type: other

jurisdiction: US

text: b" Office of Inspector General\n Corporation for National and\n Community Service\n\n\n\n\n AGREED-UPON PROCEDURES FOR\n CORPORATION FOR NATIONAL AND\n COMMUNITY SERVICE GRANTS AWARDED\n TO THE ONESTAR NATIONAL SERVICE\n COMMISSION, INC.\n OIG REPORT NUMBER 07-18\n\n\n\n\n Prepared by:\n\n COTTON & COMPANY LLP\n 635 Slaters Lane, 4th Floor\n Alexandria, Virginia 22314\n\n\n\n\nThis report was issued to Corporation management on June 28, 2007. Under\nthe laws and regulations governing audit follow-up, the Corporation is to make\nfinal management decisions on the report\xe2\x80\x99s findings and recommendations no\nlater than December 28, 2007 and complete its corrective actions by June 28,\n2008. Consequently, the reported findings do not necessarily represent the\nfinal resolution of the issues presented.\n\x0c OFFICE OF INSPECTOR GENERAL\n\n June 28, 2007\n\n\nTO: Kristin McSwain\n Director, AmeriCorps State*National\n\n Margaret Rosenberry\n Director, Office of Grants Management\n\n\nFROM: Carol Bates\n Assistant Inspector General for Audit\n\nSUBJECT: Report 07-18, Office of Inspector General (OIG) Agreed-Upon Procedures for\n National and Community Service Grants Awarded to the OneStar National\n Service Commission\n\nWe contracted with the independent certified public accounting firm of Cotton & Company\nLLP (Cotton) to perform agreed-upon procedures in its review of Corporation for National\nand Community Service grants awarded to the OneStar National Service Commission\n(Commission). The contract required that Cotton conduct its review in accordance with\ngenerally accepted government auditing standards.\n\nIn its review of the Commission, Cotton questioned Federal share costs of $3,525,487 and\nnon-grant costs of $28,355 related to AmeriCorps education awards. It also presented nine\nfindings on internal controls and compliance with grant terms.\n\nIn connection with the contract, we reviewed Cotton's report and related documentation and\ninquired of its representatives. Our review, as differentiated from an audit in accordance\nwith generally accepted government auditing standards, was not intended to enable us to\nexpress, and we do not express opinions on the conclusions expressed in the report. Cotton is\nresponsible for the attached report, dated March 12, 2007, and the conclusions expressed\ntherein. However, our review disclosed no instances where Cotton did not comply, in all\nmaterial respects, with generally accepted government auditing standards.\n\nUnder the Corporation\xe2\x80\x99s audit resolution policy, a final management decision on the findings\nin this report is due by December 28, 2007. Notice of final action is due by June 28, 2008.\n\nIf you have questions pertaining to this report, please call me at 202-606-9356.\n\nAttachment\n\n 1201 New York Avenue, NW Suite 830, Washington, DC 20525\n 202-606-9390 Hotline: 800-452-8210 www.cncsoig.gov\n\n Senior Corps AmeriCorps Learn and Serve America\n\x0ccc: Susan Weddington, President and Chief Executive Officer,\n OneStar National Service Commission\n Sam Hadley, Partner, Cotton & Company LLP\n Jerry Bridges, Chief Financial Officer\n William Anderson, Deputy Chief Financial Officer\n Sherry Blue, Audit Resolution Coordinator\n\x0c OFFICE OF INSPECTOR GENERAL\n AGREED-UPON PROCEDURES FOR\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE\n GRANTS AWARDED TO\n ONESTAR NATIONAL SERVICE COMMISSION, INC.\n\n\n CONTENTS\n\n\nSection Page\n\n\nExecutive Summary ............................................................................................................ 1\n\nIndependent Accountants\xe2\x80\x99 Report on Applying Agreed-Upon Procedures........................ 4\n\nExhibit A: Consolidated Schedule of Claimed and Questioned Costs .............................. 7\n\nSchedule A: Administrative Grant 03CAHTX002 ............................................................ 8\n\nSchedule B: American Youth Works (AYW) ................................................................... 9\n\nSchedule C: AmeriCorps For Community Education and Engagement (ACEE).............. 13\n\nSchedule D: Communities in Schools (CIS), Central Texas, Inc. ..................................... 14\n\nSchedule E: Houston Read Commission (HRC) ............................................................... 15\n\nSchedule F: AmeriCorps Youth Harvest (AYH) Edcouch-Elsa Independent\n School District ............................................................................................... 17\n\nSchedule G: Amarillo Independent School District (AISD).............................................. 20\n\nExhibit B: Compliance Results.......................................................................................... 22\n\nAppendices\n\nA: OneStar National Service Commission\xe2\x80\x99s Response to Agreed-Upon Procedures Report\nB: Corporation\xe2\x80\x99s Response to Agreed-Upon Procedures Report\n\x0c EXECUTIVE SUMMARY\n\n The Office of Inspector General (OIG), Corporation for National and Community Service\n (Corporation), contracted with Cotton & Company LLP to perform agreed-upon procedures\n to assist the OIG in grant cost and compliance testing of Corporation-funded Federal\n assistance provided to the OneStar National Service Commission, Inc.\n\n BACKGROUND\n\n The Corporation supports national and community service programs that provide full- and\n part-time opportunities for Americans to engage in service that fosters civic responsibility,\n strengthens communities, and provides educational opportunities for those who make a\n commitment to service. The AmeriCorps program is one of the Corporation\xe2\x80\x99s three major\n service initiatives. Approximately three-quarters of all AmeriCorps grant funding goes to\n governor-appointed state service commissions, which award competitive grants to nonprofit\n groups that then recruit AmeriCorps members to respond to local needs.\n\n OneStar is a nonprofit organization headquartered in Austin, Texas. The Governor of Texas\n designated OneStar as the Texas service commission as of January 1, 2004. OneStar receives\n multiple awards from the Corporation, including AmeriCorps; Administrative and\n Professional Development and Training (PDAT); Disability; and Basic Innovative grants.\n\n The primary AmeriCorps grants are annual awards passed through OneStar to eligible\n subgrantees (state and local government and certain non-profits) that recruit and select\n volunteers who then may receive living allowances and education awards. OneStar had\n 653 AmeriCorps members in Program Year (PY) 2003-2004; 1,047 AmeriCorps members in\n PY 2004-2005; and 1,148 AmeriCorps members in PY 2005-2006.\n\n Agreed-Upon Procedures Scope and Results\n\n Except as described below, Cotton & Company performed the agreed-upon procedures\n detailed in the OIG\xe2\x80\x99s Agreed-Upon Procedures (AUP) Program for Corporation Awards to\n Grantees (including Subgrantees), dated January 2007. Our procedures covered testing of the\n following grants:\n\n Total\n Program Grant No. AUP Period Award Period\n Awards\nAdministrative 03CAHTX002 01/01/2004-03/31/2006 09/01/2003-09/02/2006 $1,990,574\nPDAT 04PTHTX001 01/01/2004-03/31/2006 01/01/2004-12/31/2006 $503,769\nAmeriCorps-Competitive 03ACHTX002 01/01/2004-03/31/2006 09/01/2003-12/31/2006 $11,949,364\nAmeriCorps-Formula 03AFHTX002 01/01/2004-03/31/2006 09/11/2003-09/10/2006 $9,316,429\n\n\n\n\n 1\n\x0cWe did not perform agreed-upon procedures related to cost testing (Section 3.D. of the AUP\nProgram) for the following subgrantees:\n\n \xe2\x80\xa2 American Youth Works\xe2\x80\x99 Financial Status Reports (FSRs) reported Federal\n share costs totaling $2,728,050 for the period January 1, 2004, to March 31,\n 2006.\n\n \xe2\x80\xa2 Houston Read Commission\xe2\x80\x99s PY 2004-2005 FSR reported Federal share costs\n totaling $723,827.\n\nWe conducted our field work from October 2006 through January 2007.\n\nSUMMARY OF RESULTS\n\nThe detailed results of our agreed-upon procedures on claimed costs are presented in\nExhibit A and supporting schedules. As a result of applying our procedures, we questioned\nclaimed Federal-share costs of $3,525,487 and education awards of $28,355. A questioned\ncost is an alleged violation of provision of law, regulation, contract, grant, cooperative\nagreement, or other agreement or document governing the expenditure of funds; or a finding\nthat, at the time of testing, such cost is not supported by adequate documentation.\n\nGrant participants who successfully complete terms of service under AmeriCorps grants are\neligible for education awards from the National Service Trust. These award amounts are not\nfunded by Corporation grants and thus are not included in claimed costs. However, as part of\nour agreed-upon procedures, and using the same criteria as that for claimed costs, we\ndetermined the effect of our findings on education-award eligibility.