Maricopa county community college district single audit reporting package FY 2002 |
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Single Audit A REPORT TO THE ARIZONA LEGISLATURE Maricopa County Community College District June 30, 2002 Financial Audit Division Debra K. Davenport Auditor General The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators and five representatives. Her mission is to provide independent and impartial information and specific recommendations to improve the operations of state and local government entities. To this end, she provides financial audits and accounting services to the State and political subdivisions, investigates possible misuse of public monies, and conducts performance audits of school districts, state agencies, and the programs they administer. Copies of the Auditor General’s reports are free. You may request them by contacting us at: Office of the Auditor General 2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333 Additionally, many of our reports can be found in electronic format at: www.auditorgen.state.az.us Maricopa County Community College District Single Audit Reporting Package June 30, 2002 Table of Contents Page Comprehensive Annual Financial Report Issued separately Reports on Compliance and Internal Control Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Compliance in Accordance with OMB Circular A-133 3 Schedule of Expenditures of Federal Awards 5 Schedule of Findings and Questioned Costs Summary of Auditors’ Results 9 Financial Statement Findings 10 District Responses Corrective Action Plan 11 Summary Schedule of Prior Audit Findings 14 2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051 DEBRA K. DAVENPORT, CPA AUDITOR GENERAL STATE OF ARIZONA OFFICE OF THE AUDITOR GENERAL WILLIAM THOMSON DEPUTY AUDITOR GENERAL Independent Auditors’ Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Members of the Arizona State Legislature The Governing Board of Maricopa County Community College District We have audited the basic financial statements of Maricopa County Community College District as of and for the year ended June 30, 2002, and have issued our report thereon dated January 17, 2003, which was modified as to consistency because of the implementation of Governmental Accounting Standards Board Statement No. 35. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the District’s basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of basic financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. We also noted certain immaterial instances of noncompliance that we will report to the District’s management in a separate letter. Internal Control over Financial Reporting In planning and performing our audit, we considered the District���s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on internal control over financial reporting. However, we noted certain matters involving internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control over financial reporting that, in our judgment, could adversely affect the District’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the basic financial statements. Reportable conditions are described in the accompanying schedule of findings and questioned costs as items 02-01 and 02-02. 2 A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the basic financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of internal control over financial reporting would not necessarily disclose all such internal control matters that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above is a material weakness. We also noted certain matters involving internal control over financial reporting that we will report to the District’s management in a separate letter. This report is intended solely for the information and use of the members of the Arizona State Legislature, the Governing Board, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Dennis L. Mattheisen, CPA Financial Audit Director January 17, 2003 2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051 DEBRA K. DAVENPORT, CPA AUDITOR GENERAL STATE OF ARIZONA OFFICE OF THE AUDITOR GENERAL WILLIAM THOMSON DEPUTY AUDITOR GENERAL Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 Members of the Arizona State Legislature The Governing Board of Maricopa County Community College District Compliance We have audited the compliance of Maricopa County Community College District with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2002. The District’s major federal programs are identified in the Summary of Auditors’ Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the District’s management. Our responsibility is to express an opinion on the District’s compliance based on our audit. We conducted our audit of compliance in accordance with U.S. generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the District’s compliance with those requirements. In our opinion, Maricopa County Community College District complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2002. 3 4 Internal Control over Compliance The District’s management is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the District’s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of internal control over compliance would not necessarily disclose all such internal control matters that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Expenditures of Federal Awards We have audited the District’s basic financial statements as of and for the year ended June 30, 2002, and have issued our report thereon dated January 17, 2003, which was modified as to consistency because of the implementation of Governmental Accounting Standards Board Statement No. 35. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the members of the Arizona State Legislature, the Governing Board, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Dennis L. Mattheisen, CPA Financial Audit Director March 12, 2003, except for the schedule of expenditures of federal awards, for which the date is January 17, 2003 Maricopa County Community College District Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 CFDA Pass- Total Number Pass-Through Direct Through Expenditures Federal Grantor/Pass-Through Grantor/Program Title (Note 2) Grantor's Number Expenditures Expenditures (Note 3) U.S. Agency for International Development Passed through the Association Liaison Office for University Cooperation in Development Microenterprise and Health Care Initiatives 02.unknown HNE-A-00-97-00059-00 $ 8,835 $ 40,744 $ 49,579 U.S. Department of Agriculture Passed through the Arizona Department of Education Special Milk Program for Children 10.556 KR98-0413/14 17 17 Child and Adult Care Food Program 10.558 07-24-18, 07-24-27, 07-22-03 13,666 13,666 Total U.S. Department of Agriculture 13,683 13,683 U.S. Department of Housing and Urban Development Direct Grants Community Development Block Grants/Economic Development Initiative 14.246 43,236 43,236 Passed through the City of Mesa Community Development Block Grants/Entitlement Grants 14.218 8250 6,383 6,383 Passed through Maricopa County Community Development Block Grants/Entitlement Grants 14.218 DG0004 14,655 14,655 Total U.S. Department of Housing and Urban Development 64,274 64,274 U.S. Department of Justice Passed through the Governor's Office of Community and Family Programs Violence Against Women Formula Grants 16.588 A0-0025-003, AD010270-007 98,879 98,879 U.S. Department of Labor Passed through the American Association of Community Colleges Employment Services and Job Training Pilots—Demonstrations and Research 17.249 X-7046-8-00-80-60 6,700 6,700 U.S. Department of State Passed through Arizona State University College and University Affiliations Program 19.406 ASKS-1162 26,432 26,432 Library of Congress Passed through Education and Research Consortium American Mind 42.unknown 00G-LIB-ND001 67,194 67,194 National Aeronautics and Space Administration Passed through Tuskegee University Aerospace Education Services Program 43.001 30 12090 072 9,431 9,431 National Foundation on the Arts and the Humanities Passed through San Diego Mesa Community College Faces of America 45.unknown None 4,350 4,350 National Science Foundation Direct grants Education and Human Resources 47.076 849,711 12,460 862,171 Passed through the American Association of Community Colleges Education and Human Resources 47.076 DUE-0087049 2,765 2,765 Passed through the Arizona Board of Regents Education and Human Resources 47.076 ESR-0135526 8,815 8,815 Passed through Arizona State University Education and Human Resources 47.076 01-035 59,773 59,773 (Continued) See accompanying notes to schedule. 5 Maricopa County Community College District Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 (Continued) CFDA Pass- Total Number Pass-Through Direct Through Expenditures Federal Grantor/Pass-Through Grantor/Program Title (Note 2) Grantor's Number Expenditures Expenditures (Note 3) National Science Foundation (Concl'd) Passed through the Northeast Center for Telecommunications Technologies Education and Human Resources 47.076 None $ 2,639 $ 2,639 Passed through the University of Arizona Education and Human Resources 47.076 Y541198 129,448 $ 41,628 171,076 Passed through the University of New Mexico Education and Human Resources 47.076 DUE-0101311 18,833 18,833 Total National Science Foundation 1,071,984 54,088 1,126,072 U.S. Small Business Administration Direct grants Small Business Development Center 59.037 559,445 689,747 1,249,192 U.S. Department of Education Direct grants Student Financial Assistance Cluster Federal Supplemental Educational Opportunity Grants 84.007 1,620,260 1,620,260 Federal Family Education Loans 84.032 28,262,449 28,262,449 Federal Work-Study Program 84.033 1,984,457 1,984,457 Federal Perkins Loan Program—Federal Capital Contributions 84.038 1,620,349 1,620,349 Federal Pell Grant Program 84.063 32,099,836 32,099,836 Federal Direct Student Loans 84.268 4,537,984 4,537,984 Total Student Financial Assistance Cluster 70,125,335 70,125,335 Higher Education—Institutional Aid 84.031 876,128 876,128 TRIO Cluster TRIO—Student Support Services 84.042 379,675 379,675 TRIO—Upward Bound 84.047 285,198 285,198 Total TRIO Cluster 664,873 664,873 Fund for the Improvement of Postsecondary Education 84.116 25,248 25,248 Business and International Education Projects 84.153 80,912 80,912 Total direct grants 71,772,496 71,772,496 Passed through the Arizona Board of Regents Leveraging Educational Assistance Partnership 84.069 None 198,288 198,288 Eisenhower Professional Development State Grants 84.281 99-0000-02, 992000-03 56,460 56,460 Total passed through the Arizona Board of Regents 254,748 254,748 Passed through the Arizona Department of Education Adult Education—State Grant Program 84.002 02FAEABE-270579-01A, 01-FAEABE-170579-02A, 02-FAECIV-270579-03A 1,619,409 1,619,409 Tech-Prep Education 84.243 02-FVEDTP-270576-01A, 01-FVEDTP-170576-01A 229,199 917 230,116 Total passed through the Arizona Department of Education 1,848,608 917 1,849,525 Passed through Arizona State University Special Education—Grants to States 84.027 01-03-ED 38,295 38,295 Bilingual Education—Professional Development 84.195 T195E000022 46,077 46,077 Special Education—Personnel Preparation to Improve Services and Results for Children with Disabilities 84.325 H325H000087 89,662 89,662 Teacher Quality Enhancement Grants 84.336 00163, 00173 362,990 362,990 Total passed through Arizona State University 537,024 537,024 (Continued) See accompanying notes to schedule. 