Full text
OFFICE OF
INSPECTOR GENERAL
DEPARTM ENT OF THE TREASURY
WASHINGTON, D.C. 20220
March 28, 2023
MEMORANDUM FOR MR. JACOB LEIBENLUFT, CHIEF RECOVERY OFFICER
FROM:
Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT:
Desk Review of Fort McDermitt Paiute-Shoshone Tribe’s
Use of Coronavirus Relief Fund Proceeds
(OIG-CA-23-011)
Please find the attached desk review memorandum1 on Fort McDermitt Paiute-
Shoshone Tribe’s (FMPST) use of Coronavirus Relief Fund (CRF) proceeds. The
CRF is authorized under Title VI of the Social Security Act, as amended by Title V,
Division A of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Under a contract monitored by our office, Castro & Company, LLC (Castro), a
certified independent public accounting firm, performed the desk review. Castro
performed the desk review in accordance with the Council of the Inspectors
General on Integrity and Efficiency, Quality Standards for Federal Offices of
Inspector General.
In its desk review of FMPST, Castro found that FMPST personnel were late in
filing, or missed filing, required quarterly grant reports. In addition, in some cases,
documentation provided to Castro for expenditures did not agree with amounts
reported in the quarterly reports. Specifically, documentation for allowable
expenditures was provided, but the costs had not been entered into the grants
reporting portal. Castro and Treasury Office of Inspector General (OIG) met with
FMPST management to discuss quarterly reporting requirements.
Based on these issues, Castro determined that the risk of unallowable use of
funds was moderate. With that said, Castro reviewed documentation for a sample
of 21 transactions reported in the quarterly reports and found that the transactions
were adequately supported and the use of CRF proceeds complied with the
CARES Act and Treasury Guidance. Castro is not recommending Treasury OIG
perform an audit of the FMPST. However, Castro recommends that Treasury OIG
1 The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) assigned the Department of
the Treasury Office of Inspector General with responsibility for compliance monitoring and
oversight of the receipt, disbursement, and use of Coronavirus Relief Fund (CRF) payments. The
purpose of the desk review is to perform monitoring procedures of the prime recipient’s receipt,
disbursement, and use of CRF proceeds as reported in the GrantSolutions portal on a quarterly
basis.
Page 2
follow up with FMPST personnel to ensure that FMPST resolves the issues with
unrecorded transactions in future reporting cycles.
In addition to the work performed by Castro, Treasury OIG reviewed the status of
FMPST’s Single Audit Reports included in the Federal Audit Clearinghouse and
found that FMPST personnel had not filed Single Audit Reports for FY 2020 and
FY 2021 as required2 of non-Federal entities that expend $750,000 or more in
Federal awards during their fiscal year. This issue will also need to be addressed
by FMPST personnel before final closeout of the tribe’s CRF award.
In connection with the contract, we reviewed Castro’s desk review memorandum
and related documentation and inquired of its representatives. Our review, as
differentiated from an audit performed in accordance with generally accepted
government auditing standards, was not intended to enable us to express an
opinion on FMPST’s use of the CRF proceeds. Castro is responsible for the
attached desk review memorandum and the conclusions expressed therein. Our
review found no instances in which Castro did not comply in all material respects,
with quality standards for Federal Offices of Inspector General.
We appreciate the courtesies and cooperation provided to Castro and our staff
during the desk review. If you have any questions or require further information,
please contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, Deputy Assistant Inspector General for Audit, at (202) 487-8371.
Attachment
cc:
Michelle. A. Dickerman, Deputy Assistant General Counsel, Department of
the Treasury
Victoria Collin, Chief Compliance & Finance Officer, Office of Recovery
Programs, Department of the Treasury
Valerie Barr, Fort McDermitt Paiute-Shoshone Tribe Finance Director
Wayne Ference, Partner, Castro & Company, LLC
2 2 C.F.R. § 200.501 (b) A non-Federal entity that expends $750,000 or more during the non-Federal
entity's fiscal year in Federal awards must have a single audit conducted in accordance with 2
C.F.R. § 200.514.
Desk Review of the Fort McDermitt Paiute-Shoshone Tribe
1
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
March 28, 2023
OIG-CA-23-011
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM:
Wayne Ference
Partner, Castro & Company, LLC
SUBJECT:
Desk Review of the Fort McDermitt Paiute-Shoshone Tribe
On September 2, 2021, we initiated a desk review of the Fort McDermitt Paiute-
Shoshone Tribe’s (FMPST) use of the Coronavirus Relief Fund (CRF) authorized
under Title VI of the Social Security Act, as amended by Title V, Division A of the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act).1 The objective of
our desk review was to evaluate the FMPST’s documentation supporting its uses
of CRF proceeds as reported in the GrantSolutions2 portal and to assess the risk of
unallowable use of funds. The scope of our desk review was limited to obligation
and expenditure data for the period of March 1, 2020 through June 30, 2021, as
reported in Cycles 1 through 5 in the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed the FMPST’s quarterly Financial Progress Reports (FPRs)
submitted in the GrantSolutions portal through June 30, 2021;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 2021;3
3) reviewed Treasury Office of Inspector General (OIG) Coronavirus Relief
Fund Frequently Asked Questions Related to Reporting and Recordkeeping;4
1 P.L. 116-136 (March 27, 2020)
2 GrantSolutions, a grant and program management Federal shared service provider under the U.S.
Department of Health and Human Services, developed a customized and user-friendly reporting
solution to capture the use of CRF payments from recipients.
3 Coronavirus Relief Fund Guidance as published in the Federal Register (January 15, 2021)
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf
4 Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping OIG-20-028R; March 2, 2021
Desk Review of the Fort McDermitt Paiute-Shoshone Tribe
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4) reviewed Treasury OIG’s monitoring checklists5 of the FMPST’s quarterly
FPR submissions for reporting deficiencies;
5) reviewed other audit reports issued, such as Single Audit reports, and those
issued by the Government Accountability Office and other applicable
Federal agency OIGs for internal control or other deficiencies that may pose
risk or impact the FMPST’s uses of CRF proceeds;
6) reviewed Treasury OIG Office of Investigations, the Council of the
Inspectors General on Integrity and Efficiency Pandemic Response
Accountability Committee (PRAC),6 and Treasury OIG Office of Counsel
input on issues that may pose risk or impact the FMPST’s uses of CRF
proceeds;
7) interviewed key personnel responsible for preparing and certifying the
FMPST’s GrantSolutions portal quarterly FPR submissions, as well as
officials responsible for obligating and expending CRF proceeds;
8) made a non-statistical selection of aggregate reporting data7 and aggregate
payments to individuals,8 identified through GrantSolutions reporting; and
9) evaluated documentation and records used to support the FMPST’s
quarterly FPRs.
Based on the results of our desk review we found that FMPST personnel were late
in filing, or missed filing, required quarterly FPRs in the GrantSolutions portal. In
addition, in some cases, documentation provided to us for expenditures did not
agree with amounts reported in the GrantSolutions portal. Specifically,
documentation for allowable expenditures was provided, but the costs had not
been entered into the GrantSolutions portal. Based on these issues, we
determined that the risk of unallowable use of funds was moderate. With that
5 The checklists are used by the Treasury OIG to monitor the progress of prime recipient reporting
in the GrantSolutions portal. GrantSolutions quarterly submission reviews are designed to identify
material omissions and significant errors, and where necessary, include procedures for notifying
prime recipients of misreported data for timely correction. Treasury OIG follows the CRF Prime
Recipient Quarterly GrantSolutions Submissions Monitoring and Review Procedures Guide, OIG-
CA-20-029R to monitor the prime recipients quarterly.
6 Section 15010 of P.L. 116-136 established the Pandemic Response Accountability Committee
within the Council of the Inspectors General on Integrity and Efficiency to promote transparency
and conduct and support oversight of covered funds (see Footnote 13 for a definition of covered
funds) and the coronavirus response to (1) prevent and detect fraud, waste, abuse, and
mismanagement; and (2) mitigate major risks that cut across program and agency boundaries.
7 Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in the
GrantSolutions portal. Transactions less than $50,000 can be reported as an aggregate lump-sum
amount by type (contracts, grants, loans, direct payments, and transfers to other government
entities).