\n\nWe have summarized grant compliance results in Exhibit B. Following is a summary of\nthose testing results.\n\n1. OneStar and some of its subgrantees claimed unallowable and unsupported costs.\n\n2. Two subgrantees did not verify eligibility for all members before they began service.\n\n3. OneStar did not ensure that all members received required criminal background\n checks before working with children.\n\n4. Timesheets did not support some members\xe2\x80\x99 eligibility for education awards and, in\n some instances, timesheet hours were not always accurately recorded in WBRS.\n\n5. Subgrantees did not always complete member enrollment, exit, and change-of-status\n forms and enter them into WBRS in accordance with AmeriCorps requirements.\n\n6. Some member contracts were not signed before applicants started service, were\n missing, or did not include all required elements.\n\n\n\n\n 2\n\x0c7. Some subgrantees did not always document member orientation training attendance.\n\n8. Subgrantees did not, in some instances, conduct member evaluations that met\n AmeriCorps requirements and did not document all evaluations.\n\n9. Some subgrantee financial management systems did not adequately account for and\n report grant costs and related program income in accordance with Federal\n requirements.\n\nEXIT CONFERENCE\n\nWe conducted an exit conference with OneStar and Corporation representatives on April 16,\n2007. Following that conference, we issued a draft report to both OneStar and the\nCorporation for comment. OneStar\xe2\x80\x99s responses are provided at Appendix A and generally\nsummarized in the body of the report. The Corporation did not have specific comments but\nintends to respond in its management decision at a later date (see Appendix B).\n\n\n\n\n 3\n\x0cMarch 12, 2007\nOffice of Inspector General\nCorporation for National and Community Service\n\n\n INDEPENDENT ACCOUNTANTS\xe2\x80\x99 REPORT ON\n APPLYING AGREED-UPON PROCEDURES\n\n\nExcept as described in the following paragraph, Cotton & Company LLP performed the\nprocedures detailed in the OIG\xe2\x80\x99s Agreed-Upon Procedures (AUP) Program for Corporation\nAwards to Grantees (including Subgrantees), January 2007. These procedures were agreed\nto by the OIG solely to assist it in grant cost and compliance testing of Corporation-funded\nFederal assistance provided to the OneStar National Service Commission, Inc., for the\nawards detailed below.\n\nWe did not perform the agreed-upon procedures related to cost testing (Section 3.D. of the\nAUP Program), as follows:\n\n \xe2\x80\xa2 American Youth Works\xe2\x80\x99 (AYW) Financial Status Reports (FSRs) report\n Federal share costs totaling $2,728,050 for the period January 1, 2004, to\n March 31, 2006. AYW was unable to reconcile accounting records to\n claimed costs or support the majority of transactions that we sampled from its\n accounting records.\n\n \xe2\x80\xa2 Houston Read Commission\xe2\x80\x99s (HRC) Program Year (PY) 2004-2005 FSR\n reports Federal share costs totaling $723,827. HRC could not support the\n amount claimed for the program year with its accounting records. HRC plans\n to submit a revised FSR to OneStar after a comprehensive recalculation is\n completed.\n\nThis agreed-upon procedures engagement was performed in accordance with standards\nestablished by the American Institute of Certified Public Accountants and generally accepted\ngovernment auditing standards. The sufficiency of these procedures is solely the\nresponsibility of the OIG. Consequently, we make no representation regarding the\nsufficiency of the procedures, either for the purpose for which this report has been requested\nor any other purpose.\n\n\n\n\n 4\n\x0c Our procedures covered testing of the following grants:\n\n Program Grant No. AUP Period Award Period Total Awards\nAdministrative 03CAHTX002 01/01/2004-03/31/2006 09/01/2003-09/02/2006 $1,990,574\nPDAT 04PTHTX001 01/01/2004-03/31/2006 01/01/2004-12/31/2006 $503,769\nAmeriCorps-Competitive 03ACHTX002 01/01/2004-03/31/2006 09/01/2003-12/31/2006 $11,949,364\nAmeriCorps-Formula 03AFHTX002 01/01/2004-03/31/2006 09/11/2003-09/10/2006 $9,316,429\n\n\n We performed testing at OneStar as well as six of its AmeriCorps subgrantees. We selected\n and tested 164 Federal and 30 match-cost transactions at OneStar and 20 Federal and 10\n match-cost transactions from each program year at each of the 6 subgrantees. Additionally\n we tested certain grant compliance requirements by sampling 178 members at the following\n subgrantees:\n\n PY PY PY\n Subgrantee 2003-2004 2004-2005 2005-2006\n American Youth Works (AYW) 13 16\n AmeriCorps for Community Engagement and\n Education (ACEE) 7 10 15\n Communities in Schools (CIS), Central Texas, Inc. 10 15\n\n Houston Read Commission (HRC) 16 16\n AmeriCorps Youth Harvest (AYH) Edcouch-Elsa\n 15 20\n Independent School District\n Amarillo Independent School District (AISD) 10 15\n\n\n Except as described in the second paragraph of our report, we performed all applicable\n testing procedures in the AUP Program on each sample transaction or member file.\n\n RESULTS OF AGREED-UPON PROCEDURES\n\n The detailed results of our agreed-upon procedures on claimed costs are presented in\n Exhibit A and supporting schedules. As a result of applying our procedures, we questioned\n claimed Federal-share costs of $3,525,487 and education awards of $28,355. A questioned\n cost is an alleged violation of provision of law, regulation, contract, grant, cooperative\n agreement, or other agreement or document governing the expenditure of funds; or a finding\n that, at the time of testing, such cost is not supported by adequate documentation.\n\n Grant participants who successfully complete terms of service under AmeriCorps grants are\n eligible for education awards from the National Service Trust. These award amounts are not\n funded by Corporation grants and thus are not included in claimed costs. As part of our\n agreed-upon procedures and using the same criteria as that for claimed costs, however, we\n determined the effect of our findings on education award eligibility.\n\n\n 5\n\x0cWe have summarized the results of testing grant compliance in Exhibit B. We were not\nengaged to, and did not perform an examination, the objective of which would be expression\nof an opinion on the subject matter. Accordingly, we do not express such an opinion. Had\nwe performed other procedures, other matters might have come to our attention that would\nhave been reported to you.\n\nThis report is intended solely for the information and use of the OIG, Corporation, OneStar,\nand U.S. Congress and is not intended to be and should not be used by anyone other than\nthese specified parties.\n\n\nCOTTON & COMPANY LLP\n\n\n\nSam Hadley, CPA\nPartner\n\n\n\n\n 6\n\x0c EXHIBIT A\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n CONSOLIDATED SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n\n Questioned\n Education\nAward Awarded Claimed Questioned Awards Reference\n03CAHTX002 $1,990,574 $1,445,669 $1,002 Schedule A\n04PTHTX001\n $503,769 $376,456\n03ACHTX002\n American Youth Works $3,865,475 $2,728,050 $2,728,050 $4,725 Schedule B\n AmeriCorps for Community\n Education and Engagement 2,260,917 2,060,688 18 4,725 Schedule C\n Communities in Schools,\n Central Texas 1,219,018 915,010 3,750 Schedule D\n Houston Read Commission 1,823,612 1,205,531 723,827 5,062 Schedule E\n Others 2,780,342 1,742,531 ________ ______\n Total $11,949,364 $8,651,810 $3,451,895 $18,262\n03AFHTX002\n AmeriCorps Youth Harvest $1,733,414 $1,449,009 $63,864 $2,363 Schedule F\n Amarillo Independent\n School District 1,019,074 855,743 8,726 7,730 Schedule G\n Houston Read Commission 459,726 373,686\n Communities in Schools,\n Central Texas 446,348 415,613\n Others 5,657,867 3,406,168 ______ ______\n Total $9,316,429 $6,500,219 $72,590 $10,093\n\n\n\n\n 7\n\x0c SCHEDULE A\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n ADMINISTRATIVE GRANT\n 03CAHTX002\n\n\n Amount Note\n Claimed Federal Costs $1,445,669\n\n Questioned Federal Costs\n Unallowable legal fees $1,002 1\n\n\n1. OneStar claimed legal fees related to its establishment as an organization. OneStar\n was established in December 2003 to replace the Texas Commission on Volunteerism\n and Community Service. We identified legal fees of $4,349 associated with\n OneStar\xe2\x80\x99s establishment as a nonprofit organization, of which $1,002 was allocated to\n the administrative grant. OMB Circular A-122, Cost Principles for Non-Profit\n Organizations, Attachment B, paragraph 31, Organization Costs, in effect at the time\n these costs were incurred, states that expenditures in connection with establishing or\n reorganizing an organization are unallowable except with prior approval of the\n awarding agency. This requirement is now codified at 2 CFR \xc2\xa7 230, Appendix B,\n Paragraph 31. Because no prior approval was obtained, we questioned $1,002.