Full text
OFFICE OF
INSPECTOR GENERAL
DEPARTM ENT OF THE TREASURY
WASHINGTON, D.C. 20220
July 28, 2023
MEMORANDUM FOR JESSICA MILANO, ACTING CHIEF RECOVERY OFFICER,
DEPARTMENT OF THE TREASURY
FROM:
Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT:
Desk Review of Native Village of Point Hope’s Use of
Coronavirus Relief Fund Proceeds (OIG-CA-23-038)
Please find the attached desk review memorandum1 on Native Village of Point
Hope’s (Point Hope) 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 standards of independence, due professional care, and quality
assurance.
Due to Point Hope personnel’s failure to communicate or provide documentation
during the desk review, Castro was unable to make a non-statistical selection of
the Direct Payments greater than $50,000, Aggregate Reporting less than $50,000,2
and Aggregate Payments to Individuals3 data identified in the grants portal. Castro
determined that the lack of documentation created a scope limitation and they
were unable to evaluate the documentation and records used to support Point
Hope’s quarterly Financial Progress Reports (FPR).
Castro could not determine if Point Hope’s use of CRF proceeds complies with the
CARES Act and Department of the Treasury’s (Treasury) Guidance. Therefore,
Castro questions the entire $2,348,063.69 in CRF proceeds that Point Hope
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 grants portal on a quarterly basis.
2 Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in the
grants 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).
3 Obligations and expenditures for payments made to individuals, regardless of amount, are
required to be reported in the aggregate in the grants portal to prevent inappropriate disclosure of
personally identifiable information.
Page 2
received from Treasury and concludes that Point Hope’s risk of unallowable use of
funds is high. As such, Castro recommends that Treasury Office of Inspector
General (OIG) personnel follow-up on the missing documentation and make a
determination whether to conduct a full-scope audit of Point Hope. In addition,
Castro recommends that Treasury OIG determines whether to take further action,
up to and including recoupment of Point Hope’s CRF proceeds, based on the
scope limitation and potential noncompliance with the records retention
requirement. Castro and Treasury OIG met with Point Hope management to
discuss the questioned costs and reporting issues. Point Hope management stated
that they would like an opportunity to provide Treasury OIG documentation to
support the questioned costs and update reporting.
Treasury OIG personnel noted that Point Hope has not filed any of its required
Single Audit reports for fiscal years 2020, 2021, or 2022. We will work with
Treasury’s Office of Recovery Programs and Point Hope personnel to determine
the status of the Single Audit reports.
In connection with our contract with Castro, 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 Point Hope’s use of 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 the Quality Standards for Federal Offices of Inspector General.
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.
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
Christopher Sun, Director of Data and Reporting, Office of Recovery
Programs, Department of the Treasury
Adela Lane, Acting Executive Director, Native Village of Point Hope
Wayne Ference, Partner, Castro & Company, LLC
Page 3
Attachment
Schedule of Monetary Benefits
According to the Code of Federal Regulations,4 a questioned cost is a cost that is
questioned due to a finding:
(a) which resulted from a violation or possible violation of a statute,
regulation, or the terms and conditions of a Federal award, including for
funds used to match Federal funds;
(b) where the costs, at the time of the review, are not supported by
adequate documentation; or
(c) where the costs incurred appear unreasonable and do not reflect the
actions a prudent person would take in the circumstances.
Questioned costs are to be recorded in the Department of the Treasury’s
(Treasury) Joint Audit Management Enterprise System (JAMES).5 The amount will
also be included in the Office of Inspector General (OIG) Semiannual Report to
Congress. It is Treasury management's responsibility to report to Congress on the
status of the agreed to recommendations with monetary benefits in accordance
with 5 USC Section 405(b) of the Inspector General Act of 1978.
Recommendation
Questioned Costs
Recommendation No. 1
$2,348,063.69
The questioned cost represents amounts provided by Treasury under the
Coronavirus Relief Fund. As discussed in the attached desk review, $2,348,063.69
is Point Hope’s expenditures reported in the grant-reporting portal that lacked
supporting documentation.
4 2 CFR § 200.84 – Questioned Cost
5 JAMES is Treasury’s audit recommendation tracking system.
Desk Review of the Native Village of Point Hope, Alaska
1
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
July 28, 2023
OIG-CA-23-038
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM:
Wayne Ference
Partner, Castro & Company, LLC
SUBJECT:
Desk Review of the Native Village of Point Hope, Alaska
On June 2, 2022, we initiated a desk review of the Native Village of Point Hope’s
(Point Hope) 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 Point Hope’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 March 31, 2022 as reported in Cycles
13 through 84 in the GrantSolutions portal, except as described in the following
paragraph.
We conducted the entrance conference with Point Hope on June 2, 2022 to initiate
the desk review. Officials from Point Hope, Castro, and Department of the
Treasury (Treasury) Office of Inspector General (OIG) attended. Following the
entrance conference, we provided Point Hope our initial document request list
with a due date of June 22, 2022, and granted Point Hope personnel an extension
until June 27, 2022, per their request. We attempted to meet with Point Hope
personnel on at least six different occasions to discuss the document request list
as well as to conduct a walkthrough of the procedures in place to record and
report the uses of the CRF proceeds. Point Hope personnel stated that they are
made up of a relatively small team that had experienced significant turnover and
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 Calendar quarter ending June 30, 2020.
