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Single Audit Report Fiscal Year Ended June 30, 2018

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Single Audit Report Fiscal Year Ended June 30, 2018 STATE OF UTAH _______ SINGLE AUDIT REPORT FISCAL YEAR ENDED JUNE 30, 2018 _______ Report No. 18-27 OFFICE OF THE STATE AUDITOR OFFICE OF THE STATE AUDITOR December 18, 2018 The Members of the Utah State Legislature The Honorable Gary R. Herbert, Governor, State of Utah We are pleased to submit the Single Audit Report of federal financial assistance for the State of Utah for the year ended June 30, 2018. The audit was conducted in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). This report contains the following: Our reports on compliance and on internal control, at the financial statement level and at the major federal program level, and on the Schedule of Expenditures of Federal Awards. The Schedule of Expenditures of Federal Awards. The Schedule of Findings and Questioned Costs, together with the views of responsible officials. Management’s corrective action plans. The Summary Schedule of Prior Audit Findings. The results of this report are critical since the State of Utah continues to have a heavy dependence on federal financial assistance, which amounted to $4.8 billion in federal expenditures and $1.4 billion in loans, loan guarantees, endowments, and nonmonetary assistance for the fiscal year ended June 30, 2018. The State of Utah’s Comprehensive Annual Financial Report for the year ended June 30, 2018 and our report thereon, dated December 5, 2018, have been issued under separate cover. We express our appreciation to the program and accounting personnel in the State agencies and institutions and the State Division of Finance who continue to do a good job of administering and accounting for the complexities of federal financial assistance. Sincerely, John Dougall State Auditor Utah State Capitol Complex, East Office Building, Suite E310 • Salt Lake City, Utah 84114-2310 • Tel: (801) 538-1025 • auditor.utah.gov (This page intentionally left blank) Single Audit Report State of Utah For the Year Ended June 30, 2018 TABLE OF CONTENTS Page INTRODUCTION 1 INDEPENDENT STATE AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 3 INDEPENDENT STATE AUDITOR’S REPORT ON: COMPLIANCE FOR EACH MAJOR PROGRAM INTERNAL CONTROL OVER COMPLIANCE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY UNIFORM GUIDANCE 5 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 Presented by Federal Agency: Research and Development Programs 10 Cluster Programs 63 Other Programs 71 Presented by State Agency: Primary Government 106 Component Units 124 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 186 SCHEDULE OF FINDINGS AND QUESTIONED COSTS: 195 Part I. Summary of Auditor’s Results 196 Part II. Findings Related to the Financial Statements 198 TYPE OF FINDING AND RELATED AUDITOR’S REPORT: Report on Compliance and on Internal Control Over Financial Reporting – Government Auditing Standards A. Material Weakness in internal control – basic financial statement level. B. Significant Deficiency of internal control – basic financial statement level. C. Material Noncompliance – basic financial statement level. D. Reportable instance of noncompliance or other matter – noncompliance with provisions of laws, regulations, contract, or grant agreements; fraud; or abuse. Federal Program State Agency Type Page 2018-001. Inadequate Internal Controls Over Uncollectible — Utah State B 198 Tax Estimates Used In Financial Reporting Tax Commission i Single Audit Report State of Utah For the Year Ended June 30, 2018 TABLE OF CONTENTS Part III. Findings and Questioned Costs for Federal Awards 199 TYPE OF FINDING AND RELATED AUDITOR’S REPORT: Report on Compliance and on Internal Control Over Compliance – Single Audit E. Material weakness in internal control – major program level. F. Significant deficiency in internal control – major program level. G. Material or possible material instance of noncompliance – major program level. H. Other finding or questioned cost required to be reported under section 200.516 of Uniform Guidance. Federal Program State Agency Type Page U.S. DEPARTMENT OF AGRICULTURE: 2018-002. Noncompliance with Subrecipient Monitoring Cooperative Forestry Natural Resources F,H 199 Requirements Assistance 2018-003. Noncompliance with Reporting Requirements Cooperative Forestry Natural Resources F,H 200 Assistance 2018-004. No Independent Review of Federal Reports and Cooperative Forestry Natural Resources F 201 Matching Requirements Assistance 2018-005. Inadequate Internal Controls Over Cash Draws Cooperative Forestry Natural Resources F 201 Assistance 2018-006. Inadequate Internal Controls Over Suspension