\n\n\n\n\n 8\n\x0c SCHEDULE B\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n AMERICAN YOUTH WORKS (AYW)\n\n\n Amount Notes\n Claimed Federal Costs $2,728,050\n\n Questioned Federal Costs: $2,728,050 1\n\n Questioned Education Awards:\n Insufficient service hours $4,725 2\n\n1. AYW did not provide sufficient documentation for us to perform all of our agreed-\n upon procedures testing of claimed costs. However, results of partial testing showed\n unallowable and unallocable costs.\n\n \xe2\x80\xa2 AYW was unable to reconcile Federal and grantee costs reported on the FSR\n to its accounting records. AYW provided a schedule that compared FSR\n amounts to its accounting records. The schedule identified differences in each\n calendar year (CY) as follows:\n\n Federal Share Recipient Share\n CY 2004\n FSR $1,159,673 $1,314,009\n General Ledger 1,164,789 1,339,163\n Difference $(5,116) $(25,154)\n\n CY 2005\n FSR $1,162,489 $994,722\n General Ledger 1,174,613 1,027,452\n Difference $(12,124) $(32,730)\n\n CY 2006 (through 3/31)\n FSR $405,888 $98,546\n General Ledger 497,130 65,468\n Difference $(91,242) $33,078\n\n\n\n\n 9\n\x0c\xe2\x80\xa2 AYW was unable to provide documentation to support most of the sample\n items:\n\n Number of Transactions\n Program Year Sample Supported Unsupported\n 2003-2004 20 2 18\n 2004-2005 20 7 13\n 2005-2006 11 5 6\n Total 51 14 37\n\n\xe2\x80\xa2 Of the 14 transactions we tested to supporting documents, we identified the\n following unallowable and/or unallocable costs:\n\n \xe2\x80\xa2 Six transactions were for vehicle repair expenditures. AYW provided\n an inventory of leased vehicles used in the AmeriCorps programs. We\n identified repairs charged to the grant for vehicles not used in these\n programs.\n\n \xe2\x80\xa2 Travel costs of $989 were charged for a trip to Finland unrelated to the\n AmeriCorps programs.\n\n \xe2\x80\xa2 Two expenditures for office supplies and a staff meeting were charged\n to AmeriCorps, even though the AmeriCorps program received no\n direct benefit. These costs should have been treated as indirect and\n allocated to all of AYW\xe2\x80\x99s programs.\n\nBecause of the reconciliation problems discussed previously, we were unable to\ncomplete the cost testing procedures, and the results of limited testing procedures\nindicated that costs were not attributable to the program. Therefore, we questioned\nall claimed costs of $2,728,050.\n\nBased on the work that we performed, we identified the following additional areas of\nconcern:\n\na. AYW claimed PY 2005-2006 Federal-share costs on its FSR that exceeded\n allowable amounts. Grantees are required to match 15 percent of member\n support costs and 33 percent of program operating costs in accordance with\n 45 CFR \xc2\xa7\xc2\xa7 2521.45(a), Member support, and (b), Program operating costs.\n AYW claimed 92 percent of its member support and 69 percent of its program\n operating costs as Federal share for PY 2005-2006.\n\nb. Based on discussions with AYW and OneStar representatives, we learned\n that:\n\n\n\n\n 10\n\x0c \xe2\x80\xa2 AYW had not developed an indirect cost rate to recover its indirect\n costs associated with programs. Space and other overhead costs were\n apparently allocated to programs using a direct allocation methodology\n that is several years old and had not recently been reevaluated.\n\n \xe2\x80\xa2 Matching costs were funded by AYW\xe2\x80\x99s Housing and Urban\n Development (HUD) grant, which is approximately $700,000\n annually. Some of those costs charged to the HUD grant were claimed\n both as Federal costs on the HUD FSR and as matching costs on the\n Corporation FSR. OneStar previously requested that AYW delete\n HUD-funded costs from its claimed match in PY 2003-2004 and PY\n 2005-2006. AYW did not have a HUD grant in PY 2004-2005.\n\n \xe2\x80\xa2 AYW\xe2\x80\x99s e-Corps program charged cities and counties for time that\n members spent on environmental issues. It did not, however, report\n this program income on its FSRs to OneStar.\n\n \xe2\x80\xa2 AYW\xe2\x80\x99s Youthbuild program earned income from the sale of houses\n built by AmeriCorps members. The AmeriCorps budget included\n significant costs for the associated building services and materials\n (e.g., drywall, plumbing services, lumber). Sale proceeds, however,\n were wrongly not considered as program income and did not fund\n match. Instead, AYW used the proceeds to fund construction of the\n next homebuilding project.\n\n \xe2\x80\xa2 AYW recorded an adjusting entry at year end to reclassify its home-\n building expenses as inventory on the balance sheet. As a result, the\n general ledger supporting AYW\xe2\x80\x99s audited financial statements did not\n reconcile to its FSRs.\n\n \xe2\x80\xa2 In May 2006, OneStar notified AYW that it would not fund AYW\xe2\x80\x99s\n PY 2006-2007 grant. OneStar\xe2\x80\x99s decision was based, at least in part, on\n concerns about AYW\xe2\x80\x99s accounting for matching and program income.\n\nRecommendation: We recommend that the Corporation use or ensure an audit-like,\nand in-depth, approach in its review of the detailed support for AYW costs claimed\nby OneStar and recoup costs improperly charged to the AmeriCorps program. The\nCorporation\xe2\x80\x99s review is critical because of the areas of concern expressed herein and\nbecause another Corporation grantee is now funding the AYW homebuilding program\nthat was formerly funded by OneStar.\n\nOneStar\xe2\x80\x99s Response: OneStar has been working with AYW to address and resolve\nmany of the issues. AYW has provided OneStar with documentation for the costs\nselected for testing. OneStar has tested these costs for allowability, and will share its\ntesting results with the Corporation, as well as its findings and recommendations.\n\n\n\n\n 11\n\x0c OneStar anticipates that questioned costs will be significantly less than identified in\n this review. In response to the other reported areas of concern:\n\n \xe2\x80\xa2 AYW claimed Federal share costs in excess of allowable amounts on\n its interim PY 2005 \xe2\x80\x93 2006 FSR. AYW\xe2\x80\x99s Federal share costs on its\n final FSR for that program year will not exceed allowable amounts.\n\n \xe2\x80\xa2 OneStar informed AYW that the expenditures under the HUD grant\n were disallowed as match for PY 2005 \xe2\x80\x93 2006, and will not be\n included on the final FSR. As a result, Federal share costs reported to\n the Corporation will not include the AYW home-building costs.\n\n Additional Comments: The corrective actions, as described in the comments, are\n generally responsive to our recommendations; however, OneStar does not address the\n impact of previously unrecognized program income, from the sale of houses, on\n allowable Federal share costs. The Corporation should closely review OneStar\xe2\x80\x99s\n testing results and ensure that all issues regarding the allowability of AYW\xe2\x80\x99s Federal\n share costs are resolved using the recommended audit-like approach.\n\n2. Seven members in PY 2004-2005 started their service before signing the member\n contract. AmeriCorps Provisions, B.8.d., Member Enrollment Procedures, states that\n an individual is enrolled as an AmeriCorps member when he or she has met certain\n criteria, which includes a signed member contract. We questioned education awards\n totaling $4,725 for two half-time members. After deducting hours served prior to\n signing the member contract, these members did not meet the 900 minimum service\n hours required for half-time education awards, as detailed below:\n\n Member 1 Member 2\n Timesheet hours 927 916\n Hours prior to signing contract 85 87\n Eligible service hours 842 829\n Service hours required for award 900 900\n Questioned Education Award $2,362.50 $2,362.50\n\n\n\n\n 12\n\x0c SCHEDULE C\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n AMERICORPS FOR COMMUNITY EDUCATION AND ENGAGEMENT (ACEE)\n UNIVERSITY OF TEXAS AT AUSTIN\n\n\n Amount Notes\n Claimed Federal Costs $2,060,688\n\n Questioned Federal Costs:\n Over-claimed administrative costs $18 1\n\n Questioned Education Award:\n Unsupported WBRS hours $4,725 2\n\n\n1. ACEE claimed administrative costs in excess of the administrative percentage\n allowed for PY 2003-2004. AmeriCorps Provisions, C.23.b., Administrative Costs,\n stipulates that administrative costs cannot exceed 5 percent of total Corporation funds\n actually expended under the grant award. The ACEE individual responsible for\n preparing claimed costs did not understand that administrative costs were recoverable\n as a percentage of costs incurred and not at the total budgeted dollar amount. We\n questioned $18.