Bristol Bay Borough

Finding 2024-003 Reporting - Timely Submission of Financial Reports – Noncompliance and Significant Deficiency in Internal Control over Compliance Agency Department of Health and Human Services Program ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year 2024 Criteria or Specific Requirement 2 CFR subtitle A Chapter II part 200 subpart F section 200.512 states that “(1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day.” Condition The Federal data collection form and reporting package were not filed on time. Cause There were limited personnel resources at the Borough to assist in the timely completion of the Borough’s audit. Effect or potential effect Federal funds could potentially be expended on unallowable activities and for unallowed costs, and outside the period of performance. Questioned Costs None noted. Context The Form SF-SAC is due nine months after the fiscal year-end. The form for the fiscal year ended June 30, 2024 was filed late. Identification as a Repeat Finding Yes. Finding 2023-003 Significant Deficiency in Internal Control over Compliance and Noncompliance Recommendation The Borough should evaluate resources allocated to staffing to ensure it has the capacity to adequately prepare and assist in the timely execution of the audit. Views of responsible officials Management agrees with the finding and has engaged additional accounting resources and expertise.

Finding 2024-004 Reporting – Material Noncompliance and Material Weakness in Internal Control Over Compliance Agency Department of Health and Human Services Program ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year 2024 Criteria or Specific Requirement In accordance with 2 CFR part 170, the Borough was required to report firsttier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition The required reports were not submitted during the year. Controls were not in place to evaluate the applicability of the reporting requirement and ensure the reports were submitted timely. Cause Borough was not aware that this subaward reporting requirement was applicable for the Health Center Program Cluster until fiscal year 2025. Effect or potential effect The Borough was not in compliance with subrecipient reporting requirements Questioned Costs None noted. Context The auditor requested the reports for the Borough’s subawards that were required under FSRS. The Borough was unable to provide the requested supports as they had not been filed. Identification as a Repeat Finding Yes. 2023-004 Material Weakness in Internal Control over Compliance and Noncompliance Recommendation The Borough should implement internal control procedures to evaluate applicability of grant reporting requirements, especially when funding sources or nature of grant awards change. Views of responsible officials Management agrees with the finding and will ensure all subawards are properly and timely reported.

Finding 2023-003 Reporting - Timely Submission of Financial Reports – Significant Deficiency in Internal Control over Compliance and Noncompliance Agency Department of Health and Human Services Program ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year 2023 Criteria or Specific Requirement 2 CFR subtitle A Chapter II part 200 subpart F section 200.512 states that “(1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day.” Condition The Federal data collection form and reporting package were not filed on time. Cause There were limited personnel resources at the Borough to assist in the timely completion of the Borough’s audit. Effect or potential effect Federal funds could potentially be expended on unallowable activities and for unallowed costs, and outside the period of performance. Questioned Costs None noted. Context The Form SF-SAC is due nine months after the fiscal year-end. The form for the fiscal year ended June 30, 2023 was filed late. Identification as a Repeat Finding Yes. Finding 2022-003 Significant Deficiency in Internal Control over Compliance and Noncompliance Recommendation The Borough should evaluate resources allocated to staffing to ensure it has the capacity to adequately prepare and assist in the timely execution of the audit. Views of responsible officials Management agrees with the finding and is in the process of catching up on audits with the goal of completing the FY 2025 audit timely.

Finding 2023-004 Reporting – Material Weakness in Internal Control Over Compliance and Material Noncompliance Agency Department of Health and Human Services Program ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year 2023 Criteria or Specific Requirement In accordance with 2 CFR part 170, the Borough was required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition The required reports were not submitted during the year. Controls were not in place to evaluate the applicability of the reporting requirement and ensure the reports were submitted timely. Cause The Borough received funding related to the American Rescue Plan Act Funding for Health Centers (ARPA). The Borough was not aware that this subaward reporting requirement was applicable for funds received under ARPA. Effect or potential effect The Borough was not in compliance with subrecipient reporting requirements Questioned Costs None noted. Context The auditor requested the reports for the Borough’s subawards that were required under FSRS. The Borough was unable to provide the requested supports as they had not been filed. Identification as a Repeat Finding Yes. 2022-004 Material Weakness in Internal Control over Compliance and Noncompliance Recommendation The Borough should implement internal control procedures to evaluate applicability of grant reporting requirements, especially when funding sources or nature of grant awards change. Views of responsible officials Management agrees with the finding. The Borough has taken corrective action for the audit finding. New controls are being put into place to ensure that all subawards over $30,000 are properly and timely reported.

