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Office of the Auditor General State of Michigan Single Audit Report

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Office of the Auditor General State of Michigan Single Audit Report Office of the Auditor General State of Michigan Single Audit Report Fiscal Year Ended September 30, 2018 State of Michigan Auditor General Doug A. Ringler, CPA, CIA 000-0100-19 The auditor general shall conduct post audits of financial transactions and accounts of the state and of all branches, departments, offices, boards, commissions, agencies, authorities and institutions of the state established by this constitution or by law, and performance post audits thereof. The auditor general may make investigations pertinent to the conduct of audits. Article IV, Section 53 of the Michigan Constitution Report Summary Report Number: Single Audit Report 000-0100-19 State of Michigan Released: Fiscal Year Ended September 30, 2018 July 1, 2019 A single audit is designed to meet the needs of all financial report users, including an entity's federal grantor agencies. The audit determines if the financial statements are fairly presented, considers internal control over financial reporting and internal control over federal program compliance, determines compliance with requirements material to the financial statements, and assesses compliance with direct and material requirements of the major federal programs. Audit Results for the State's Basic Financial Statements Internal Control Over Financial Reporting No instances of Fairly presented, noncompliance or in all material respects 1 material weakness 10 significant deficiencies other matters required to be reported Audit Results for the Schedule of Expenditures of Federal Awards Fairly stated, in all material respects, in relation to the State's basic financial statements as a whole. Audit Results for the Federal Awards Internal Control Over Federal Total Known Compliance Findings Unmodified Qualified Adverse Awards Questioned Opinion Opinion Opinion Expended Costs (Net)* Material Significant Weaknesses Deficiencies $24.3 billion 9 programs 16 programs No programs $19,452,360 21 62 Number of findings repeated from the prior audit 13 27 *14 programs had questioned costs that were undeterminable. Identification of Major Federal Programs, Type of Opinion Issued on Compliance, Questioned Costs, and Audit Finding Numbers [(M) denotes a material weakness and/or material noncompliance finding]: Audit CFDA Questioned Finding Number(s) Name of Major Federal Program or Cluster Opinion Costs Number(s) 10.551 and 10.561 SNAP Cluster Qualified $26,687 known 2018-002 (M) plus an 2018-003 (M) undeterminable 2018-004 (M) amount 2018-005 2018-011 2018-012 2018-013 2018-019 2018-022 2018-023 2018-024 10.557 WIC Special Supplemental Nutrition Program for Women, Infants, Qualified $2,133,081 2018-008 and Children 2018-020 2018-025 2018-026 2018-027 (M) 10.558 Child and Adult Care Food Program Unmodified $0 2018-009 2018-010 2018-028 12.401 National Guard Military Operations and Maintenance (O&M) Qualified $4,044,479 2018-022 Projects 2018-029 (M) 2018-030 (M) 2018-031 (M) 2018-032 (M) 2018-033 2018-034 2018-035 2018-036 2018-037 20.205 and 20.219 Highway Planning and Construction Cluster Unmodified $0 2018-022 2018-038 84.010 Title I Grants to Local Educational Agencies Unmodified $0 2018-009 2018-010 2018-021 2018-039 2018-040 84.032 G/L Federal Family Education Loans - Guaranty Agency and Lender Unmodified $0 Not applicable 84.126 Rehabilitation Services - Vocational Rehabilitation Grants to States Qualified Undeterminable 2018-011 2018-012 2018-013 2018-019 (M) 2018-022 2018-041 (M) 2018-042 93.044, 93.045, and Aging Cluster Qualified Undeterminable 2018-011 93.053 2018-012 2018-013 2018-019 (M) 2018-043 93.558 TANF Cluster (continued on next page) Qualified $24,317 known 2018-001 plus an 2018-002 (M) undeterminable 2018-003 (M) amount 2018-004 (M) 2018-006 2018-011 2018-012 2018-013 2018-019 (M) 2018-022 2018-044 (M) Audit CFDA Questioned Finding Number(s) Name of Major Federal Program or Cluster Opinion Costs Number(s) 93.558 TANF Cluster (continued) 2018-045 (M) 2018-046 2018-047 2018-048 (M) 2018-049 2018-050 93.575 and 93.596 CCDF Cluster Qualified Undeterminable 2018-001 2018-002 (M) 2018-003 (M) 2018-009 2018-010 2018-011 2018-012 2018-013 2018-021 (M) 2018-051 (M) 2018-052 2018-053 93.775, 93.777, and Medicaid Cluster Qualified $2,442,388 2018-001 93.778 known plus an 2018-002 (M) undeterminable 2018-003 (M) amount 2018-004 (M) 2018-005 2018-007 2018-011 2018-012 2018-013 2018-014 2018-015 2018-016 2018-017 2018-022 2018-054 2018-055 2018-056 (M) 2018-057 2018-058 2018-059 2018-060 2018-061 2018-062 2018-063 2018-064 2018-065 93.268 Immunization Cooperative Agreements Qualified $0 2018-008 2018-019 (M) 2018-066 2018-067 