4 Calendar quarter ending March 31, 2022.
Desk Review of the Native Village of Point Hope, Alaska
2
there was inadequate transfer of knowledge relative to the uses and reporting of
the CRF proceeds. In August 2022, Point Hope personnel discovered transactions
were missing from their GrantSolutions portal reporting and adjustments were
needed resulting in another request for additional time to reconcile this
information. We informed Treasury OIG of the complications we were
experiencing with Point Hope and were put in contact with the Treasury Office of
Tribal and Native Affairs Policy Advisor. Castro, Treasury OIG, and the Treasury
Office of Tribal and Native Affairs Policy Advisor met with Point Hope officials in
September 2022, after which time Point Hope personnel stopped responding to all
communication with Castro. Castro kept Treasury OIG informed of Point Hope’s
delays and non-responsiveness throughout the performance of our desk review.
Because of the lack of documentation provided and the incomplete populations of
transactions recorded in GrantSolutions, we determined that there was a scope
limitation that impacted our ability to perform adequate procedures to complete
this desk review.
As part of our desk review, we were able to perform the following:
1) reviewed Point Hope’s quarterly Financial Progress Reports (FPRs)
submitted in the GrantSolutions portal through March 31, 2022;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 2021;5
3) reviewed Treasury’s Office of Inspector General (OIG) Coronavirus Relief
Fund Frequently Asked Questions Related to Reporting and
Recordkeeping;6
4) reviewed Treasury OIG’s monitoring checklists7 of Point Hope’s quarterly
FPR submissions for reporting deficiencies;
5) reviewed other audit reports issued, such as Single Audit reports,8 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 Point Hope’s uses of CRF proceeds;
6) reviewed Treasury OIG Office of Investigations (OI), the Council of the
Inspectors General on Integrity and Efficiency Pandemic Response
5 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
6 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
7 The checklists are used by Treasury OIG personnel 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.
8 As of the end of our fieldwork, Point Hope had not filed any single audit reports for fiscal years
2020, 2021 or 2022.
Desk Review of the Native Village of Point Hope, Alaska
3
Accountability Committee (PRAC),9 and Treasury OIG Office of Counsel
input on issues that may pose risk or impact Point Hope’s uses of CRF
proceeds; and
7) interviewed key personnel responsible for preparing and certifying Point
Hope’s GrantSolutions portal quarterly FPR submissions, as well as
officials responsible for obligating and expending CRF proceeds.
Due to the scope limitation described above, we were unable to make a non-
statistical selection of the Direct Payments, Aggregate Reporting less than or
equal to $50,000,10 and Aggregate Payments to Individuals11 data identified
through GrantSolutions reporting, and we were unable to evaluate the
documentation and records used to support Point Hope’s quarterly FPRs. In
addition, we were unable to determine whether the documentation exists or is
sufficient to support the uses of CRF proceeds and its compliance with the CARES
Act and Treasury’s Guidance; therefore, we question the entire $2,348,063.69 in
CRF proceeds that Point Hope received and conclude that Point Hope’s risk of
unallowable use of funds is high.
Castro is recommending Treasury OIG follow-up on the missing documentation
and make a determination whether to conduct a full-scope audit of Point Hope. In
addition, Castro recommends that Treasury OIG personnel determine whether to
take further action, up to and including recoupment of Point Hope’s CRF proceeds,
based on the scope limitation and potential noncompliance with the records
retention requirement. The records retention guidance requires recipients of the
CRF to maintain and make available to Treasury OIG, upon request, all documents
and financial records sufficient to establish compliance with subsection 601(d) of
the Social Security Act, as amended, (42 U.S.C. 801(d)).12
9 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 15 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.
10 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).
11 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.
12 The Department of Treasury Office of Inspector General Memorandum for Coronavirus Relief
Fund Reporting and Record Retention Requirements, OIG-20-021; July 2, 2020.
Desk Review of the Native Village of Point Hope, Alaska
4
Background
The CARES Act appropriated $150 billion to establish the CRF. Under the CRF,
Treasury made payments for specified uses to States and certain local
governments; the District of Columbia and 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 Point Hope for $2,348,063.69.
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, 2022.13
Section 15011 of the CARES Act requires each covered recipient14 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 funds15,16
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 sub-contracts or sub-grants awarded by the
covered recipient or its sub-recipients.
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 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.
13 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.
14 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.
15 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.
16 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 Native Village of Point Hope, Alaska
5
Desk Review Results
Financial Progress Reports
According to the CARES Act, quarterly FPRs should 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, Point Hope personnel did not comply with the
reporting timeline as required under Department of the Treasury’s Guidance OIG-
CA-20-021 (issued July 2, 2020), Coronavirus Relief Fund Reporting and Record
Retention Requirements.
We determined that Point Hope personnel did not submit their FPRs for Cycles 117
through 318 or Cycles 519 through 8.20 They only reported in the GrantSolutions
portal for Cycle 4.21 Point Hope personnel told us that the root cause of this issue
was the result of high staff turnover within the finance department during the
covered period.