\n\n2. Timesheet hours for three members in PY 2003-2004 did not support hours reported\n in the Corporation\xe2\x80\x99s Web-Based Reporting System (WBRS). AmeriCorps\n Provisions, C.22.c., Financial Management Provisions, Time and Attendance\n Records, requires that grantees keep time-and-attendance records for all AmeriCorps\n members to document their eligibility for in-service and post-service benefits. The\n Corporation uses time-and-attendance information in WBRS to track member status,\n which forms the basis for calculating education awards. Member timesheet totals\n were incorrect, thus inaccurate hours were reported in WBRS. Actual hours\n supported by the timesheets for one of the three members were insufficient to meet\n the service-hour requirement for an education award. ACEE reported 1,700 hours for\n this member, but her timesheets supported only 1,696 hours. Therefore, we\n questioned the member\xe2\x80\x99s education award of $4,725, because the member did not\n meet the 1,700 minimum hour requirement.\n\n\n\n\n 13\n\x0c SCHEDULE D\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n COMMUNITIES IN SCHOOLS (CIS), CENTRAL TEXAS\n\n\n Amount Note\n Claimed Federal Costs $915,010\n\n Questioned Education Awards:\n Insufficient service hours $3,750 1\n\n\n1. Three members in PY 2004-2005 started their service before signing the member\n contract. AmeriCorps Provisions, B.8.d., Member Enrollment Procedures, states that\n an individual is enrolled as an AmeriCorps member when he or she has met certain\n criteria, which includes a signed member contract. We questioned member education\n awards of $3,750 for three quarter-time members. These members did not meet\n minimum service hours required for education awards when the hours were deleted\n for service performed before contracts were signed, as detailed below:\n\n\n Member 1 Member 2 Member 3\n Timesheet hours 452 495 475\n Hours prior to signing contract 7 62 35\n Eligible service hours 445 433 440\n Service hours required for award 450 450 450\n Questioned Education Award $1,250 $1,250 $1,250\n\n\n\n\n 14\n\x0c SCHEDULE E\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n HOUSTON READ COMMISSION (HRC)\n\n Amount Notes\n Claimed Federal Costs $1,205,531\n\n Questioned Federal Costs $723,827 1\n\n Questioned Education Awards:\n Unsupported WBRS Hours $5,062 2\n\n1. We could not perform cost testing procedures at HRC for PY 2004-2005, because it\n could not support the amount claimed for that program year with its accounting\n records. HRC representatives stated that they plan to file a revised FSR for PY 2004-\n 2005 after a comprehensive reconstruction is performed. We questioned $723,827\n reported as the Federal share on the latest FSR filed for that PY, and only reviewed\n claimed costs of $481,704 for PY 2005-2006.\n\n Recommendation: We recommend that the Corporation use or ensure an audit-like,\n and in-depth approach in its reviews of the revised HRC FSR for PY 2004-2005 and\n detailed support, and determine and recoup amounts charged to the AmeriCorps\n program, i.e., the amount of unallowable costs. We believe such a review is\n necessary because of the extent of costs questioned and the reasons the costs were\n questioned.\n\n OneStar\xe2\x80\x99s Response: OneStar has worked with HRC to reconcile reported Federal\n share costs to its accounting records and to accurately report in-kind contributions\n allocated as match. OneStar will work with the Corporation to determine the\n allowability of claimed costs and to recover any overclaimed costs.\n\n Additional Comments: OneStar\xe2\x80\x99s corrective actions, as described, are responsive to\n our recommendation. The Corporation should follow the recommended audit-like\n approach in reviewing costs.\n\n2. HRC reported hours in WBRS that are not supported by member timesheets for eight\n members. HRC provided all timesheets, however, for three members in PY 2004-\n 2005 and five members in PY 2005-2006, the hours reported on those timesheets did\n not support hours reported in WBRS. AmeriCorps Provisions, C.22.c.ii., requires\n grantees to keep time-and-attendance records for all AmeriCorps members to\n\n\n\n 15\n\x0c document their eligibility for in-service and post-service benefits. The Corporation\n uses time-and-attendance information in WBRS to track member status and to\n determine eligibility for and the dollar amount of education awards. Hours supported\n by timesheets for the three PY 2004-2005 members were not sufficient to earn the\n education award, as detailed below. We questioned $5,062, calculated as follows:\n\n Total\n Member 1 Member 2 Member 3 Questioned\nHours recorded on WBRS 1,539 1,731 785\nHours supported by timesheets 1,482 1,680 717\nEducation award questioned $158 $4,725 $179 $5,062\n\n Members 1 and 3 left the program for compelling personal circumstances and earned\n a prorated education award based on hours reported in WBRS. Therefore, we\n recalculated the education award based on hours actually served and questioned the\n difference. For Member 2, the entire award was questioned because the member did\n not meet the 1,700 minimum hour requirement. We did not question education\n awards for the 5 members in PY 2005-2006 because the PY was not complete as of\n the date of this review.\n\n\n\n\n 16\n\x0c SCHEDULE F\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n AMERICORPS YOUTH HARVEST (AYH)\n EDCOUCH-ELSA INDEPENDENT SCHOOL DISTRICT\n\n\n Amount Notes\n Claimed Federal Costs $1,449,009\n\n Questioned Federal Costs:\n Accounting records do not support claimed costs $30,350 1\n Unsupported costs 416 2\n Unallowable in-kind costs 30,425 3\n No end-of-term evaluation 2,673 4\n Total Questioned Federal Costs $63,864\n\n Questioned Education Award:\n Insufficient service hours $2,363 5\n\n\n1. AYH was unable to support amounts reported on its FSR with its accounting records.\n AmeriCorps Provisions, C.22.a., General, states that grantees must maintain financial\n management systems that include a clear audit trail. Financial management systems\n must be capable of distinguishing expenditures attributable to the grant from those not\n attributable to the grant. The program manager prepared financial reports from\n records received from the accounting office of the school district, however the\n program manager did not use the cumulative report totals, and did not reconcile\n cumulative amounts reported to accounting reports, and therefore could not explain\n the differences between amounts reported and amounts shown on accounting reports.\n We questioned the $30,350 unreconciled difference between the FSR and accounting\n records as of March 31, 2006 (program operating costs of $29,096 and member\n support costs of $1,254).\n\n2. AYH did not provide documentation to support $416 of utility costs claimed.\n AmeriCorps Provisions, C.22.b., Source Documentation, states that the grantee must\n maintain adequate supporting documents for grant expenditures. It allocated utility\n costs to the AmeriCorps program, but was unable to locate supporting documents.\n We questioned $416.\n\n\n\n\n 17\n\x0c3. AYH did not provide sufficient documentation to support $35,387 of in-kind\n contributions claimed as matching program operating costs. These costs were\n unsupported because AYH did not provide support for the hourly salary rate of\n volunteers and for the square-footage cost of office space. According to\n 45 CFR \xc2\xa7 2543.23 (a)(1), contributions can be accepted to the extent that costs are\n verifiable from the recipient\xe2\x80\x99s records. It further states that the basis for determining\n the valuation of contributions must be documented.\n\n AYH did not meet its required match percentage for program operating costs in PY\n 2005-2006. AmeriCorps Provisions, B.13.a., requires grantees to match 33 percent of\n program operating costs. Because we could not reconcile AYH\xe2\x80\x99s claimed costs to its\n accounting reports by PY, as discussed in Note 1, above, we combined operating\n costs for all program years and questioned $30,425 of Federal program operating\n costs exceeding the 67-percent ceiling as follows:\n\n Total Claimed Program Operating Costs $615,881\n Less: Unallowable matching costs (35,387)\n Unsupported costs (Note 1) (29,096)\n Utility costs (Note 2) (416)\n Allowable Program Costs $550,982\n\n Allowable Federal Share (67% of total program cost) $369,158\n Federal costs claimed 429,095\n Questioned Program Costs Exceeding Ceiling $59,937\n\n Less Costs Questioned in Notes 1 and 2 (29,512)\n Net Questioned Costs $30,425\n\n4. AYH did not provide an end-of-term evaluation for one PY 2004-2005 member who\n served a second term. AmeriCorps Provisions, B.7.g., Performance Reviews, requires\n mid-term and end-of-year member performance evaluations. According to 45 CFR \xc2\xa7\n 2522.220(c), Participant performance review, a participant is not eligible for a second\n or additional term of service and therefore not eligible for an AmeriCorps education\n award for subsequent service without a satisfactory mid-term and final performance\n evaluation for the prior service. We questioned the member\xe2\x80\x99s PY 2005-2006 living\n allowance of $2,673 (paid through March 31, 2006), because without a final\n evaluation for PY 2004-2005, the member was not eligible. We were unable to\n identify costs of health insurance and other benefits associated with questioned living\n allowance. These related costs, as well as living allowance payments made after\n March 31, 2006, should be quantified and included in the resolution of this cost\n exception.