and Cooperative Forestry Natural Resources F 202 Debarment Assistance 2018-007. Backdating of Transactions for Period of Cooperative Forestry Natural Resources F 203 Performance Assistance DEPARTMENT OF DEFENSE: 2018-008. Inadequate Internal Controls Over Suspension and National Guard Utah National Guard F 204 Debarment Military Operations and Maintenance (O&M) Projects U.S. DEPARTMENT OF EDUCATION: 2018-009. Inadequate Internal Controls Over Subrecipient Title I Grants to Local Utah State F,H 205 Monitoring Educational Agencies Board of Education 2018-010. Noncommunication of Pre-award Information to Title I Grants to Local Utah State F,H 206 Subrecipients Educational Agencies Board of Education 2018-011. No Verification of LEA Suspension and Debarment Title I Grants to Local Utah State F,H 207 Status Educational Agencies Board of Education ii Single Audit Report State of Utah For the Year Ended June 30, 2018 TABLE OF CONTENTS Part III. Findings and Questioned Costs for Federal Awards (continued) Federal Program State Agency Type Page U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES: 2018-012. Inadequate Internal Controls Over Subrecipient HIV Care Formula Health F,H 209 Determination and Monitoring Grants 2018-013. Inadequate Internal Controls Over Eligibility HIV Care Formula Health F,H 210 Grants 2018-014. Inadequate Internal Controls Over Preparation of Block Grants for Human Services F,H 212 SF-425 Reports for SAPT Prevention and Treatment of Substance Abuse 2018-015. Inadequate Internal Controls Over Preparation of Substance Abuse Human Services F,H 213 SF-425 Reports for SAMH Projects and Mental Health Services Projects of Regional and National Significance 2018-016. Inadequate Internal Controls Over CCDF Eligibility CCDF Workforce Services E,H 214 2018-017. Inadequate Internal Controls Over TANF Child TANF Workforce Services F,H 215 Support Non-cooperation 2018-018. Inadequate Internal Controls Over Reporting TANF Workforce Services F,H 216 U.S. DEPARTMENT OF INTERIOR: 2018-019. Internal Control Weaknesses Over Federal Reports Colorado River Basin Agriculture and E,H 218 Salinity Control Food 2018-020. Inadequate Internal Controls Over and Colorado River Basin Agriculture and F,H 219 Noncompliance with Allowable Payroll-Related Salinity Control Food Charges 2018-021. Internal Control Weaknesses and Noncompliance Colorado River Basin Agriculture and E,H 220 with Procurement, Suspension & Debarment, and Salinity Control Food Subrecipient Pre-award Requirements 2018-022. Failure to Monitor Subrecipient Single Audit Colorado River Basin Agriculture and F,H 221 Reports Salinity Control Food 2018-023. Error in Reimbursement Request Calculation Colorado River Basin Agriculture and F 222 Salinity Control Food 2018-024. Inadequate Controls Over Capital Asset Inventory Fish and Wildlife Natural Resources F,H 222 Cluster iii Single Audit Report State of Utah For the Year Ended June 30, 2018 TABLE OF CONTENTS Part III. Findings and Questioned Costs for Federal Awards (continued) Federal Program State Agency Type Page U.S. DEPARTMENT OF JUSTICE: 2018-025. Internal Control Deficiencies Over and Errors in Crime Victim Criminal and E,G 224 Financial & Performance Reporting, Matching, and Assistance Juvenile Justice Earmarking 2018-026. Inadequate Internal Controls and Noncompliance Crime Victim Criminal and E,G 227 with Subrecipient Monitoring Requirements Assistance Juvenile Justice 2018-027. Timing and Calculation Errors in Federal Cash Crime Victim Criminal and E,H 229 Draws Assistance Juvenile Justice 2018-028. No Allocation of Leave Balances Between Crime Victim Criminal and F 230 Activities Assistance Juvenile Justice 2018-029. Improper Crime Victim Compensation Crime Victim Criminal and E,H 231 Expenditures Compensation Juvenile Justice 2018-030. Internal Controls Over Federal Cash Management Crime Victim Criminal and E 234 Requirements Not Established Compensation Juvenile Justice 2018-031. Internal Control Deficiencies Over and Errors in Crime Victim Criminal and E,G 235 Financial & Performance Reporting Compensation Juvenile Justice 2018-032. Inadequate Internal Controls Over Period of Crime Victim Criminal and E,G 238 Performance Compensation Juvenile Justice VARIOUS FEDERAL AGENCIES: 2018-033. Working Capital Reserves in Excess of Federal Various Administrative Svcs H 239 Guidelines 2018-034. Working Capital Reserves in Excess of Federal Various Human Resource H 240 Guidelines Management 2018-035. Working Capital Reserves in Excess of Federal Various Technology H 241 Guidelines Services 2018-036. Working Capital Reserves in Excess of Federal Various Public Employees H 242 Guidelines Health Program 2018-037. Working Capital Reserves
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