Point Hope’s Use of CRF Proceeds
Treasury issued a CRF payment of $2,348,063.69 to Point Hope. In the last report
submitted by Point Hope for Cycle 4,22 the cumulative obligations and
expenditures were both $2,295,617.85. Point Hope personnel did not submit any
subsequent reports. Point Hope’s cumulative obligations and expenditures by
obligation type, as reported in GrantSolutions through Cycle 8, is summarized
below.
Payment Type
Cumulative
Obligated Amount
Cumulative
Expenditure Amount
Contracts >= $50,000
$ -
$ -
Grants >= $50,000
$ -
$ -
Loans >= $50,000
$ -
$ -
Transfers >= $50,000
$ -
$ -
Direct Payments >= $50,000
$ 311,866.85
$ 311,866.85
Aggregate Reporting < $50,000
$ 473,501.00
$ 473,501.00
Aggregate Payments to Individuals (in any
amount)
$ 1,510,250.00
$ 1,510,250.00
Totals
$ 2,295,617.85
$ 2,295,617.85
We could not obtain accurate or complete populations from which to select
transactions for detailed review to determine if expenditures were allowable and
17 Calendar quarter ending June 30, 2020.
18 Calendar quarter ending December 31, 2020.
19 Calendar quarter ending June 30, 2021.
20 Calendar quarter ending March 31, 2022.
21 Calendar quarter ending March 31, 2021.
22 Calendar quarter ending March 31, 2021.
Desk Review of the Native Village of Point Hope, Alaska
6
in accordance with the CARES Act and Treasury’s guidance. This scope limitation
resulted from Point Hope management not completing a reconciliation of its
GrantSolutions portal reported balances. We were unable to determine if Direct
Payments greater than or equal to $50,000, 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 period. Castro noted that Point Hope did not obligate or expend CRF
proceeds 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, and Transfers23 greater
than or equal to $50,000.
Point Hope personnel stated that they were a relatively small team that
experienced significant turnover and received inadequate transfer of knowledge
relative to the uses and reporting of the CRF proceeds.
We determined that Point Hope did not comply with Treasury OIG Coronavirus
Relief Fund Recipient Reporting and Record Retention Requirements (OIG-CA-20-
021; July 2, 2020). This guidance requires each prime recipient of CRF payments
to maintain and make available to Treasury OIG, upon request, all documents and
financial records sufficient to establish compliance with the CARES Act and the
use of CRF proceeds. Because Point Hope personnel did not provide the
information necessary for Castro to determine whether its uses of funds were
eligible or supported, we questioned the entire $2,348,063.69 in CRF funds
received by Point Hope.
The following table includes the total cumulative expenditure population amount
and the cumulative expenditure amount we attempted to test. Within the table
below, we have included a summary of unsupported and ineligible exception
balances identified as questioned costs.
23 A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
Desk Review of the Native Village of Point Hope, Alaska
7
Summary of Expenditure Testing and Recommended Results – As of Cycle 1024
Payment Type
Cumulative
Expenditure
Population
Amount*
Cumulative
Expenditure
Tested Amount
Unsupported
Exceptions*
Ineligible
Exceptions
Castro
Reviewed Value
Without
Exception
(per Support)
Contracts >=
$50,000
$ -
$ -
$ -
$ -
$ -
Grants >= $50,000
$ -
$ -
$ -
$ -
$ -
Loans >= $50,000
$ -
$ -
$ -
$ -
$ -
Transfers to Other
Government
Agencies >=
$50,000
$ -
$ -
$ -
$ -
$ -
Direct Payments
>= $50,000
$ 320,276.07
$ -
$ 320,276.07 $ -
$ -
Aggregate
Reporting <
$50,000
$ 442,899.66
$ -
$ 442,899.66 $ -
$ -
Aggregate
Payments to
Individuals (in any
amount)
$ 1,584,887.96
$ -
$ 1,584,887.96 $ -
$ -
Totals*
$ 2,348,063.69
$ -
$ 2,348,063.69 $ -
$ -
*Amounts adjusted to reflect cumulative expenditure amounts reported as of October 7, 2022.
Point Hope did not fully obligate or expend their CRF proceeds until after Cycle 8 (the scope of the
desk review).
Conclusion
We were unable to determine whether Point Hope’s reported obligations and
expenditures complied with the CARES Act and Treasury’s Guidance due to the
scope limitation. We question the entire $2,348,063.69 in CRF proceeds that Point
Hope received because of the lack of supporting documentation. Additionally, we
determined Point Hope’s risk of unallowable use of funds to be high.
Castro is recommending Treasury OIG follow-up on the missing documentation
and make a determination whether to conduct a full-scope audit of Point Hope. In
addition, Castro recommends that Treasury OIG determines whether to take further
action, up to and including recoupment of Point Hope’s CRF proceeds based on the
scope limitation and potential noncompliance with the records retention
requirement.
24 Calendar quarter ending September 30, 2022.
Desk Review of the Native Village of Point Hope, Alaska
8
*****
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.25
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
25 https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf