AMERICAN SAMOA GOVERNMENTLocal Government

Finding 2023-004 Special Tests and Provisions Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.205 – Highway Planning and Construction Criteria: Based on requirements of the 2 CFR Part 200, Appendix XI Compliance Supplement for Highway Planning and Construction grants, there should be a quality assurance program in place, which monitors compliance with the grant requirements. Condition and context: The Territory does not currently have a quality assurance program in place for the Highway Planning and Construction grant. While there were no deviations noted in our sample, there are no monitoring controls in place to prevent, detect and correct potential misstatements on a timely basis. Cause: The Territory is currently working with the Federal Highway Administration to establish a quality assurance program, however it was not completed and implemented at year end. Effect: Potential noncompliance with grant requirements due to lack of monitoring controls and quality assurance in place. Questioned Costs: None Recommendation: The Territory should continue to work with the Federal Highway Administration to implement, a quality assurance program.

Finding 2023-004 Special Tests and Provisions Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.205 – Highway Planning and Construction Criteria: Based on requirements of the 2 CFR Part 200, Appendix XI Compliance Supplement for Highway Planning and Construction grants, there should be a quality assurance program in place, which monitors compliance with the grant requirements. Condition and context: The Territory does not currently have a quality assurance program in place for the Highway Planning and Construction grant. While there were no deviations noted in our sample, there are no monitoring controls in place to prevent, detect and correct potential misstatements on a timely basis. Cause: The Territory is currently working with the Federal Highway Administration to establish a quality assurance program, however it was not completed and implemented at year end. Effect: Potential noncompliance with grant requirements due to lack of monitoring controls and quality assurance in place. Questioned Costs: None Recommendation: The Territory should continue to work with the Federal Highway Administration to implement, a quality assurance program.

Finding 2023-005 – Federal Agency Review Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Agriculture Food and Nutritional Service Federal Program – CFDA 10.555 – National School Lunch Program Criteria: From the USDA’s Food & Nutritional Services (FNS) review conducted in March 2019 over fiscal year 2018, nine findings remain open.   Condition and context: Within the USDA FNS report, issues or findings in the following areas were noted: • Capital Expenditures & Management • Civil Rights Training • Civil Rights Complaint Procedures • Inventory Management • Meal Counting, Record Keeping • Procurement • Reporting, Audit Tracking • Reporting, Allowable Costs • Special Dietary Accommodations Cause: Insufficient training and oversight of program personnel with respect to program requirements may have contributed to the lack of compliance with program requirements. Effect: The Territory is not in compliance with the USDA Food & Nutritional Service Requirements. Questioned costs: None Recommendation: The Territory should continue to implement the corrective action provided by the USDA FNS in their report dated March 28, 2019 and await subsequent audit by the USDA FNS for approval completeness of corrective action.

Finding 2023-005 – Federal Agency Review Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Agriculture Food and Nutritional Service Federal Program – CFDA 10.555 – National School Lunch Program Criteria: From the USDA’s Food & Nutritional Services (FNS) review conducted in March 2019 over fiscal year 2018, nine findings remain open.   Condition and context: Within the USDA FNS report, issues or findings in the following areas were noted: • Capital Expenditures & Management • Civil Rights Training • Civil Rights Complaint Procedures • Inventory Management • Meal Counting, Record Keeping • Procurement • Reporting, Audit Tracking • Reporting, Allowable Costs • Special Dietary Accommodations Cause: Insufficient training and oversight of program personnel with respect to program requirements may have contributed to the lack of compliance with program requirements. Effect: The Territory is not in compliance with the USDA Food & Nutritional Service Requirements. Questioned costs: None Recommendation: The Territory should continue to implement the corrective action provided by the USDA FNS in their report dated March 28, 2019 and await subsequent audit by the USDA FNS for approval completeness of corrective action.

Finding 2023-006 Eligible Activities Control Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.218 – Federal Motor Carrier Safety Assistance Program (FMCSA) Criteria: Based on requirements of the 2 CFR Part 200 and the FMCSA Grants Management Manual, recipients are required to have policies and procedures in place to perform vehicle inspections in accordance with the grant provisions. Condition and context: The following findings were noted in the review conducted by the MCA grantor during 2022, and were still open during our review. 1-Written policies and procedures are not in place to comply with federal policy. 2-The American Samoa Department of Public Safety does not have policy for commercial vehicle inspections fully implemented. Cause: Misunderstanding on criteria to have written policies and procedures. Effect: Potential loss of participation in FMCSA in the future.   Questioned Costs: None Recommendation: The Territory should incorporate all policies and procedures required by FMCSA into a written document and perform training through the Department of Public Safety. This will satisfy the requirements of the FMCSA and also ensure that all public safety performing inspections are properly trained and aware of the requirements.