8 Obligations and expenditures for payments made to individuals, regardless of amount, are
required to be reported in the aggregate in the GrantSolutions portal to prevent inappropriate
disclosure of personally identifiable information.
Desk Review of the Fort McDermitt Paiute-Shoshone Tribe
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said, we reviewed documentation for a selection of 21 transactions reported in
the GrantSolutions portal and found that the transactions were adequately
supported and the use of CRF proceeds complied with the CARES Act and
Treasury’s Guidance. Castro is not recommending Treasury OIG perform an audit
of the FMPST. However, we recommend that Treasury OIG follow up with FMPST
personnel to ensure that FMPST resolves the issues with unrecorded transactions
in future reporting cycles.
Non-Statistical Transaction Selection Methodology
Castro made a non-statistical selection of Aggregate Reporting less than $50,000,
and Aggregate Payments to Individuals. Selections were made using auditor
judgment based on information and risks identified in reviewing audit reports, the
GrantSolutions portal reporting anomalies9 identified by the Treasury OIG CRF
monitoring team, and review of the FMPST’s FPR submissions. Castro noted the
FMPST did not obligate or expend CRF proceeds related to Contracts greater than
or equal to $50,000, Grants greater than or equal to $50,000, Loans greater than or
equal to $50,000, Transfers greater than or equal to $50,000,10 or Direct Payments
greater than or equal to $50,000; therefore, we did not make a selection of
transactions from these categories.
The number of transactions (21) we selected to test were based on the FMPST’s
total CRF award amount and our overall risk assessment of the FMPST. To
allocate the number of transactions (21) by obligation type (Aggregate Reporting
less than $50,000 and Aggregate Payments to Individuals), we compared the
obligation type dollar amounts as a percentage of cumulative obligations for
Cycle 5.11
Background
The CARES Act appropriated $150 billion to establish the CRF. Under the CRF,
Treasury made payments for specified uses to States; eligible units of local
governments; the District of Columbia; U.S. Territories, including the
Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands; and Tribal
governments. Treasury issued a CRF payment to the FMPST for $6,978,459.32.
9 Treasury OIG has a pre-defined list of risk indicators that are triggered based on data submitted
by recipients in the FPR submissions that meet certain criteria. Castro reviewed these results
provided by Treasury OIG for the FMPST.
10 A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
11 Calendar Quarter ending June 30, 2021
Desk Review of the Fort McDermitt Paiute-Shoshone Tribe
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The CARES Act stipulates that a recipient may only use the funds to cover costs
that—
(1) are necessary expenditures incurred due to the public health emergency
with respect to the coronavirus disease 2019 (COVID-19);
(2) were not accounted for in the budget most recently approved as of
March 27, 2020; and
(3) were incurred between March 1, 2020 and December 31, 2021.12
Section 15011 of the CARES Act, requires each covered recipient13 to submit to
Treasury and the PRAC, no later than 10 days after the end of each calendar
quarter, a report that contains (1) the total amount of large covered funds14,15
received from Treasury; (2) the amount of large covered funds received that were
expended or obligated for each project or activity; (3) a detailed list of all projects
or activities for which large covered funds were expended or obligated; and (4)
detailed information on any level of subcontracts or subgrants awarded by the
covered recipient or its subcontracts or subgrantees.
The CARES Act assigned Treasury OIG the responsibility for compliance
monitoring and oversight of the receipt, disbursement, and use of CRF proceeds.
Treasury OIG also has the authority to recoup funds in the event that it is
determined a recipient failed to comply with requirements of subsection 601(d) of
the Social Security Act, as amended, (42 U.S.C. 801(d)).
Desk Review Results
During our review of FMPST’s quarterly FPR submissions through June 30, 2021,
we found missing and late FPR submissions. In addition, we identified a reporting
variance between the amount reported for expenditures in the GrantSolutions
portal and FMPST’s supporting documentation.
12 P.L. 116-260 (December 27, 2020). The period of performance end date of the CRF was extended
through December 31, 2021 by the Consolidated Appropriations Act, 2021. The period of
performance end date for tribal entities was further extended to December 31, 2022 by the State,
Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act,
Division LL of the Consolidated Appropriations Act, 2023, P.L. 117-328, December 29, 2022, 136
Stat. 4459.