Finding 2022-003 Reporting - Timely Submission of Financial Reports – Significant Deficiency in Internal Control over Compliance and Noncompliance Agency Department of Health and Human Services Program ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year 2022 Agency U.S. Department of Treasury Program ALN: No. 21.019 COVID-19 Coronavirus Relief Fund Award Year 2022 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CFR-029 Criteria or Specific Requirement 2 CFR subtitle A Chapter II part 200 subpart F section 200.512 states that “(1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day.” Condition The Federal data collection form and reporting package were not filed on time. Cause There were limited personnel resources at the Borough to assist in the timely completion of the Borough’s audit. Effect or potential effect Federal funds could potentially be expended on unallowable activities and for unallowed costs, and outside the period of performance. Questioned Costs None noted. Context The Form SF-SAC is due nine months after the fiscal year-end. The form for the fiscal year ended June 30, 2022 was filed late. Identification as a Repeat Finding Yes. Finding 2021-006 Material Weakness in Internal Control over Compliance and Noncompliance. Recommendation The Borough should evaluate resources allocated to staffing to ensure it has the capacity to adequately prepare and assist in the timely execution of the audit. Views of responsible officials Management agrees with the finding and is in the process of catching up on audits with the goal of completing the FY 2025 audit timely.

Finding 2022-004 Reporting – Material Weakness in Internal Control Over Compliance and Material Noncompliance Agency Department of Health and Human Services Program ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year 2022 Criteria or Specific Requirement In accordance with 2 CFR part 170, the Borough was required to report firsttier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition The required reports were not submitted during the year. A control was not in place to evaluate the applicability of the reporting requirement and ensure the reports were submitted timely. Cause In prior years, subawards were determined not to be subject to this reporting requirement. However, in 2022 the Borough received funding related to the American Rescue Plan Act Funding for Health Centers (ARPA). The Borough was not aware that this requirement appears to be applicable for funds received under ARPA. Effect or potential effect The Borough did not submit the reports before the last day of the month following the month in which the subaward/subaward amendment obligation was made, resulting in the submission related to one applicable subrecipients and initial noncompliance with program reporting requirements. Questioned Costs None noted. Context The auditor performed inquiries with the Borough personnel surrounding controls and procedures related to compliance requirements outlines in the OMB Compliance Supplement. This requirement was noted in the Supplement and was determined not to have been done. Identification as a Repeat Finding Not applicable, not a repeat finding. Recommendation The Borough should implement internal control procedures to evaluate applicability of grant reporting requirements, especially when funding sources or nature of grant awards change. Views of responsible officials Management agrees with the finding. The Borough has taken corrective action for the audit finding. New controls are being put into place to ensure that all subawards over $30,000 are properly and timely reported.

Finding 2021-005 Activities Allowed and Unallowed, Allowable Costs, Period of Performance – Material Weakness in Internal Control over Compliance and Noncompliance Agency U.S. Department of Treasury Program ALN: No. 21.019 COVID-19 Coronavirus Relief Fund Award Year 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CFR-029 Criteria or Specific Requirement 2 CFR Subtitle A Chapter II Part 200 Subpart E states that a non-Federal entity must provide for adequate documentation to support costs charged to the Federal Award. 2 CFR Subtitle A Chapter II Part 200 Subpart F section 200.516 states that the auditor must report known questioned costs when likely questioned costs are greater than $25,000 for a type of compliance requirement for a major program. Condition Testwork over a sample of nineteen nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified that two transactions, totaling $4,891, lacked supporting documentation. Cause Internal controls did not ensure that proper supporting documentation was retained in accordance with 2 CFR. 105 Effect or potential effect Questioned Costs Context Repeat Finding Recommendation Views of responsible officials Testwork over nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified questioned costs. $4,891 BDO tested a sample of nineteen nonpayroll transactions and identified two transactions that lacked supporting documentation. The known questioned costs extrapolated over the total population exceeded the reporting threshold of $25,000 for likely questioned costs. No. Management should ensure that purchasing policies and procedures are properly designed, implemented, and operating effectively to ensure adequate documentation is retained to sufficiently support procured goods and services charged to federal awards. Management agrees with the finding. Management is currently undergoing an upgrade in record retention policies and procedures.

Finding 2021-006 Agency Program Reporting - Timely Submission of Financial Reports – Material Weakness in Internal Control over Compliance and Noncompliance U.S. Department of Treasury ALN: No. 21.019 COVID-19 Coronavirus Relief Fund 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CFR-029 Criteria or Specific Requirement 2 CFR subtitle A Chapter II part 200 subpart F section 200.512 states that “(1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day.” Condition The Federal data collection form and reporting package were not filed on time. Cause There were limited personnel resources at the Borough’s to assist in the timely completion of the Borough’s audit. Effect or potential effect Federal funds could potentially be expended on unallowable activities and for unallowed costs, and outside the period of performance. Bristol Bay Borough, Alaska Schedule of Findings and Questioned Costs, continued Year Ended June 30, 2021 106 Questioned Costs None. Context The Form SF-SAC is due nine months after the fiscal year-end. The form for the fiscal year ended June 30, 2021 was filed late. Repeat Finding No. Recommendation The Borough should evaluate resources allocated to staffing to ensure it has the capacity to adequately prepare and assist in the timely execution of the audit. Views of responsible officials Management agrees with the finding and is in the process of catching up on audits with the goal of completing the FY 2023 audit timely.