Finding 2023-006 Eligible Activities Control Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.218 – Federal Motor Carrier Safety Assistance Program (FMCSA) Criteria: Based on requirements of the 2 CFR Part 200 and the FMCSA Grants Management Manual, recipients are required to have policies and procedures in place to perform vehicle inspections in accordance with the grant provisions. Condition and context: The following findings were noted in the review conducted by the MCA grantor during 2022, and were still open during our review. 1-Written policies and procedures are not in place to comply with federal policy. 2-The American Samoa Department of Public Safety does not have policy for commercial vehicle inspections fully implemented. Cause: Misunderstanding on criteria to have written policies and procedures. Effect: Potential loss of participation in FMCSA in the future.   Questioned Costs: None Recommendation: The Territory should incorporate all policies and procedures required by FMCSA into a written document and perform training through the Department of Public Safety. This will satisfy the requirements of the FMCSA and also ensure that all public safety performing inspections are properly trained and aware of the requirements.

Finding 2023-004 Special Tests and Provisions Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.205 – Highway Planning and Construction Criteria: Based on requirements of the 2 CFR Part 200, Appendix XI Compliance Supplement for Highway Planning and Construction grants, there should be a quality assurance program in place, which monitors compliance with the grant requirements. Condition and context: The Territory does not currently have a quality assurance program in place for the Highway Planning and Construction grant. While there were no deviations noted in our sample, there are no monitoring controls in place to prevent, detect and correct potential misstatements on a timely basis. Cause: The Territory is currently working with the Federal Highway Administration to establish a quality assurance program, however it was not completed and implemented at year end. Effect: Potential noncompliance with grant requirements due to lack of monitoring controls and quality assurance in place. Questioned Costs: None Recommendation: The Territory should continue to work with the Federal Highway Administration to implement, a quality assurance program.

Finding 2023-004 Special Tests and Provisions Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.205 – Highway Planning and Construction Criteria: Based on requirements of the 2 CFR Part 200, Appendix XI Compliance Supplement for Highway Planning and Construction grants, there should be a quality assurance program in place, which monitors compliance with the grant requirements. Condition and context: The Territory does not currently have a quality assurance program in place for the Highway Planning and Construction grant. While there were no deviations noted in our sample, there are no monitoring controls in place to prevent, detect and correct potential misstatements on a timely basis. Cause: The Territory is currently working with the Federal Highway Administration to establish a quality assurance program, however it was not completed and implemented at year end. Effect: Potential noncompliance with grant requirements due to lack of monitoring controls and quality assurance in place. Questioned Costs: None Recommendation: The Territory should continue to work with the Federal Highway Administration to implement, a quality assurance program.

Finding 2023-005 – Federal Agency Review Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Agriculture Food and Nutritional Service Federal Program – CFDA 10.555 – National School Lunch Program Criteria: From the USDA’s Food & Nutritional Services (FNS) review conducted in March 2019 over fiscal year 2018, nine findings remain open.   Condition and context: Within the USDA FNS report, issues or findings in the following areas were noted: • Capital Expenditures & Management • Civil Rights Training • Civil Rights Complaint Procedures • Inventory Management • Meal Counting, Record Keeping • Procurement • Reporting, Audit Tracking • Reporting, Allowable Costs • Special Dietary Accommodations Cause: Insufficient training and oversight of program personnel with respect to program requirements may have contributed to the lack of compliance with program requirements. Effect: The Territory is not in compliance with the USDA Food & Nutritional Service Requirements. Questioned costs: None Recommendation: The Territory should continue to implement the corrective action provided by the USDA FNS in their report dated March 28, 2019 and await subsequent audit by the USDA FNS for approval completeness of corrective action.

Finding 2023-005 – Federal Agency Review Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Agriculture Food and Nutritional Service Federal Program – CFDA 10.555 – National School Lunch Program Criteria: From the USDA’s Food & Nutritional Services (FNS) review conducted in March 2019 over fiscal year 2018, nine findings remain open.   Condition and context: Within the USDA FNS report, issues or findings in the following areas were noted: • Capital Expenditures & Management • Civil Rights Training • Civil Rights Complaint Procedures • Inventory Management • Meal Counting, Record Keeping • Procurement • Reporting, Audit Tracking • Reporting, Allowable Costs • Special Dietary Accommodations Cause: Insufficient training and oversight of program personnel with respect to program requirements may have contributed to the lack of compliance with program requirements. Effect: The Territory is not in compliance with the USDA Food & Nutritional Service Requirements. Questioned costs: None Recommendation: The Territory should continue to implement the corrective action provided by the USDA FNS in their report dated March 28, 2019 and await subsequent audit by the USDA FNS for approval completeness of corrective action.

Finding 2023-006 Eligible Activities Control Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.218 – Federal Motor Carrier Safety Assistance Program (FMCSA) Criteria: Based on requirements of the 2 CFR Part 200 and the FMCSA Grants Management Manual, recipients are required to have policies and procedures in place to perform vehicle inspections in accordance with the grant provisions. Condition and context: The following findings were noted in the review conducted by the MCA grantor during 2022, and were still open during our review. 1-Written policies and procedures are not in place to comply with federal policy. 2-The American Samoa Department of Public Safety does not have policy for commercial vehicle inspections fully implemented. Cause: Misunderstanding on criteria to have written policies and procedures. Effect: Potential loss of participation in FMCSA in the future.   Questioned Costs: None Recommendation: The Territory should incorporate all policies and procedures required by FMCSA into a written document and perform training through the Department of Public Safety. This will satisfy the requirements of the FMCSA and also ensure that all public safety performing inspections are properly trained and aware of the requirements.

Finding 2023-006 Eligible Activities Control Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency – United States Department of Transportation Federal Program – CFDA 20.218 – Federal Motor Carrier Safety Assistance Program (FMCSA) Criteria: Based on requirements of the 2 CFR Part 200 and the FMCSA Grants Management Manual, recipients are required to have policies and procedures in place to perform vehicle inspections in accordance with the grant provisions. Condition and context: The following findings were noted in the review conducted by the MCA grantor during 2022, and were still open during our review. 1-Written policies and procedures are not in place to comply with federal policy. 2-The American Samoa Department of Public Safety does not have policy for commercial vehicle inspections fully implemented. Cause: Misunderstanding on criteria to have written policies and procedures. Effect: Potential loss of participation in FMCSA in the future.   Questioned Costs: None Recommendation: The Territory should incorporate all policies and procedures required by FMCSA into a written document and perform training through the Department of Public Safety. This will satisfy the requirements of the FMCSA and also ensure that all public safety performing inspections are properly trained and aware of the requirements.

Finding 2022-004 Special Tests and Provisions Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency ? United States Department of Transportation Federal Program ? CFDA 20.205 ? Highway Planning and Construction Criteria: Based on requirements of the 2 CFR Part 200, Appendix XI Compliance Supplement for Highway Planning and Construction grants, there should be a quality assurance program in place, which monitors compliance with the grant requirements. Condition and context: The Territory does not currently have a quality assurance program in place for the Highway Planning and Construction grant. While there were no deviations noted in our sample, there are no monitoring controls in place to prevent, detect and correct potential misstatements on a timely basis. Cause: The Territory is currently working with the Federal Highway Administration to establish a quality assurance program, however it was not completed and implemented at year end. Effect: Potential noncompliance with grant requirements due to lack of monitoring controls and quality assurance in place. Questioned Costs: None Recommendation: The Territory should continue to work with the Federal Highway Administration to complete a plan for, and implement, a quality assurance program. View of responsible officials and corrective action plan: ASG agrees with this finding. The AS Department of Public Works (DPW) Civil Highway Division awaits the approval of its Implementation and Stewardship agreement from FHWA headquarters. The agreement, which outlines the roles and responsibilities of a quality assurance program, is renewed every two years. This finding will remain open until the agreement has been approved.

Finding 2022-005 ? Federal Agency Review Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency ? United States Department of Agriculture Food and Nutritional Service Federal Program ? CFDA 10.555 ? National School Lunch Program Criteria: From the USDA?s Food & Nutritional Services (FNS) review conducted in March 2019 over fiscal year 2018, nine findings remain open. Condition and context: Within the USDA FNS report, issues or findings in the following areas were noted: ? Capital Expenditures & Management ? Civil Rights Training ? Civil Rights Complaint Procedures ? Inventory Management ? Meal Counting, Record Keeping ? Procurement ? Reporting, Audit Tracking ? Reporting, Allowable Costs ? Special Dietary Accommodations Cause: Insufficient training and oversight of program personnel with respect to program requirements may have contributed to the lack of compliance with program requirements. Effect: The Territory is not in compliance with the USDA Food & Nutritional Service Requirements. Questioned costs: None Recommendation: The Territory should continue to implement the corrective action provided by the USDA FNS in their report dated March 28, 2019 and await subsequent audit by the USDA FNS for approval completeness of corrective action. Views of responsible officials and corrective action plan: This finding has been addressed in fiscal year 2023. ASGDOE School Lunch Program (SLP) is working with a representative who oversees civil rights for the USDA Western region. Civil rights training for all SLP staff continues yearly with sign-in sheets and agendas for documentation purposes. Reports are submitted to USDA for inventory and mean counts on the 15th of each month. Special dietary accommodations have since been rolled out and schools have been notified of the process should a student require accommodation. USDA is scheduled for a on-site visit soon now that the AS borders are open.

Finding 2022-006 Reporting Control Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency ? United States Department of Treasury Federal Program ? CFDA 21.023 ? Emergency Rental Assistance Criteria: Based on requirements of the 2 CFR Part 200, Appendix XI Compliance Supplement for Emergency Rental Assistance grants, recipients are required to submit two monthly and quarterly reports to the U.S. Treasury. One for ERA 1 and the other for ERA 2. Monthly reports are due to the Treasury by the 15th day of the month. Condition and context: ERA 1 and ERA 2 reports were not submitted to the U.S. Treasury by its due date. Cause: Late submission were due to a lack of oversight on the part of management. Effect: Late submissions of reports to the U.S. Treasury may cause the U.S. Treasury to discontinue granting ERA money to the Territory. Questioned Costs: None Recommendation: The Territory should work with appropriate departments and management to ensure that oversight controls are in place. All grant reporting should be documented when contracts are in place, and specific reminders be set to file all required reports in a timely manner. View of responsible officials and corrective action plan: The Territory agrees with the finding. The ASG Department of Commerce (DOC) had technical issues with the US Treasury portal and could not submit their reports in a timely manner. However, the issue has since been resolved and DOC was able to file their outstanding reports. This finding will not be repeated in the next fiscal year audit report.

Special Tests and Provisions *Significant Deficiencies in Internal Controls over Compliance; Non-Compliance

Reporting *Control Deficiency in Internal Controls over Compliance; Non-Compliance

Federal Agency Review *Significant Deficiency in Internal Controls over Compliance; Non-Compliance

Activities Allowed or Unallowed/Allowable Costs/Cost Principles

Finding 2019-05 Special Tests and Provisions Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency ? United States Department of Transportation Federal Program ? CFDA 20.205 ? Highway Planning and Construction Criteria: Based on requirements of the 2 CFR Part 200, Appendix XI Compliance Supplement for Highway Planning and Construction grants, there should be a quality assurance program in place, which monitors compliance with the grant requirements. Condition and context: The Territory does not currently have a quality assurance program in place for the Highway Planning and Construction grant. While there were no deviations noted in our sample, there are no monitoring controls in place to prevent, detect and correct potential misstatements on a timely basis. Cause: The Territory is currently working with the Federal Highway Administration to establish a quality assurance program, however it was not completed and implemented at year end. Effect: Potential noncompliance with grant requirements due to lack of monitoring controls and quality assurance in place, such as the control deficiencies noted in findings 2019-07. Questioned Costs: None Recommendation: The Territory should continue to work with the Federal Highway Administration to complete a plan for, and implement, a quality assurance program. View of responsible officials and corrective action plan: The Territory has submitted a DRAFT SOP for Electronic Project Billing, PR-20 that is currently in place for the States and is in testing phase for the Territories. American Samoa has successfully completed testing of this automation and is the 1st of the Territories to submit a draft of their proposed SOP. This was submitted on April 25th to our US Territory Representative. Our target date for completion is no later than 2 weeks from submission of our draft. The finalized SOP will then be sent to FHWA for final approval.

Finding 2019-06 Reporting Control Deficiencies in Internal Controls over Compliance; Noncompliance Federal Agency ? United States Department of Health and Human Services Federal Programs ? CFDA 93.575 Childcare Development Block Grant CFDA 93.778 Medical Assistance Program Criteria: The award agreement for the Childcare Development Block Grant states that the Territory submit the ACF-2018 QPR to the agency by December 31 for the preceding federal fiscal year (October 1-September 30). 42 CFR 430.30 (c)(1) states that the form CMS-64 reports required by the Medical Assistance Program be filed with the central office no later than 30 days after the end of each quarter. Condition and context: The ACF-2018 QPR report has not been filed for the preceding year to Health and Human Services. The CMS-64 quarterly reports filed with the central office were not filed in a timely manner. The second, third, and fourth quarters were filed after the required deadline. Cause: The Territory is working with the DHHS to finalize and submit the ACF-2018 QPR. The late filing of the quarterly CMS-64 reports was due to a lack of monitoring controls in place to ensure reporting compliance including the submission of reports in a timely manner. Effect: Noncompliance with reporting requirements of the Department of Health and Human Services. Questioned Costs: None Recommendation: We recommend that the Territory implement monitoring controls to ensure that all reporting requirements are met for all grants awarded. There should be sufficient staff in place and review procedures to timely file required reports in each department. View of responsible officials and corrective action plan: ASG agrees with this finding. The Treasury grant analysts will work closely with finance officers of both the Childcare Development Block grant and Medical Assistance Program to make certain reports are filed timely. Reminder emails will be sent to the departments at quarter end to file federal reports within the 30 day timeline.

Finding 2019-07 Activities Allowed or Un-Allowed / Allowable Costs / Cost Principles Control Deficiency in Internal Controls Federal Agencies ? United States Department of Agriculture United States Department of Transportation United States Department of Education United States Department of Health and Human Services United States Department of Homeland Security Federal Programs ? 10.551 Supplemental Nutrition Assistance Program 10.555 National School Lunch Program 20.106 Airport Improvement Program 20.205 Highway Planning and Construction 84.027 Special Education Grants to States 84.403 Consolidated Grant to Outlying Areas 93.575 Childcare Development Block Grant 93.600 Head Start 93.778 Medical Assistance Program 93.224 Centers Healthcare for the Homeless 97.042 Emergency Management Performance Grants 97.036 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) 97.039 Hazard Mitigation Grant Criteria: Proper internal controls over compliance include controls over review, grant analyst review and approval, Territory authorization of release of funds. Condition and context: It was noted in our testing of grant disbursements that the documentation retained for individual disbursements did not document one or more of the controls that should be in place for disbursements such as; lack of authorizing signature for release of funds, documentation of review and approval by grant analyst and department review and approval. Cause: Lack of oversight by management, insufficient review and approval procedures. Effect: The potential effect of the control deficiencies identified could allow significant grant expenditures to be paid that are not in compliance with activities allowed or allowable costs. Without proper review controls being followed, there is the increased risk of misappropriation of assets. Recommendation: We recommend that there are controls implemented or adjusted to ensure that the documentation for each grant disbursement contains the signature of each managing official signifying that they have reviewed and approved of the disbursement. Without an approving signature retained on original documentation it is assumed that the review or authorization did not take place. View of responsible officials and corrective action plan: ASG Treasury updated its policies and procedures to ensure documentation for each grant disbursement has the signature of the appropriate official to show they have been reviewed and approved for payment. Policies now state analysts initial AP vouchers after their review prior to preparing drawdown requests. In addition, all drawdown requests require the approving signature of the managing official whether the chief accountant, grant administrator or deputy treasurer.

Finding 2019-08 ? Federal Agency Review Significant Deficiency in Internal Controls over Compliance; Noncompliance Federal Agency ? United States Department of Agriculture Food and Nutritional Service Federal Program ? CFDA 10.555 ? National School Lunch Program Criteria: From the USDA?s Food & Nutritional Services (FNS) review conducted in March 2019 over fiscal year 2018, nine findings remain open. Condition and context: Within the USDA FNS report, issues or findings in the following areas were noted: ? Capital Expenditures & Management ? Civil Rights Training ? Civil Rights Complaint Procedures ? Inventory Management ? Meal Counting, Record Keeping ? Procurement ? Reporting, Audit Tracking ? Reporting, Allowable Costs ? Special Dietary Accommodations Cause: Insufficient training and oversight of program personnel with respect to program requirements may have contributed to the lack of compliance with program requirements. Effect: The Territory is not in compliance with the USDA Food & Nutritional Service Requirements. Questioned costs: None Recommendation: The Territory should continue to implement the corrective action provided by the USDA FNS in their report dated March 28, 2019. Views of responsible officials and corrective action plan: SLP has been working with USDA to clear the nine findings stated. Corrective actions were submitted and all standard operating procedures have been updated. Training for the new 2020 school was conducted in August 2019. The SLP is continuing to implement corrective action plan.

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