\n\n\n\n\n 18\n\x0c5. Four of 35 AYH members began service before signing member contracts.\n AmeriCorps Provisions, B.8.d., Member Enrollment Procedures, states that an\n individual is enrolled as an AmeriCorps member when he or she has met certain\n criteria, which includes a signed member contract. We questioned the\n $2,363 education award of one PY 2004-2005 half-time member. The member\xe2\x80\x99s\n timesheets supported 903 hours, 32 of which were served before the member signed\n the contract. Without the service hours performed before signing the member\n contract, the member did not meet the minimum (900) service hours required for the\n education award.\n\n\n\n\n 19\n\x0c SCHEDULE G\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n SCHEDULE OF CLAIMED AND QUESTIONED COSTS\n\n AMARILLO INDEPENDENT SCHOOL DISTRICT (AISD)\n\n\n Amount Notes\n Claimed Federal Costs $855,743\n\n Questioned Federal Costs:\n Unsupported costs $125 1\n Missing program records 8,601 2\n Total questioned costs $8,726\n\n Questioned Education Awards:\n Missing program records $4,130 2\n Insufficient service hours 3,600 3\n Total questioned education awards $7,730\n\n\n1. AISD claimed $125 for furniture purchased from an AmeriCorps staff member in PY\n 2004-2005. The purchase was supported by an inventory list, but documentation\n provided was insufficient to establish both the reasonableness of the amount paid and\n that the items had not previously been purchased with AmeriCorps funds.\n AmeriCorps Provisions, C.22.b., states that the grantee must maintain adequate\n supporting documents for its expenditures. We questioned $125.\n\n2. AISD was unable to locate one member\xe2\x80\x99s file for PY 2004-2005, and thus did not\n provide a member contract, enrollment form, timesheets, or evaluations for the\n member. AmeriCorps Provisions, B.14.a., Record-Keeping, states that grantees must\n maintain records that are sufficient to establish member eligibility to participate in the\n program and successful completion of program requirements. We questioned the\n Federal share of the member\xe2\x80\x99s $7,222 living allowance, $1,379 of benefits (health\n insurance and FICA) totaling $8,601, and $4,130 partial education award, because\n AISD was unable to support the member\xe2\x80\x99s participation in, and completion of, the\n program requirements.\n\n3. Two members in PY 2004-2005 began service before signing member contracts.\n AmeriCorps Provisions, B.8.d., Member Enrollment Procedures, states that an\n individual is enrolled as an AmeriCorps member when he or she has met certain\n criteria, which includes a signed a member contract. The members did not meet\n\n\n 20\n\x0cminimum service hours required for education awards after the hours served prior to\nsigning the member contract are deleted. We questioned member education awards\nof $3,600, as detailed below.\n\n Member 1 Member 2\n Timesheet hours 677 681\n Hours prior to signing contract 16 16\n Eligible service hours 661 665\n Service hours required for award 675 675\n Questioned Education Award $1,800 $1,800\n\n\n\n\n 21\n\x0c EXHIBIT B\n\n\n ONESTAR COMMISSION\n CORPORATION FOR NATIONAL AND COMMUNITY SERVICE AWARDS\n COMPLIANCE RESULTS\n\n1. OneStar and some of its subgrantees claimed unallowable and unsupported\n costs.\n\nThe notes to Schedules A through G describe questioned costs of $3,525,487, which are\nsummarized in Exhibit A. A questioned cost is an alleged violation of provision of law,\nregulation, contract, grant, cooperative agreement, or other agreement or document\ngoverning the expenditure of funds; or a finding that, at the time of testing, such cost is not\nsupported by adequate documentation.\n\nRecommendation: We recommend that the Corporation follow up with OneStar to\ndetermine the amount of costs that should be disallowed and recovered (see also similar\nrecommendations with regard to certain subgrantees in Schedules B and E).\n\nOneStar\xe2\x80\x99s Response: OneStar has been diligently working with subgrantees to resolve\nunallowable and unsupported cost issues. OneStar looks forward to sharing its results and\ndeterminations with the Corporation.\n\nAdditional Comments: OneStar\xe2\x80\x99s corrective actions, as described in its comments, are\nresponsive to our recommendation. The Corporation should use an audit-like and in-depth\napproach to resolve and recover questioned costs.\n\n2. Two subgrantees did not verify eligibility for all members before they began\n service.\n\nWe tested member files for 178 members at 6 subgrantees. Two subgrantee sites (ACEE and\nAYH) did not verify citizenship for 10 members until after the members had begun their\nservice. Documentation for nine ACEE members indicated that verification was performed\nwithin 10 days after starting service, but the AYH member\xe2\x80\x99s citizenship was not verified\nuntil more than 3 months after his start date.\n\nAccording to 45 CFR \xc2\xa7 2522.200, What are the eligibility requirements for an AmeriCorps\nparticipant?, every AmeriCorps participant is required to be a citizen, national, or lawful\npermanent resident alien of the United States. AmeriCorps Provisions, B.8.d., Member\nEnrollment Procedures, states that an individual is enrolled as an AmeriCorps member when\nthe program has verified the member\xe2\x80\x99s eligibility to serve. The ACEE program manager was\nunaware that proof of citizenship must be verified before members can serve in the program.\nFailure to verify citizenship before a member\xe2\x80\x99s start date could result in members\nparticipating who are not citizens, nationals, or lawful permanent residents.\n\n\n\n\n 22\n\x0cRecommendation: We recommend that the Corporation require OneStar to strengthen its\nsubgrantee training and program monitoring procedures to ensure that adequate\ndocumentation is obtained and maintained to verify member eligibility before members begin\nservice. Also, the Corporation should follow up, after the additional training has been\ncompleted and monitoring procedures are in place, to ensure that all OneStar subgrantees\nverify eligibility before member contracts are signed.\nOneStar\xe2\x80\x99s Response: OneStar will strengthen its subgrantee training on documenting\nmember eligibility, ensure that appropriate staff members attend training, and ensure that its\nmonitoring procedures verify subgrantee compliance.\nAdditional Comments: OneStar\xe2\x80\x99s corrective actions, as described in its comments, are\nresponsive to our recommendations. The Corporation should follow up to assess the\neffectiveness of OneStar\xe2\x80\x99s actions to ensure that subgrantees verify member eligibility before\ncontracts are signed.\n3. OneStar did not ensure that all members received required criminal background\n checks before working with children.\n\nThree subgrantees (CIS, AYH, and AISD) did not conduct criminal record background\nchecks on 66 members working with children. We tested records for 85 members at these\nlocations, and criminal record checks were not documented as follows:\n\n Subgrantee PY 2004-2005\n Under 18 18 and Over Total\n CIS 0 1 1\n AYH 11 4 15\n AISD 6 2 8\n Total 17 7 24\n\n Subgrantee PY 2005-2006\n Under 18 18 and Over Total\n CIS 0 7 7\n AYH 13 7 20\n AISD 15 0 15\n Total 28 14 42\n\nIn addition, the background check on one ACEE member was not completed until the day\nafter she started service.\n\nAmeriCorps Provisions, C.7, Criminal Background Checks, requires that, to the extent\npermitted by state law, criminal record checks be conducted on members over the age of 18\nwho have access to children as part of the screening process. In 2005, the AmeriCorps\nProvisions were revised to indicate that criminal record checks should be done on members\n18 and older. Prior to that, no age limit was identified. We noted that criminal record checks\n\n\n 23\n\x0cwere not available for members regardless of age at their start of service. We also noted that\n38 of the 45 members under age 18, as shown in the tables above, turned 18 during their\nservice term; however background checks were still not conducted.