selected for testing. The Department was unable to provide support that the plans had been received for three of the LEA?s. Repeat Finding from Prior Year: No Recommendation: We recommend the Department implement internal controls to ensure LEA?s adhere to the Assessment Security System Procedures. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2019-024: U.S. Department of Education Special Education Cluster: Special Education- Grants to States, CFDA 84.027 Special Education- Preschool Grants, CFDA 84.173 Earmarking Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award #H027A160043 included under CFDA 84.027 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement indicates that each state may reserve for each fiscal year, not more than the maximum amount the State was eligible to reserve for State administration under 20 USC 1411 for FY 2004, or $800,000 (adjusted for inflation in accordance with 20 USC 1411(e)(1)(B)), whichever is greater. Condition: Administration costs exceeded the maximum reserve. Cause: The Nevada Department of Education (the Department) did not have adequate internal controls to ensure administrative dollars were not claimed in excess of the maximum reserve. Effect: Unallowable administrative dollars were claimed. Questioned Costs: Less than $25,000. Context/Sampling: No sampling was used. We examined the total expenditure population under the grant award. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure administrative dollars are not claimed in excess of the maximum reserve. Views of Responsible Officials: The Nevada Department of Education agrees with this finding.

2019-025: U.S. Department of Education Special Education Cluster: Special Education- Grants to States, CFDA 84.027 Special Education- Preschool Grants, CFDA 84.173 Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number:Affects all grant awards included under CFDA 84.027 and 84.173 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement states that non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Non-federal entities may verify that a party is not suspended or debarred by checking the Excluded Parties List System, collecting a certification from the entity, or adding a clause or condition to the covered transaction vehicle. Condition: Suspension and debarment verification procedures were not always performed prior to entering into covered transactions. Cause: The Nevada State Public Charter School Authority (the Authority) did not have internal controls to ensure suspension and debarment verification procedures were performed prior to entering into all subawards under federal awards. Effect: Payments could be made to recipients who were suspended or debarred. Questioned Costs: None Context/Sampling: Sampling was not utilized. We reviewed the standard subaward language for the Authority which is used for all subawards issued by the Authority. We noted a clause was not included in the subawards and no other procedures were performed. The authority has 27 subrecipients under the Special Education Cluster. Repeat Finding from Prior Year: No Recommendation: We recommend the Authority implement internal controls to ensure suspension and debarment verification procedures are performed prior to entering into all subawards under federal awards. Views of Responsible Officials: The Nevada State Public Charter School Authority agrees with this finding.

2019-026: U.S. Department of Education Special Education Cluster: Special Education-Grants to States, CFDA 84.027 Special Education-Preschool Grants, CFDA 84.173 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 84.027 and 84.173 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that: A. Pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award?s CFDA number is identified to the subrecipient at the time of disbursement. B. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. C. Pass-through entities verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient takes timely corrective action on all audit findings, as applicable. Condition: A. Subawards did not include certain information required by Uniform Guidance. In addition, the award?s CFDA number was not identified to the subrecipient at the time of disbursement. B. An evaluation of each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring was not performed and/or not utilized to determine the monitoring plan. In addition, programmatic monitoring for performance pursuant to subawards was incomplete. C. Procedures were not performed to verify that subrecipients were audited (or not required to be audited) as required by Uniform Guidance, review audit reports for audit findings, issue management decisions, as applicable, and ensure the subrecipient took timely corrective action on all audit findings, as applicable. Cause: The Nevada Department of Education (the Department) and the Nevada State Public Charter School Authority (the Authority) did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Department. Questioned Costs: Undetermined Context/Sampling: Testing was performed over each requirement for the Department and the Authority. The applicable populations were as follows: 48 subrecipients in total; 21 applicable to the Department and 27 applicable to the Authority. Total payments made to subrecipients were 787; 327 applicable to the Department and 460 applicable to the Authority. A. A nonstatistical sample of ten subawards was selected for testing. All three subawards from the Department and all seven from the Authority were missing information required by Uniform Guidance. A nonstatistical sample of 65 payments to subrecipients was selected for testing. Of these 65 payments selected, 46 payments were made by the Department and 19 were made by the Authority. The Department did not communicate the award?s CFDA number at the time of disbursement in three of the payments. B. A nonstatistical sample of ten subrecipients was selected for testing. The Department monitored the three subrecipients selected but based on policies and procedures that did not include consideration of risk assessment (even though a risk assessment was performed). The Authority did not perform a risk assessment or monitor programmatic performance for the seven subrecipients selected. C. A nonstatistical sample of ten subrecipients (seven applicable to the Authority) was selected for testing. The Authority received an audit report for the seven subrecipients tested. However, there was no evidence that the Authority had reviewed the audit report. Repeat Finding from Prior Year: Yes ? parts A and B were prior year finding 2018-022. Recommendation: We recommend the Department and the Authority enhance internal controls to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: The Nevada Department of Education and the Nevada State Public Charter School Authority agrees with this finding.

2019-027: U.S. Department of Education Rehabilitation Services Vocational Rehabilitation Grants to States, CFDA 84.126 Earmarking Material Weakness in Internal Control over Compliance Grant Award Number: Affects grant award #H126A180041 included under CFDA 84.126. Criteria: The OMB Compliance Supplement indicates that states must reserve and expend at least 15 percent of pre-employment transition services to students with disabilities who are eligible, or potentially eligible, for VR services. Condition: Pre-employment transition services were not expended at the minimum 15 percent. Cause: The Nevada Department of Employment, Training and Rehabilitation (the Department) did not have adequate internal controls to ensure pre-employment transition service expenditures were at least 15 percent of the VR allotment expended. Effect: Pre-employment transition services were underfunded. Questioned Costs: None Context/Sampling: No sampling was used. Total expenditures were $18,531,753, which would require at least $2,779,763 to be expended towards pre-employment transition services. However, only $2,082,080 was spent, which is a deficit of $697,683. Repeat Finding from Prior Year: No Recommendation: We recommend the Department enhance internal controls to ensure compliance with earmarking requirements. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2019-028: U.S. Department of Education Rehabilitation Services Vocational Rehabilitation Grants to States, CFDA 84.126 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 84.126 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Condition: Information in the Case Service Report (RSA-911) was reported inaccurately or not supported by underlying information. Cause: The Nevada Department of Employment, Training and Rehabilitation (the Department) did not have adequate internal controls to ensure key data elements in the RSA-911 were accurate or supported by underlying information. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of 2,467 individuals included on the RSA-911 report was selected for testing. Of the 60 individuals tested, we noted seven instances where a copy of the signed application was not maintained in support of the reported application dates. We also noted one instance where an applicate date reported did not agree to the underlying application. Additionally, we noted one instance of an incorrect start of employment date reported. Repeat Finding from Prior Year: Yes ? prior year finding 2018-027. Recommendation: We recommend the Department enhance internal controls to ensure key data elements in the RSA-911 are accurate and supported by underlying information. Views of Responsible Officials: The Nevada Department of Employment, Training and Rehabilitation agrees with this finding.

2019-029: U.S. Department of Health and Human Services Child Support Enforcement, CFDA 93.563 TANF Cluster: Temporary Assistance for Needy Families, CFDA 93.558 Medicaid Cluster: State Medicaid Fraud Control Units, CFDA 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, CFDA 93.777 Medical Assistance Program (Medicaid; Title XIX), CFDA 93.778 Children?s Health Insurance Program (CHIP), CFDA 93.767 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.563, 93.558, 93.778, and 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Cost allocation was not updated to reflect changes in total costs, thus not reflecting final actual amounts. Cause: The Nevada Division of Welfare and Supportive Services (the Division) did not have adequate internal controls to ensure final expenditure amounts were allocated. Effect: Administrative costs claimed were inaccurate. Questioned Costs: Less than $25,000 for each major program individually and in the aggregate. Context/Sampling: No sampling was used; total allocated expenditures for the programs were reconciled to supporting records. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure final expenditure amounts are allocated. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2019-030: U.S. Department of Health and Human Services TANF Cluster: Temporary Assistance for Needy Families (TANF), CFDA 93.558 Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that: A. Pass-through entities ensure that every subaward includes certain information at the time of the subaward. B. Pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the subrecipient monitoring must ensure that the subaward is used for authorized purposes. Condition: A. The information required by Uniform Guidance was not communicated. B. Monitoring was not performed in accordance with established policies to ensure that the subaward was used for authorized purposes. Cause: The Nevada Division of Welfare and Supportive Services (Division) and the Nevada Department of Education (Department) administer this program. Neither the Division nor the Department had internal controls in place to ensure that subawards included all information required by Uniform Guidance at the time of the subaward and the Department did not have internal controls in place to ensure the monitoring took place. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division and the Department. Questioned Costs: Undetermined Context/Sampling: This program had two subrecipients at the Division and both were tested. This program had one subrecipient at the Department and it was tested. None of the subawards contained all the required information. In addition, the Department did not monitor its subrecipient. Repeat Finding from Prior Year: No Recommendation: We recommend the Division and the Department implement internal controls to ensure subawards include all information required by Uniform Guidance and the Department ensure procedures are put in place to monitor subrecipients during the year. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services and the Nevada Department of Education agree with this finding.

2019-031: U.S. Department of Health and Human Services Temporary Assistance for Needy Families, CFDA 93.558 Special Tests and Provisions ? Penalty for Refusal to Work Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.558 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement states that a State agency must reduce or terminate the assistance payable to the family if an individual in a family receiving assistance refuses to work, subject to any good cause or other exemptions established by the State. Condition: Assistance payments were not terminated timely. Cause: The Nevada Division of Welfare and Social Services (the Division) did not have adequate internal controls to ensure assistance was terminated timely for non-compliant participants. Effect: Assistance was provided to ineligible participants. Questioned Costs: $1,052 in known questioned costs. Projected questioned costs are not accurately determinable in this circumstance but are potentially greater than $25,000 given the error rate in the context noted below. Context/Sampling: A nonstatistical sample of 60 refusal to work cases out of a population of 2,686 was selected for testing. Two of the cases did not have assistance terminated timely. One participant received assistance payments for one additional month and the other for three additional months after they were ineligible. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure assistance is terminated timely for non-compliant participants. Views of Responsible Officials: The Nevada Division of Welfare and Social Services agrees with this finding.

2019-032: U.S. Department of Health and Human Services Child Support Enforcement, CFDA 93.563 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.563 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward and that the award?s CFDA number is identified to the subrecipient at the time of disbursement. Condition: Subawards did not include information that indicated whether the award was a Research and Development (R&D) award. In addition, the CFDA number was not identified at the time of disbursement. Cause: The Nevada Division of Welfare and Social Services (the Division) did not have adequate internal controls in place to ensure subawards addressed the R&D requirement and that the CFDA number was communicated on all disbursements. Effect: Subrecipients may not record or classify grant funds appropriately. Questioned Costs: None Context/Sampling: A nonstatistical sample of three subawards out of a population of 12 was selected for testing. None of the subawards contained the R&D information. In addition, we selected a nonstatistical sample of 60 payments to subrecipients out of a population of 562 and 33 of the payments did not identify the award?s CFDA number. However, the 33 payments identified were all prior to February 2019. Repeat Finding from Prior Year: Yes ? prior year finding 2018-036. Recommendation: We recommend the Division enhance internal controls to ensure all required elements are communicated in the subawards and that the Division continue to follow procedures implemented in February 2019 for communicating the CFDA number on subrecipient disbursements. Views of Responsible Officials: The Nevada Division of Welfare and Social Services agrees with this finding.

2019-033: U.S. Department of Health and Human Services Foster Care ? Title IV-E, CFDA 93.658 Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that funds may be expended for Foster Care maintenance payments on behalf of eligible children, in accordance with the Title IV-E agency?s Foster Care maintenance payment rate schedule and in accordance with 45 CFR section 1356.21, to individuals serving as foster family homes, to child-care institutions, or to public or private child-placement or child-care agencies. Condition: In a certain instance, a provider was paid more than once for foster care services for a specific child on the same day. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure that the provider was paid only once for foster care services for a specific child on the same day. Effect: Unallowable costs were charged to the federal program. Questioned Costs: None, as known questioned costs did not exceed $25,000. Context/Sampling: We selected a nonstatistical sample of 60 providers, which represented approximately 700 months of service. We noted one instance where a provider was paid more than once for foster care services for a specific child on the same day, representing 1 day of service. Repeat Finding from Prior Year: Yes - prior year finding 2018-037. Recommendation: We recommend the Division enhance internal controls to ensure that a provider is paid only once for foster care services for a specific child on a specific day. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-034: U.S. Department of Health and Human Services Child Welfare Services_State Grants, CFDA 93.645 Foster Care ? Title IV-E, CFDA 93.658 Adoption Assistance, CFDA 93.659 Social Services Block Grant, CFDA 93.667 Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.645, CFDA 93.658, CFDA 93.659, and CFDA 93.667 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement provides that a State must claim federal financial participation for costs associated with a program only in accordance with its approved cost allocation plan. Since cost allocation plans are of a narrative nature, the federal government needs assurance that the cost allocation plan has been implemented as approved. Condition: Allocation methods used in cost allocation did not agree to the approved cost allocation plan. In addition, allocation statistics were not supported by underlying information. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure the cost allocation plan narrative appropriately reflected allocation methods and allocation statistics were accurate. Effect: Administrative costs claimed were inaccurate. Questioned Costs: Costs were overclaimed or underclaimed for each program as follows: Child Welfare Services_State Grants: $89,618 Foster Care ? Title IV-E: ($118,099) Adoption Assistance: ($91) Social Services Block Grant: $119,473 Context/Sampling: A nonstatistical sample of two out of four quarters of cost allocation was originally selected for testing. The errors noted in the two quarters were adjusted for all four quarters to determine the questioned costs. We examined all the allocation methods and statistics used for those two quarters tested. Repeat Finding from Prior Year: Yes ? prior year finding 2018-038. Recommendation: We recommend the Division enhance internal controls to ensure the cost allocation plan narrative appropriately reflects allocation methods and allocation statistics are accurate. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-035: U.S. Department of Health and Human Services Foster Care ? Title IV-E, CFDA 93.658 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.658 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities ensure that every subaward includes certain information at the time of the subaward. Condition: Subawards did not include certain information required by Uniform Guidance. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure subawards contained all required information. Effect: Noncompliance at the subrecipient level may occur and not be detected by the Division. Questioned Costs: None Context/Sampling: The entire population of two subawards was tested. Neither of the subawards contained all the required information. Repeat Finding from Prior Year: Yes ? prior year finding 2018-041. Recommendation: We recommend the Division implement internal controls to ensure subawards contain all required information. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-036: U.S. Department of Health and Human Services Foster Care ? Title IV-E, CFDA 93.658 Adoption Assistance, CFDA 93.659 Other Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects grant award #G-1901NVFOST included under CFDA 93.658 and grant award #G-1901NVADPT included under CFDA 93.659 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the State of Nevada to prepare a Schedule of Expenditures of Federal Awards (SEFA) showing both total federal expenditures and payments to subrecipients for the year. Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure total federal expenditures and payments to subrecipients were appropriately reported on the SEFA. Effect: Prior to correction, the total federal expenditures on the SEFA were understated by $322,564 for Foster Care and $618,384 for Adoption Assistance and pass-through payments were overstated by $130,051 for Foster Care and $490,468 for Adoption Assistance. Questioned Costs: None Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: Yes ? prior year finding 2018-042. Recommendation: We recommend the Division enhance internal controls to ensure total federal expenditures and payments to subrecipients are appropriately reported on the SEFA. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-037: U.S. Department of Health and Human Services Adoption Assistance, CFDA 93.659 Matching, Level of Effort, and Earmarking and Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 93.659 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement indicates that a Title IV-E agency is required to spend an amount equal to any savings in state expenditures under Title IV-E as a result of applying the differing program eligibility rules to applicable children for a fiscal year for any services that may be provided under Title IV-B or IV-E. Agencies must calculate the adoption savings and report annually to the Administration for Children and Families the methodology used, the amount of savings, and how the savings are spent. Agencies report this information on the Title IV-E Programs Annual Adoption Savings Calculation and Accounting Report (CB-496, Part 4). The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Condition: The amount of savings expended were reported inaccurately. Cause: The Nevada Division of Child and Family Services (the Division) did not have adequate internal controls to ensure the amount of expenditures from adoption savings were accurately tracked and reported. Effect: Inaccurate information was reported to the federal awarding agency and adoption savings have not been utilized to supplement services. Questioned Costs: None Context/Sampling: No sampling was used; the annual adoption savings are reported annually. Prior year cumulative savings expenditures in Section B of the CB-496, Part 4 were reported as $3,231,314. However, the Division has not yet implemented a program to utilize its savings and those expenditures are not supported by underlying information. Repeat Finding from Prior Year: No Recommendation: We recommend the Division enhance internal controls to ensure the amount of expenditures from adoption savings are accurately tracked and reported. Views of Responsible Officials: The Nevada Division of Child and Family Services agrees with this finding.

2019-038: U.S. Department of Health and Human Services Children?s Health Insurance Program (CHIP), CFDA 93.767 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.767 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period are supported by underlying accounting information and are presented in accordance with program requirements. Condition: Amounts reported on the Quarterly Children?s Health Insurance Program Statement of Expenditures for Title XXI (CMS-21) were not supported by the underlying accounting information. Cause: The Nevada Division of Health Care Financing and Policy (the Division) did not have adequate internal controls to ensure CMS-21 reports were reported accurately. Effect: Inaccurate information may have been reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two CMS-21 reports out of four was selected for testing. Lines 25 and 33, in total, were overstated by $110,365 on the December 31, 2018 CMS-21 report and by $5,150 on the March 31, 2019 CMS-21 report (Total Computable Column). Repeat Finding from Prior Year: Yes ? prior year finding 2018-044. Recommendation: We recommend the Division enhance internal controls to ensure CMS-21 reports are reported accurately. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

2019-039: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, CFDA 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, CFDA 93.777 Medical Assistance Program (Medicaid; Title XIX), CFDA 93.778 Eligibility Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under CFDA 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. To ensure compliance with Eligibility, the Nevada Division of Welfare and Supportive Services (the Division) has instituted a policy requiring a case manager to approve eligibility determinations (applications). Condition: There was no discernible evidence of the date applications were received and reviewed by the Division. Cause: The Division did not follow (or have evidence of following) its internal control policy to have all paper applications reviewed, and date stamped. Effect: Failure to evaluate all eligible months may occur, which could lead to lack of eligibility payments to the applicant and possible underpayments. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 out of 107,260 Modified Adjusted Gross Income (MAGI) eligibility determinations was selected for testing. Three applications did not have discernible evidence of the date the application was received and approved by the Division. Repeat Finding from Prior Year: No Recommendation: We recommend the Division follow its own internal control policy to have paper applications reviewed and date stamped upon receipt. Views of Responsible Officials: The Nevada Division of Welfare and Supportive Services agrees with this finding.

2019-040: U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, CFDA 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, CFDA 93.777 Medical Assistance Program (Medicaid; Title XIX), CFDA 93.778 Special Tests and Provisions ? ADP Risk Analysis and System Security Review Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under CFDA 93.775, CFDA 93.777, and CFDA 93.778 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires State Medicaid Agencies (SMA) to establish and maintain a program for conducting periodic risk analyses to ensure that appropriate and cost-effective safeguards are incorporated into new and existing systems. This includes performing risk analyses whenever significant system changes occur. SMAs shall review the ADP system security installations involved in the administration of HHS programs on a biennial basis. At a minimum, the reviews shall include an evaluation of physical and data security operating procedures, and personnel practices. Condition: No review over the ADP system was completed. Cause: The Nevada Division of Health Care Financing and Policy (the Division) did not have internal controls to ensure an ADP review was completed when required. Effect: Security of the ADP system may be insufficient. Questioned Costs: None Context/Sampling: No sampling was used. The Division implemented major system changes in February 2019. In addition, the biennial ADP system review was also required as the previous ADP system review was completed in June 2017. Repeat Finding from Prior Year: No Recommendation: We recommend the Division implement internal controls to ensure an ADP review is completed when required. Views of Responsible Officials: The Nevada Division of Health Care Financing and Policy agrees with this finding.

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