2018-068 93.563 Child Support Enforcement Qualified Undeterminable 2018-005 2018-011 2018-012 2018-013 2018-019 (M) 93.568 Low-Income Home Energy Assistance Qualified $10,672,356 2018-002 (M) known plus an 2018-003 (M) undeterminable 2018-011 amount 2018-012 2018-013 2018-019 (M) 2018-022 2018-069 (M) 2018-070 (M) Audit CFDA Questioned Finding Number(s) Name of Major Federal Program or Cluster Opinion Costs Number(s) 93.658 Foster Care - Title IV-E Qualified $2,967 known 2018-001 plus an 2018-005 undeterminable 2018-006 amount 2018-011 2018-012 2018-013 2018-018 2018-019 (M) 2018-022 2018-071 2018-072 93.659 Adoption Assistance Qualified $100,393 known 2018-001 plus an 2018-005 undeterminable 2018-006 amount 2018-011 2018-012 2018-013 2018-019 (M) 2018-022 2018-073 2018-074 (M) 2018-075 93.667 Social Services Block Grant Qualified $671 known 2018-001 plus an 2018-006 undeterminable 2018-011 amount 2018-012 2018-013 2018-018 2018-019 (M) 2018-022 93.767 Children's Health Insurance Program Qualified $456 known 2018-002 (M) plus an 2018-003 (M) undeterminable 2018-007 amount 2018-011 2018-012 2018-013 2018-014 (M) 2018-015 2018-016 2018-017 2018-022 2018-076 2018-077 93.959 Block Grants for Prevention and Treatment of Substance Abuse Qualified Undeterminable 2018-008 2018-011 2018-012 2018-013 2018-019 (M) 2018-020 2018-078 2018-079 (M) 2018-080 96.001 Disability Insurance/SSI Cluster Unmodified Undeterminable 2018-011 2018-012 2018-013 2018-019 2018-022 97.039 Hazard Mitigation Grant Unmodified $0 Not applicable Major Federal Programs Audited by Others Audit CFDA Questioned Finding Number(s) Name of Major Federal Program or Cluster Opinion Costs Number(s) 14.871 and 14.879 Housing Voucher Cluster Unmodified $0 Not Applicable 17.225 Unemployment Insurance, including ARRA Unmodified $0 2018-082 2018-083 2018-084 2018-085 84.412 Race to the Top - Early Learning Challenge Unmodified $0 2018-009 2018-010 Findings Related to Non-Major Programs Audit CFDA Questioned Finding Number(s) Name of Major Federal Program or Cluster Opinion Costs Number(s) 97.091 Homeland Security Biowatch Program Not Applicable $4,565 2018-081 Office of the Auditor General 201 N. Washington Square, Sixth Floor Obtain Audit Reports Lansing, Michigan 48913 Online: audgen.michigan.gov Doug A. Ringler, CPA, CIA Phone: (517) 334-8050 Auditor General Laura J. Hirst, CPA Deputy Auditor General Doug A. Ringler, CPA, CIA Auditor General 201 N. Washington Square, Sixth Floor • Lansing, Michigan 48913 • Phone: (517) 334-8050 • audgen.michigan.gov July 1, 2019 Mr. Chris Kolb, State Budget Director State Budget Office George W. Romney Building Lansing, Michigan Dear Mr. Kolb: This is our single audit report for the State of Michigan for the fiscal year ended September 30, 2018. Our findings and recommendations are contained in Section II and Section III of the schedule of findings and questioned costs. Management's corrective action plan is included within the auditee section of this report. The Michigan Compiled Laws and administrative procedures require an audited agency to develop a plan to comply with the recommendations and to submit it to the State Budget Office upon completion of an audit. Within 30 days of receipt, the Office of Internal Audit Services, State Budget Office, is required to review the plan and either accept the plan as final or contact the agency to take additional steps to finalize the plan. We appreciate the courtesy and cooperation extended to us during this audit. Sincerely, Doug Ringler Auditor General Michigan Office of the Auditor General 000-0100-19 Michigan Office of the Auditor General 8 000-0100-19 TABLE OF CONTENTS STATE OF MICHIGAN SINGLE AUDIT REPORT Page INTRODUCTION Report Summary 1 Report Letter 7 SUPPLEMENTAL FINANCIAL SCHEDULE Schedule of Expenditures of Federal Awards 16 Notes to the Schedule of Expenditures of Federal Awards 32 INDEPENDENT AUDITOR'S REPORT Independent Auditor's Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 38 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I: Summary of Auditor's Results 46 Section II: Findings Related to the Financial Statements and Schedule of Expenditures of Federal Awards 47 Section III: Findings and Questioned Costs Related to Federal Awards 48 2018-001 Access Limitations for Confidential Information in SIGMA 48 2018-002 Bridges Interface and Change Controls 50 2018-003 Bridges Security Management and Access Controls 54 2018-004 Income Eligibility and Verification System 58 2018-005 ADP Security Program 62 2018-006 MiSACWIS Security Management and Access Controls 65 2018-007 CHAMPS Security Management and Access Controls 68 2018-008 EGrAMS Security Management and Access Controls 70 2018-009 MDE, IT General Controls 71 Michigan Office of the Auditor General 9 000-0100-19 2018-010 MDE, IT Security
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