\n\nThe subgrantees did not conduct background checks because of misunderstandings about the\nrequirement and who should conduct them. AYH and AISD did not think that criminal\nchecks were required because their members were students. CIS erroneously thought that its\nhuman resources department had conducted criminal record checks on its education award\nonly members. Without background checks, members with criminal records could have\ncontact with children, resulting in potential liability for the subgrantees, OneStar, and the\nCorporation.\n\nRecommendation: We recommend that the Corporation require OneStar to strengthen its\nsubgrantee training and program monitoring procedures to ensure that background checks are\nperformed before members perform service with children. In addition, the Corporation\nshould follow up after additional training is provided and monitoring procedures are in place\nto ensure all OneStar subgrantees are in compliance with background check requirements.\n\nOneStar\xe2\x80\x99s Response: OneStar agrees that background checks are an important compliance\nprocedure but states that it is unclear how to interpret the requirements of these checks for\nminor members. OneStar is reviewing state requirements for background checks of youth\nunder the age of 18 and is looking forward to Corporation guidance.\n\nAdditional Comments: OneStar\xe2\x80\x99s comments do not address corrective actions with regard to\nthe report recommendations.\n\n4. Timesheets did not support some member\xe2\x80\x99s eligibility for education awards and,\n in some instances, timesheet hours were not always accurately recorded in\n WBRS.\n\nWe tested timesheets for 178 members at 6 subgrantees. Service hours recorded in WBRS\nfor 37 members were not supported by member timesheets because of calculation errors or\nmissing timesheets. AISD could not provide any timesheets for one member in PY 2004-\n2005, and three HRC files were missing a timesheet to support the member\xe2\x80\x99s hours. In\nseveral cases, these differences affected the member\xe2\x80\x99s eligibility to earn an education award,\nbecause the number of timesheet-supported service hours did not meet the Corporation\xe2\x80\x99s\nservice-hour requirements. We identified the following instances of timesheet discrepancies:\n\n\n\n\n 24\n\x0c Member Questioned Questioned\n Hour Education Education\n Subgrantee Discrepancies Awards Amounts\n HRC 8 3 $5,062\n ACEE 3 1 4,725\n CIS 1\n AYH 5\n AISD* 10 1 4,130\n AYW 10 _ ______\n Total 37 5 $13,917\n\n * We also questioned the $7,222 living allowance and $1,379 benefits claimed for the AISD\n member whose timesheets are missing (Schedule F, Note 2), because no documentation exists\n to show that this member actually participated in the program.\n\nIn addition, AISD did not require five members to prepare May 2005 timesheets and did not\nrecord corresponding service hours in WBRS, because the members had already met the\nminimum service-hour requirement. While the Corporation does not require entering service\nhours into WBRS after the education award has been earned, the lack of timesheets and\nsubsequent entry into WBRS prevents the capture of all volunteer service hours, a statistic\nthat would be useful to the Corporation. Furthermore, the members were still serving and\nneeded to document their eligibility for in-service benefits. AmeriCorps Provisions, C.22.c.,\nTime and Attendance Records, requires that grantees keep time-and-attendance records for all\nAmeriCorps members to document their eligibility for in-service and post-service benefits.\nAmeriCorps Provisions, B.8.a., Terms of Service, Program Requirements, states that to be\neligible for an education award the member must complete the term of service and hours:\n\n \xe2\x80\xa2 Full-time members must serve at least 1,700 hours;\n \xe2\x80\xa2 Half-time members must serve at least 900 hours;\n \xe2\x80\xa2 Reduced half-time members must serve at least 675 hours;\n \xe2\x80\xa2 Quarter-time members must serve at least 450 hours; and\n \xe2\x80\xa2 Minimum-time members must serve at least 300 hours.\n\nSubgrantees did not have procedures in place to verify the accuracy of hours recorded in\nWBRS and/or to ensure that all member time was properly reported and timesheets\nmaintained in member files.\n\n\n\n\n 25\n\x0cDuring testing, we also noted that some weaknesses in timekeeping procedures, as follows:\n\n Missing Not Prepared Whiteout Changes Not\n Subgrantee Signatures Dated in Pencil Corrections Initialed\n AISD 23\n AYH 2 34 25\n AYW 6 3 21\n CIS 1 10\n ACEE 1 3 3\n HRC _ __ _ __ 12\n Total 1 23 8 41 71\n\nSubgrantee procedures required signatures, but did not always require signature dates, use of\nink, or timesheet changes to be initialed by the member and supervisor or prohibit pencil and\nwhiteout corrections.\n\nAmeriCorps requirements do not specifically address timesheet procedures. It is, however,\ngood business practice to initial changes, make corrections without pencil or whiteout, sign\nand date documents, and check the accuracy of hours recorded on timesheets. Without\nprocedures to verify member activities or timesheet accuracy, the potential exists that\nmembers may perform prohibited activities or may receive education awards to which they\nare not entitled. By initialing changes, accountability is maintained that timesheets are\nconsistent with member and management intentions.\n\nRecommendation: We recommend that the Corporation require OneStar to strengthen its\nsubgrantee training and program monitoring procedures to ensure that subgrantees verify the\naccuracy and reasonableness of service hours reported in WBRS and on timesheets, maintain\nmember timesheets in member files, and have policies to ensure that timesheets are properly\ncompleted. We also recommend that the Corporation review the results of OneStar\nmonitoring visits until the Corporation is confident of the effectiveness of the strengthened\ntraining and policies and procedures. We further recommend that the Corporation recover\neducation awards for members who did not meet the minimum service hour requirements.\n\nOneStar\xe2\x80\x99s Response: OneStar provides detailed instructions and guidance to its subgrantees\non the importance of accurately recording and compiling member time and attendance.\nOneStar will strengthen its subgrantee training and program monitoring procedures to ensure\nthat subgrantees verify the accuracy and reasonableness of service hours.\n\nAdditional Comments: OneStar\xe2\x80\x99s corrective actions, as described, are responsive to our\nrecommendations. The Corporation should review the results of OneStar\xe2\x80\x99s site monitoring\nvisits to ensure corrective actions are implemented and should freeze or recover education\nawards for those members without timesheets that support required service hours.\n\n\n\n\n 26\n\x0c5. Subgrantees did not always complete member enrollment, exit, and change-of-\n status forms and enter them into WBRS in accordance with AmeriCorps\n requirements.\n\nWe tested enrollment, exit, and change-of-status forms for 178 members at 6 subgrantees.\nSubgrantees did not enter member enrollment, exit, and change-of-status forms into WBRS\nwithin the required 30-day timeframe, as follows:\n\n Forms Entered Late\n Subgrantee Enrollment Exit Change-of-Status\n HRC 1 2\n ACEE 7 1\n AYW 1 4 9\n AYH 35 25 _\n Total 44 32 9\n\nIn addition, we identified enrollment and exit forms that were missing or were not completed\nand dated when signed. In some cases, the original signature date was predated or changed to\nreflect the member\xe2\x80\x99s start or exit date entered into WBRS.\n\n Unsigned Signature Date\n and/or Incorrect or\n Subgrantee Missing Undated Changed\n ACEE 4\n CIS 1 2 4\n AYH 2 6\n AISD 2 1 29\n Total 3 9 39\n\nAmeriCorps Provisions, B.8.c., Terms of Service, Notice to the Corporation\xe2\x80\x99s National\nService Trust, requires that the grantee notify the Corporation within 30 days of a member\xe2\x80\x99s\nenrollment, suspension, and/or completion of service. AmeriCorps Provisions, B.16.b.ii.,\nMember Related Forms, Change of Status Forms, requires member change-of-status forms to\nbe submitted no later than 30 days after member status is changed. AmeriCorps Provisions,\nC.27, Retention of Records, requires grantees to retain all program records for 3 years from\nthe date of submission of the final FSR. Without timely completion and submission of\nenrollment, change-of-status, and exit forms, the Corporation cannot maintain accurate\nmember records.\n\nAdditionally, six AYH and two AISD member enrollment forms were completed and signed\nin pencil, and whiteout was used to change the dates of signature on four AYH member exit\nforms. AmeriCorps requirements do not specifically address procedures for preparing forms.\nIt is, however, good business practice to prepare, sign, and date documents in ink. When\n\n\n\n 27\n\x0cmember forms are prepared with pencil and undated, it is difficult to determine if\nunauthorized alterations have been made, and an audit trail does not exist to determine if the\nchanges were authorized.\n\nSignature dates must be accurate because it is one of the factors in determining when an\napplicant becomes a member, which determines the timing of Corporation actions.\nUnauthorized alterations could affect member eligibility for education awards. In addition, it\ncould affect information provided to Congress with regard to the fiscal integrity of the\nNational Service Trust, the funding source for education awards.\n\nRecommendation: We recommend that the Corporation require OneStar to strengthen its\nsubgrantee training and program monitoring procedures to ensure that member enrollment,\nexit, and change-of-status forms are completed in ink, signed and dated, maintained in\nmember files, submitted to the Corporation as required, and maintained in member files.\nSuch training and strengthened procedures should be sufficient to ensure actions with regard\nto such forms be taken within 30 days and that dates of signature will not be altered.\n\nOneStar\xe2\x80\x99s Response: OneStar provides its subgrantees detailed and specific guidance on the\nimportance of accurately recording member enrollment, exit, and change-of-status. OneStar\nwill work with the Corporation to strengthen the ability of its subgrantees to comply with\nthese policies and procedures.\n\nAdditional Comments: OneStar\xe2\x80\x99s comments do not indicate whether it will provide\nadditional training and program monitoring of subgrantees to ensure that enrollment, exit and\nchange-of-status forms are properly completed and maintained. The Corporation should\nrequire OneStar to strengthen these areas and then monitor to ensure the corrections were\nimplemented and effective.\n\n6. Some member contracts were not signed before applicants started service, were\n missing, or did not include all required elements.\n\nWe tested member contracts for 178 members at 6 subgrantees. Member contracts must be\nsigned by the member, and if the member is under 18 years of age, by the member\xe2\x80\x99s parent or\nguardian before starting service. Applicants become members only after signing the\ncontract; therefore service hours recorded before signing are not eligible as hours of service\nthat would count towards earning an education award.\n\nIn a number of instances, the member contract was not signed before the member started\nservice, or the signature date on the contract was later changed to the member\xe2\x80\x99s start date. In\nseveral instances, service hours recorded subsequent to the contract signing date were\ninsufficient to warrant an education award, as follows:\n\n\n\n\n 28\n\x0c Signed Signature Questioned\n After Service Date Education\n Subgrantee Start Changed Amounts\n AYW 10 $4,725\n CIS 5 3,750\n ACEE 2\n HRC 1\n AISD 12 3,600\n AYH 4 11 2,363\n Total 34 11 $14,438\n\nIn addition, we noted that:\n\n \xe2\x80\xa2 CIS and AISD were each unable to provide a contract for one member.\n\n \xe2\x80\xa2 AISD\xe2\x80\x99s member contract did not include a position description, although this\n information was provided as a separate document. AISD did not provide a\n position description for one member, and 17 position descriptions were signed\n after the members\xe2\x80\x99 start date.\n\n \xe2\x80\xa2 AISD\xe2\x80\x99s member contract did not address Drug-Free Workplace Act\n requirements. These requirements were communicated to members with\n another document, an Acknowledgement of Drug-Free Policy. We noted,\n however, that 17 members did not sign this document, and 8 members signed\n it after their start dates.\n\nAmeriCorps Provisions, B.8.d., Member Enrollment Procedures, stipulates that AmeriCorps\nprograms are required to sign a member contract with an individual or otherwise enter a\nlegally enforceable commitment as defined by state law before enrolling a member. Further,\nAmeriCorps Provisions, B.6.g., Parental Consent, require that individuals under 18 years of\nage must provide written consent from a parent or legal guardian before program enrollment.\nMembers are not considered enrolled in the program until the contract is signed, and service\nhours recorded before signing the member contract are not counted toward member\neducation awards.\n\nAmeriCorps Provisions, B.7.b., Training, Supervision and Support, Member Contracts,\nrequires members to sign contracts that stipulate responsibilities and rights, including\nposition descriptions and requirements, under the Drug-Free Workplace Act. Failure to sign\nmember contracts that include all necessary stipulations could result in members being\nunaware of their rights and responsibilities.\n\nRecommendation: We recommend that the Corporation require OneStar to strengthen its\nsubgrantee training and program monitoring procedures to ensure that a signed and dated\ncontract, which stipulates all member responsibilities and rights, is obtained before members\n\n\n\n 29\n\x0cbegin service and retained for each member for each year of service. We further recommend\nthat the Corporation disallow, and if already used, recover education awards awarded to\nmembers that did not serve the minimum required service hours.\n\nOneStar\xe2\x80\x99s Response: OneStar has strengthened its member-eligibility training and policies.\nOneStar will work with the Corporation to strengthen subgrantee policies and procedures to\nensure that member contracts are signed before an applicant becomes a member and to more\naccurately account for member hours worked.\n\nAdditional Comments: OneStar\xe2\x80\x99s corrective actions, as described, are responsive to our\nrecommendations. The Corporation should follow up to ensure actions taken were\nimplemented and effective and freeze or recover education awards for members with\ninsufficient service hours.\n\n7. Some subgrantees did not always document member orientation attendance.\n\nWe tested orientation attendance for 178 members at 6 subgrantees. Five subgrantees could\nnot provide documentation to show that all members received orientation covering the\nAmeriCorps program and requirements before starting service, as follows:\n\n \xe2\x80\xa2 CIS did not provide sign-in sheets or other evidence that six members\n attended orientation. One was a PY 2004-2005 member who entered the\n program after the preservice orientation. The other five were PY 2005-2006\n Education Award Only (EAO) members who would normally attend an\n AmeriCorps EAO orientation and enrollment session at a different time than\n other members.\n\n \xe2\x80\xa2 AYW had no documentation to show that 11 members in PY 2005-2006\n attended orientation. The subgrantee considered the member timesheets as\n sufficient documentation of attendance, but these timesheets did not indicate\n member activities.\n\n \xe2\x80\xa2 HRC did not provide documentation that four PY 2005-2006 members\n received orientation. These members started the program late, and their\n timesheets did not indicate that they attended the orientation required by HRC\n before starting service.\n\n \xe2\x80\xa2 ACEE did not provide support to show that two members, one member in PY\n 2003-2004 and one in PY 2005-2006, attended orientation. In both instances,\n ACEE did not provide sign-in sheets for these members, and their timesheets\n did not identify orientation hours.\n\n \xe2\x80\xa2 AYH did not provide documentation to show that one PY 2004-2005 member\n received an orientation.\n\n\n\n\n 30\n\x0cAmeriCorps Provisions, B.7.c., Training, Supervision, and Support, states that grantees are\nrequired to provide members with the training, skills, knowledge, and supervision necessary\nto perform tasks required in their assigned project positions, including specific training in a\nparticular field and background information on the community served. Additionally,\nAmeriCorps Provisions, C.27, requires grantees to retain all program records for 3 years from\nthe date of submission of the final FSR.\n\nRecommendation: We recommend that the Corporation require OneStar to strengthen its\nsubgrantee training and program monitoring procedures to ensure that subgrantees retain\ndocumentation to support member attendance at orientation.\n\nOneStar\xe2\x80\x99s Response: OneStar has strengthened its subgrantee training and will continue to\nmonitor program procedures to ensure that subgrantees retain documentation supporting\nmember orientation attendance.