EIN: 930584306
UEI: KBQCULGVMAA9
Funding agency: U.S. Department of Transportation, Federal. Highway Administration. Title: Highway Planning and Construction. CFDA number: 20.205. Award year and number: 2025 – PO-73000-00034057. Condition: In the process of performing our audit, we noted expenditures on the SEFA were overstated due to the Council including state grant expenditures as federal. Criteria: The Code of Federal Regulations (CFR) requires recipients of federal awards with expenditures greater than $750,000 in a fiscal year prepare a SEFA for the period covered by the financial statements that accurately reports federal expenditures by federal program and includes required elements. Cause: Based on our review and interviews with key finance personnel, it appears that staff believed the funds provided by the state were considered pass-through funds similar to other funding. Effect: The Schedule of Expenditures of Federal Awards would have been materially misstated and incorrect or insufficient major programs could have been selected. Identification of Repeat Finding: This is not a repeat finding. Auditor’s Recommendations: We recommend the Council develop sufficient policies and procedures to ensure only federal expenditures are reported on the schedule of expenditures of federal awards. Management’s Response: All available information on the overstatement pointed to funds originating from the federal COVID bill. With only the side reference in an email from three years ago, did we find any indication that perhaps the funds would be considered state funded. Due to staffing changes since that time, it took several inquiries to find the appropriate person at the state of Oregon who could verify that the funds had met the test for non-federal. It was through an abundance of caution that we chose to include the expenditures on the SEFA report. Better file tracking mechanisms now exist through the agency’s use of OneDrive, Teams, and other centralized Microsoft filing tools. Better communication also exists between the programs, contracts unit, and finance departments.
SEFA expense overstatement originated from a misunderstanding of how to categorize COVID funds. Due to program staffing changes since 2021, it took several inquiries to verify that funds originally categorized as Federal and included on the schedule, were done so in error. It was through an abundance of caution that the agency chose to include the funds on the schedule. The thought was it would be better to include than not. This will not be an issue in the future as we have adjusted our grant and project tracking systems to tag transactions that are attached to our funding types. Program and accounting staff work together to verify that information at least quarterly and better tracking systems now exist through the agency’s use of OneDrive, Teams and other centralized Microsoft filing tools. We have also increased communication between the programs, contracts unite, and finance team.
Funding agency: U.S. Department of Agriculture Rural Development. Title: Intermediary Relending Program. CFDA number: 10.767. Award year and number: 2024 - 62G950040-19-00. Criteria: In accordance with the USDA, accurate information must be reported semiannually. Condition: For one (1) out of four (4) reports sampled, there was an incorrect balance reported. Questioned Costs: None. Cause: Policies and procedures were not in place to ensure the balances uploaded to USDA were reviewed for accuracy and completeness before upload. Effect: Balances were uploaded for committed cash and loan loss reserve on the USDA report. These balances should not have reported as there is no balance. Auditor’s Recommendations: We recommend the Government develop sufficient policies and procedures to review and approve the amounts before they are reported. Management’s Response: The agency has been working diligently with the USDA on a continual basis for the last year attempting to correct the portal access that the USDA closed to report accurately. We have been in constant communication with federal program managers with little to no response. In March 2025 a meeting was held with all players from state, federal, OCWCOG, and our loan servicer, CCD Business Development Corp. We established a plan to move forward and have identified steps to validate and verify information being reported prior to submission. USDA, CCD and Lending staff are working cooperatively on this effort.
Reporting issues with the USDA lending program have been resolved as of March 2025. Steps have been identified to validate and verify information being reported prior to submission. USDA, CCD and Lending staff are working cooperatively on this effort.