13 Section 15011 of P.L. 116-136 defines a covered recipient as any entity that receives large covered
funds and includes any State, the District of Columbia, and any territory or possession of the United
States.
14 Section 15010 of P.L. 116-136 defines covered funds as any funds, including loans, that are made
available in any form to any non-Federal entity, not including an individual, under Public Laws 116-
123, 127, and 136, as well as any other law which primarily makes appropriations for Coronavirus
response and related activities.
15 Section 15011 of P.L. 116-136 defines large covered funds as covered funds that amount to more
than $150,000.
Desk Review of the Fort McDermitt Paiute-Shoshone Tribe
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Quarterly Financial Progress Reports are required to be submitted by the 10th day
of the month following quarter end unless it falls on a holiday. Based on our
review of the quarterly FPRs, we determined the FMPST to be noncompliant with
the Reporting Timeline as required under Treasury OIG’s Guidance OIG-A-20-021,
Coronavirus Relief Fund Reporting and Record Retention Requirements. FMPST
completed a FPR for Cycle 4;16 however, they did not complete FPRs for Cycles 1,
2, 3, and 5.17,18,19,20.
The FMPST staff told us that their Tribal Council was not monitoring the quarterly
reporting until December 2020 when a new Chairwoman took over. After the Cycle
4 reporting was completed, the FMPST staff experienced technical issues with
their network and accounting software. According to the FMPST staff, an external
specialist reported that the issues stemmed from inadequate hardware being used
on the network. The FMPST personnel ordered new computers to help alleviate
the issues. Additionally, on November 8, 2021, FMPST’s software consultant
discovered a user had logged in as an administrator and accidentally restored an
older backup with old passwords and other settings. This caused a loss of data
previous to November 8, 2021, and the consultant had to reset the administrative
controls. The FMPST staff told us that since that time the technical issues have
been resolved.
We noted a variance of $3,568,690 between the zero expenditures the FMPST
personnel reported within the GrantSolutions portal as of June 30, 2021, and the
$3,568,690 amount expended based on supporting documentation provided to us.
The FMPST staff explained that this variance was due to a lack of proper
monitoring and reporting of GrantSolutions data. The FMPST personnel informed
us that they planned to correct the variance within future GrantSolutions reporting
cycles; however, the correction had not been completed as of Cycle 9.21
Transactions selected for detailed review were supported by documentation and
were allowable expenditures in accordance with the CARES Act and Treasury’s
guidance. We noted that the tested aggregate reporting less than $50,000 and
aggregate payments to individuals, were necessary expenditures due to the
COVID-19 public health emergency, were not accounted for in the budget most
recently approved as of March 27, 2020, and were incurred during the covered
16 Calendar Quarter ending March 31, 2021
17 Calendar Quarter ending June 30, 2020
18 Calendar Quarter ending September 30, 2020
19 Calendar Quarter ending December 31, 2020
20 Calendar Quarter ending June 30, 2021
21 Calendar Quarter ending June 30, 2022
Desk Review of the Fort McDermitt Paiute-Shoshone Tribe
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period. The transactions selected for testing were not selected statistically, and
therefore results cannot be extrapolated to the total universe of transactions.
*****
Conclusion
Based on the results of our desk review we found that FMPST personnel were late
in filing, or missed filing, required quarterly FPRs in the GrantSolutions portal. In
addition, in some cases, documentation provided for expenditures did not agree
with amounts reported in the GrantSolutions portal. Specifically, documentation
for allowable expenditures was provided to us, but the costs had not been entered
into the GrantSolutions portal. Based on these issues, we determined that the risk
of unallowable use of funds was moderate. With that said, we reviewed
documentation for a selection of 21 transactions reported in GrantSolutions and
found that the transactions were adequately supported and the use of CRF
proceeds complied with the CARES Act and Treasury’s Guidance. Castro is not
recommending Treasury OIG perform an audit of the FMPST. However, we
recommend that Treasury OIG follow up with FMPST personnel to ensure that
FMPST resolves the issues with unrecorded transactions in future reporting
cycles.
All work completed with this letter complies with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Federal Offices of
Inspectors General, which require that the work adheres to the professional
standards of independence, due professional care, and quality assurance to
ensure the accuracy of the information presented.22 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
22https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf