State of Arizona June 30, 2007 Report Highlights - Single Audit

Office Of The Auditor General

Informations

• Publié par: Shyot
• Nombre de lectures: 15
• Langue: English

Extrait

State of Arizona
Single Audit Report
REPORT
HIGHLIGHTS Expenditures of Federal Monies
SINGLE AUDIT
Increased by $365 Million
Subject
The State of Arizona spent $9.7
billion of federal monies for
federal programs During fiscal year 2007, the State
administered, by 46 state State Agencies that Administer Federal Awardsspent $9.7 billion of federal monies.
agencies. The largest awards (In Millions)As shown in the chart to the right,were for welfare, education,
seven entities administered 97student financial aid, highway
percent of these monies.construction, research and Health Services
development, and health $325
Water Infrastructure Other Agenciesservices. The State must be Overall, expenditures increased Finance Authority $337 accountable for its use of both
$245 $365 million, or 4 percent, from the
federal and state monies, Transportation$9.4 billion expended in fiscal yearmaintaining strong internal $407
2006. The largest increasecontrols, and compliance with
Educationfederal program requirements. occurred in programs for indigent
$898
AHCCCSmedical care, child nutrition and
Our Conclusion $4,727unemployment insurance.
Universities
Combined expenditures for theseDuring the compliance audit, $993
programs increased by $359 million27 federal programs were
tested. The State maintained from the prior year. This increase
Economic Securityadequate internal controls over, was attributable to inflationary $1,800 and complied with, the federal increases in healthcare and food
compliance requirements for 5
costs, and increases inof the 27 federal programs
unemployment payments. The Federal Programs Expenditurestested. However, for 22 federal
Fiscal Years 2005-2007programs tested, auditors largest increase, $305 million,
found that the State did not occurred in federal monies
maintain adequate internal expended for indigent medical care
$11,000controls or comply with one or by the Arizona Health Care Cost
$9,732 more of the compliance $10,000
$9,367Containment System. As shown in $9,014requirements. In addition,
$9,000the graph to the right, expendituresauditors identified 42
$8,000deficiencies in internal control of federal monies have increased
over financial reporting. See $7,000$718 million between fiscal years
pages 2 through 4 for further 2005 and 2007. Expenditures for $6,000information.
indigent medical care, education, $5,000
child nutrition, and food stamps
$4,000
accounted for $656 million of the
$3,000
increase.
$2,000
$1,000
$02007
2005 2006 2007
Year Ended June 30, 2007
(In Millions)The State Did Not Always Comply
with Federal Program Requirements
Auditors identified and tested 27 federal on federal compliance was modified because
programs, including 11 program clusters, of noncompliance with federal requirements
under the guidelines established by the Single for the following programs: Food Stamp
Audit Act. Audit tests included evaluating the Cluster, Child Nutrition Cluster, Child and Adult
State’s compliance with each program’s Care Food Program, Emergency Food
federal regulations generally related to Assistance Cluster, WIA Cluster, Special
expending, monitoring, matching, and Education Cluster (IDEA), Title I Grants to
reporting federal awards. Auditors noted Local Educational Agencies, Migrant
internal control weaknesses and instances of Education—State Grant Program,
noncompliance with program requirements for Rehabilitation Services—Vocational
22 of the programs tested (see table below). Rehabilitation Grants to States, Reading First
For 15 of the 22 programs, the internal control State Grants, Improving Teacher Quality State
weaknesses and instances of noncompliance Grants, Temporary Assistance for Needy
with program requirements were considered Families (TANF), Foster Care—Title VI-E,
to be material. As a result, our audit opinion Urban Areas Security Initiative, and Homeland
Security Grant Program Cluster.
Summary of Internal Control Weaknesses and Instances of Noncompliance for Major Federal Programs

Type of Compliance Requirement
1 2 3 4 5 6 7 8 9Program Responsible Department Activities Cash Costs Eligibility Match Monitor Report Special Procurement
Child Support Enforcement Economic SecurityX X X
Emergency Food Asst. Economic Security X
Food Stamp Cluster Economic Security X X
Foster Care—Title IV-E Economic Security X X
SSBG Economic SecurityX X
RS EconomicSecurity X X
SSDIonomicSecurity X
TANF EconomicSecurity X X
Unemployment Insurance Economic SecurityX XX
WIA Cluster Economic Security X X
CACFP Education X X
Child Nutrition Cluster Education X X X X X
Improving Teacher Quality Education XX X X
Migrant Education Educatio X X X
Reading First Education X X
Special Education Cluster Education X X X X X
Title I Grants Education X X X X
WIC Health Services X
CDCPalthServicesX
Homeland Security ClusterMilitary Affairs XX X
Urban Areas Security Military Affairs X X X
Research & Development Universities X

SSBG – Social Services Block Grant
RS – Rehabilitation Services—Vocational Rehabilitation Grants to States
SSDI – Social Security—Disability Insurance
TANF – Temporary Assistance for Needy Families
CACFP – Child and Adult Care Food Program
WIC – Special Supplemental Nutrition Program for Women, Infants, and Children
CDCP – Centers for Disease Control and Prevention—Investigations and Technical Assistance

1Activities: Federal monies were expended for unallowable activities.
2Cash: Federal monies requested and received were in excess of, or not sufficient for, immediate program needs.
3Costs: Federal monies were expended for unallowable costs.
4Eligibility: Benefits were awarded to ineligible participants.
5Match: Federal monies were not matched with state monies or a specified level of service was not maintained.
6Monitor: Subrecipients were not monitored to ensure they administered awards in compliance with federal requirements.
7Report: Financial or program data reported to federal grantors was not accurate or timely.
8Special: Noncompliance with special requirements unique to the program.
9Procurement: Noncompliance with procurement and suspension and debarment requirements.
page2The Department of Economic Security
Did Not Materially Comply with Program
Requirements for Six Programs
The Department of Economic Security receives • The Division of Benefits and Medical Eligibility,
Family Assistance Administration offices didfederal monies to help administer assistance
not comply with activities allowed orprograms to recipients throughout the State of
unallowed, allowable costs/cost principles,Arizona. For the period of July 1, 2006 through
and eligibility requirements for the TANFJune 30, 2007, the Department received almost
program, since it did not always follow the$1.8 billion in federal financial assistance.
internal control policies and procedures forHowever, for the audit period, the Department activating and issuing EBT cards. This
did not materially comply with federal resulted in known questioned costs of $2,127.
requirements for six of its programs tested. Our • The Division of Employment and Rehabilitation
report indicates the following programs had Services, Rehabilitation Services
material internal control weaknesses and Administration did not comply with eligibility
material instances of noncompliance with federal requirements for the Rehabilitation Services—
requirements: Vocational Rehabilitation Grants to States
program.
• The Division of Children, Youth, and Families• The Division of Benefits and Medical Eligibility,
did not comply with activities allowed orFamily Assistance Administration offices did
unallowed and allowable costs/cost principlesnot comply with special tests and provisions
requirements for the Foster Care—Title IV-Erequirements for the Food Stamp Cluster, as it
program. These instances of noncompliancedid not always follow the internal control
resulted in a questioned cost of approximatelypolicies and procedures for activating and
$4,615,756. issuing electronic benefits transfer (EBT)
• The Division of Employment and Rehabilitationcards. In addition, three employees
Services did not comply with suspension andmanipulated the eligibility verification system
debarment requirements for the WIA Cluster.to issue EBT cards for personal use. This
• The Office of Community Partnerships andresulted in known questioned costs of
Innovative Practices did not comply with$75,185. The Department referred these
subrecipient monitoring requirements for thematters to the Arizona Attorney General’s
Emergency Food Assistance Cluster.Office for further investigation and
prosecution.
The Department of Education Did Not
Materially Comply with Subrecipient
Monitoring Requirements
The Department of Education expended Department’s Audit Unit is responsible for
approximately $898 million in federal awards on obtaining and reviewing the single audit reports
various education and assistance programs from charter schools and school districts that
during the fiscal year. Most of these federal expend more than $500,000 in federal awards.
awards are passed through to charter schools However,