\n\nAdditional Comments: OneStar\xe2\x80\x99s corrective actions, as described, are responsive to our\nrecommendation. The Corporation should follow up to be sure that OneStar\xe2\x80\x99s improvements\nare working as intended.\n\n8. Subgrantees did not, in some instances, conduct member evaluations that met\n AmeriCorps requirements and did not document all evaluations.\n\nWe tested member evaluations for 178 members at 6 subgrantees. The subgrantees did not\nprovide documentation that some members received mid-term and final evaluations, and\nmany of the evaluations tested were missing either member or supervisor signatures. The\nmissing and unsigned evaluations that we identified follow:\n\n Mid-Term\n Evaluations Final Evaluations\n Subgrantee Missing Unsigned Missing Unsigned\n HRC 12 1\n ACEE 1 3 1\n CIS 3 2\n AYH 12 8\n AISD 2 4 3 17\n AYW 7 11 17 7\n Total 10 15 50 36\n\nAll final evaluations tested at ACEE, HRC, CIS, AYH, and AISD, and two of the final\nevaluations tested at AYW did not indicate if the member had completed the required\nnumber of service hours to be eligible for an education award. In addition, many of the\nHRC, ACEE, AISD, and AYW final evaluations tested were conducted and signed before the\nmember\xe2\x80\x99s end date, in some cases more than 30 days before the end date.\n\n\n\n\n 31\n\x0cAmeriCorps Provisions, B.7.g., Performance Reviews, states that grantees must conduct and\nkeep a record of at least a midterm and end-of-term written evaluation of each member\xe2\x80\x99s\nperformance for full and half-time members, and an end-of-term written evaluation for less\nthan half-time members. The evaluation should document that the member has:\n\n \xe2\x80\xa2 Completed the required number of hours;\n \xe2\x80\xa2 Satisfactorily completed assignments; and\n \xe2\x80\xa2 Met other performance criteria communicated at the beginning of the service\n term.\n\nEvaluations are necessary to ensure that members are eligible for additional service terms,\nand that grant objectives have been met. One AYH member without a PY 2004-2005 final\nevaluation returned for a second term in PY 2005-2006. Without an evaluation, members are\nnot eligible to serve an additional term of service. We questioned the member\xe2\x80\x99s PY 2005-\n2006 living allowance of $2,673, as explained in Schedule F, Note 4.\n\nRecommendation: We recommend that the Corporation require OneStar to strengthen its\nsubgrantee training and program monitoring procedures to ensure that subgrantees conduct\nand document member evaluations that meet AmeriCorps program requirements. We further\nrecommend that the Corporation follow up with OneStar to determine the amount of the\nAYH member\xe2\x80\x99s living allowance, related benefits, and related administrative costs to be\ndisallowed and recovered.\n\nOneStar\xe2\x80\x99s Response: OneStar has strengthened its subgrantee training and will continue to\nmonitor program procedures to ensure that subgrantees conduct and document member\nevaluations meeting AmeriCorps program requirements.\n\nAdditional Comments: OneStar\xe2\x80\x99s corrective actions, as described, are responsive to our\nrecommendations. The Corporation should follow up to determine whether OneStar\xe2\x80\x99s\nactions were adequate and determine the amount to be disallowed and recovered for the\nreturning AYH member who did not have a prior final evaluation.\n\n9. Some Subgrantee financial management systems did not adequately account for\n and report grant costs and related program income in accordance with Federal\n requirements.\n\nWe noted several instances in which subgrantees were not accounting for and reporting grant\ncosts and related program income in accordance with Federal requirements, as follows:\n\n \xe2\x80\xa2 HRC and AYH did not identify and segregate Federal and match costs in their\n accounting systems. As required by 45 CFR \xc2\xa7 2543.21(b), recipient financial\n management systems shall provide for accurate, current, and complete\n disclosure of financial results of each Federally sponsored program.\n Commingling of Federal and match costs might result in subgrantees not\n meeting their match requirements. Further, 45 CFR \xc2\xa7 2521.45 establishes\n grant requirements for matching program costs. Paragraph (b), Program\n\n\n 32\n\x0c Operating Costs, states that the Corporation share of program operating costs\n may not exceed 67 percent. HRC claimed 85.43 percent of program operating\n costs for PY 2005-2006 as Corporation share. We did not question HRC costs\n for the unmet match because the program year had not yet ended.\n\n\xe2\x80\xa2 HRC did not have documentation to support allocation percentages for\n donated and leased space claimed in-kind contributions and match costs.\n However, 45 CFR \xc2\xa7 2543.23 states that contributions may be accepted to the\n extent the costs are verifiable from the recipient\xe2\x80\x99s records. It further states\n that the basis for determining the valuation of contributions must be\n documented.\n\n\xe2\x80\xa2 HRC and AYW did not report program income on their FSRs. However,\n 45 CFR \xc2\xa7 2543.24, Program income, requires that program income be\n deducted from outlays. FSR instructions require that program income be\n reported on the form. Staff members responsible for financial reporting at\n HRC and AYW were unaware of this reporting requirement. If subgrantees\n do not report program income on FSRs, State commissions and the\n Corporation are not made aware of additional funding used to support\n program costs and cannot be assured of correct accounting for these amounts.\n\n\xe2\x80\xa2 HRC, AYH, and AYW did not submit FSRs and progress reports in\n accordance with the subgrant requirements. AmeriCorps Provisions, B.16.,\n Reporting Requirements, states that grantees are responsible for setting\n subgrantee reporting requirements, and that subgrantees must adhere to\n reporting requirements outlined and communicated by the grantee for the\n program year. OneStar\xe2\x80\x99s subgrant provisions included due dates for each\n quarterly FSR and progress report to be submitted on WBRS. AYW did not\n submit four quarterly FSRs in PY 2003-2005, and HRC did not submit one\n PY 2004-2005 progress report. In addition, we identified reports submitted\n after the subgrant due dates as follows:\n\n Financial Status\n Reports Progress Reports\n Subgrantee Number Days Late Number Days Late\n HRC 2 4-6 2 3-5\n AYH 2 3-97 1 38\n AISD 3 199-554\n ACEE 1 38\n AYW 3 7-642\n\n Not submitting subgrantee FSRs and progress reports on time can adversely\n impact OneStar\xe2\x80\x99s ability to submit complete and accurate reports to the\n Corporation.\n\n\n\n\n 33\n\x0cRecommendation: We recommend that the Corporation require OneStar to provide training\nto ensure that subgrantees are aware of the necessity of:\n\n \xe2\x80\xa2 Identifying and segregating Federal and match costs on their accounting\n records;\n\n \xe2\x80\xa2 Properly documenting amounts claimed as in-kind contributions and match\n costs;\n\n \xe2\x80\xa2 Reporting program income as required; and\n\n \xe2\x80\xa2 Reporting grant progress in a timely manner.\n\nIn addition, we recommend that the Corporation follow up with OneStar to determine\nwhether the training was effective.\n\nOneStar\xe2\x80\x99s Response: OneStar has been diligently working with certain subgrantees to\ndocument and verify their reported program income and costs. OneStar will review and\nstrengthen its training processes to ensure subgrantees are aware of and follow all grant\nrequirements.\n\nAdditional Comments: OneStar\xe2\x80\x99s corrective actions, as described, are responsive to our\nrecommendations.\n\n\n\n\n 34\n\x0c APPENDIX A\n\nONESTAR NATIONAL SERVICE COMMISSION\xe2\x80\x99S RESPONSE TO AGREED-UPON PROCEDURES\n REPORT\n\x0c\x0c\x0c\x0c\x0c\x0c APPENDIX B\n\nCORPORATION\xe2\x80\x99S RESPONSE TO AGREED-UPON PROCEDURES REPORT\n\x0c gkAL&\nCOMMUNITY\n\n\n Gerald Walpin, Inspector General\n\nFrom: Margaret Rosenbeny, Director of Grants Management @-b@\n 14\nCc: Jew Bridges, Chief Financial Officer\n Kristin McSwain, Director of AmeriCorps\n William Anderson, Deputy CFO for Finance\n Andrew Kleine, Deputy CFO for Planning and Program Management\n Sherry Blue, Audit Resolution Coordinator, Office of the CFO\n\nDate: June 15,2007\n\nSubject: Response to OIG Draft Audit Report: Agreed-upon Procedues for Corporation\n Grants awarded to the Onestar National Service Commission\n\n\nThank you for the opportunity to review the draft audit report of the Corporation's grants awarded to\nthe Texas commission, OneStar National Service Commission. We do not have specific comments\nat this time. We will respond to all findings and recommendations in our management decision\nwhen the final audit is issued; we have reviewed the findings in detail; and worked with the\nCommission to resolve the audit.\n\x0c"