Funding agency: U.S. Department of Transportation, Federal Highway Administration. Title: Highway Planning and Construction. CFDA number: 20.205. Award year and number: 2025 – PO-73000-00034057. Criteria: Under 2 CFR Part 200, Subpart E, costs charged to a federal award must be allowable, reasonable, allocable, and consistently treated. Indirect costs may not be charged both directly and through application of an approved indirect cost rate, as this results in duplicate reimbursement of the same costs. Condition: OCWCOG submitted a grant budget that included indirect-cost-type expenditures within direct expense line items as well as within the indirect cost rate submission calculation, which resulted in indirect costs being charged twice to the federal award. Questioned Costs: None reported. The known likely questioned costs are below $25,000. Cause: As a result of turnover within the planning department, management did not have adequate controls over the preparation and review of grant budgets and reimbursement calculations to ensure indirect costs included in grant budgets were excluded from the indirect cost rate calculation. Effect: The federal award was charged unallowable duplicate indirect costs. Although the amount identified was less than the Uniform Guidance questioned costs reporting threshold of $25,000, the practice resulted in noncompliance with federal cost principles and increases the risk that federal awards may be overcharged. Auditor’s Recommendations: We recommend the governmental entity strengthen internal controls over grant budgeting and claims for reimbursement by: 1. Reviewing grant budgets to ensure indirect costs are not embedded in direct cost line items when an indirect cost rate will be applied; 2. Requiring supervisory review of the indirect cost base and related calculations prior to submission; 3. Providing training to personnel responsible for federal grant accounting on allowable cost requirements under 2 CFR Part 200; and 4. Evaluating whether any adjustment or correction to the grantor is necessary for the duplicate indirect costs identified. Management’s Response: Management is revising procedures to ensure their methodology of applying indirect costs is consistent throughout all grants to ensure that only allowable indirect expenses are charged. These updates are being made in the current budget cycle.
We have revised our process and operating procedure to apply indirect cost methods consistently across all federal grants. We have already corrected the error in FY 2026.
Finding Number Finding 2019-001 Schedule of Federal Awards as prepared by client was materially misstated. Lending Program expenditures were incorrectly determined. Criteria: The schedule of expenditures of federal awards should include all programs, with expenditures calculated in accordance with the Uniform Guidance. Condition: The client failed to calculate lending program expenditures in accordance with the Uniform Guidance guidelines. Prevalence: Noted in current fiscal year only. Questioned costs: None Effect: Miscalculation of major programs and coverage of testing. Recommendations: We recommend additional training for staff involved in preparing the Schedule of Expenditures of Federal Awards. We also recommend additional review of the schedule prior to presentation for audit. Management's response: OCWCOG had new staff working in the system where we record CFDA numbers that were not aware of the need to record these numbers when entering into the tracking system. Due to this issue the CFDA number for a new Senior Corp award (Senior Companion) was not pulled and included in the Schedule of Federal Award. Training has been provided to these staff to ensure we can pull the proper information for the Schedule of Federal Award annually. These staff were not aware of the Uniform Guidance update, as they were new and as the Finance Director failed see that they did not understand the process. Staff have had external training on Uniform Guidance once we realized the deficiency.
OCWCOG staff responsible for Uniform Guidance and preparing the Schedule of Federal Award attended a two day training on Federal Grants Management Update 2019 and Super Circular in December of 2019. We have developed a new process internally to ensure that all Federal Grant and Contracts are recorded properly and accurately.
2019-002 Schedule of Federal Awards as prepared by client did not include Federal Lending Program for Rural Microentreprenuer Assistance Program. Criteria: All Federal programs should be included on the Schedule of Federal Awards. Condition: The client failed to include program expenditures for the Rural Microentreprenuer Assistance Program on the Schedule of Expenditures of Federal Awards in accordance with the Uniform Guidance guidelines. Prevalence: Noted in current fiscal year only. Questioned costs: None Effect: Miscalculation of major programs and coverage of testing. Recommendations: We recommend additional training for staff involved in preparing the Schedule of Expenditures of Federal Awards. We also recommend additional review of the schedule prior to presentation for audit. Management's response: OCWCOG had new staff working in the system where we record CFDA numbers that were not aware of the need to record these numbers when entering into the tracking system. Due to this issue the CFDA number for a new Business Lending Program award (Federal Micro Lending) was not pulled and included in the Schedule of Federal Award. Training has been provided to these staff to ensure we can pull the proper information for the Schedule of Federal Award annually. These staff were not aware of the Uniform Guidance update, as they were new and as the Finance Director failed see that they did not understand the process. Staff have had external training on Uniform Guidance once we realized the deficiency.
OCWCOG staff responsible for Uniform Guidance and preparing the Schedule of Federal Award attended a two day training on Federal Grants Management Update 2019 and Super Circular in December of 2019. We have developed a new process internally to ensure that all Federal Grant and Contracts are recorded properly and accurately.
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