6 Maricopa County Community College District Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 (Continued) CFDA Pass- Total Number Pass-Through Direct Through Expenditures Federal Grantor/Pass-Through Grantor/Program Title (Note 2) Grantor's Number Expenditures Expenditures (Note 3) U.S. Department of Education (Concl'd) Passed through the El Camino Community College District Training Interpreters for Individuals who are Deaf and Individuals who are Deaf-Blind 84.160 H160A000009 $ 2,494 $ 2,494 Passed through the Polaris Joint Vocational School District Technology Innovation Challenge Grants 84.303 R303A980063 458,014 458,014 Passed through the State Board of Directors for Community Colleges Vocational Education—Basic Grants to States 84.048 30204, 30104 885,562 885,562 Total U.S. Department of Education 75,758,946 $ 917 75,759,863 U.S. Department of Health and Human Services Passed through the Maricopa County Human Services Department Head Start 93.600 C-22-01-018-2 4,773 4,773 Corporation for National and Community Service Direct grants Learn and Serve America—Higher Education 94.005 149,559 127,909 277,468 Passed through the American Association of Community Colleges Learn and Serve America—Higher Education 94.005 00LHEDC001 3,673 3,673 Total for Corporation for National and Community Service 153,232 127,909 281,141 Total Expenditures of Federal Awards $ 77,848,158 $ 913,405 $ 78,761,563 See accompanying notes to schedule. 7 Maricopa County Community College District Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 8 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Maricopa County Community College District and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Note 2 - Catalog of Federal Domestic Assistance (CFDA) Numbers The program titles and CFDA numbers were obtained from the federal or pass-through grantor or the 2000 or 2002 Catalog of Federal Domestic Assistance. When no CFDA number had been assigned and no contract number exists, the first two digits applicable to the federal agency were used followed by a period and the word “unknown”. Note 3 - Loans Outstanding The expenditures reported on the Schedule of Expenditures of Federal Awards for the Federal Perkins Loan Program—Federal Capital Contributions (CFDA No. 84.038) included loan balances outstanding at June 30, 2002, of $1,461,044. Maricopa County Community College District Schedule of Findings and Questioned Costs Year Ended June 30, 2002 9 Summary of Auditors’ Results Financial Statements Type of auditors’ report issued: Unqualified Yes No Material weakness identified in internal control over financial reporting? X Reportable conditions identified not considered to be a material weaknesses? X Noncompliance material to the financial statements noted? X Federal Awards Material weakness identified in internal control over major programs? X Reportable condition identified not considered to be a material weakness? X (None reported) Type of auditors’ report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133 (section .510[a])? X Identification of major programs: CFDA Number Name of Federal Program or Cluster 47.076 Education and Human Resources 84.002 Adult Basic Education Student Financial Assistance Cluster: 84.007 Federal Supplemental Educational Opportunity Grants 84.032 Federal Family Education Loans 84.033 Federal Work-Study Program 84.038 Federal Perkins Loan Program—Federal Capital Contributions 84.063 Federal Pell Grant Program 84.268 Federal Direct Loan Dollar threshold used to distinguish between Type A and Type B programs: $1,330,223 Auditee qualified as low-risk auditee? X Other Matters Auditee's summary schedule of prior audit findings required to be reported in accordance with Circular A-133 (section .315[b])? X Maricopa County Community College District Schedule of Findings and Questioned Costs Year Ended June 30, 2002 10 Financial Statement Findings 02-01 The District needs to continue its efforts to establish necessary internal control over external access to its information technology (IT) resources The District has not implemented adequate security over external access to its IT resources. Since the District is moving to a web-based environment, the District is more vulnerable to unauthorized external access. The District’s student information system is exposed to external access and manipulation. Similar findings included in our single audit report in the prior year have been partially addressed. However, the District has yet to implement measures to restrict external access to the District’s student information system at the campus level. Additionally, the District should proactively configure and monitor IT resources for security at the campus level. To follow prudent business practices, the District should continue its implementation of adequate security practices to protect IT resources and systems from unauthorized access and manipulation. 02-02 The District needs to establish and test written disaster recovery plans The District did not have a written disaster recovery plan for processing critical jobs on some of its significant systems in the event of a major hardware or software failure. If a major hardware or software failure were to occur, the District might be unable to process its transactions until the failure was corrected. To help ensure the continuity of operations and the preservation of records, the District should establish and document a disaster recovery plan for all of its critical IT systems. This plan should be updated and tested on a regular basis and stored off-site. Further, to follow prudent business practices, the District should implement a disaster recovery plan for each of its significant IT systems and test those plans on a regular basis. 11 March 18, 2003 Ms. Debbie Davenport Auditor General 2910 N. 44th Street, Suite 410 Phoenix, AZ 85018 Dear Ms. Davenport: The accompanying corrective action plan has been prepared as required by U.S. Office of Management and Budget Circular A-133. Specifically, we are providing you with the names of the contact persons responsible for the corrective action, the corrective action planned, and the anticipated completion date for each audit findings included in the fiscal year ended June 30, 2002 Schedule of Findings and Questioned Costs. Sincerely, Jeffrey J. West, MBA Director of Financial Services and Controller 12 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Corrective Action Plan Year Ended June 30, 2002 Financial Statement Findings 02-01 The District needs to continue its efforts to establish necessary internal control over external access to its information technology (IT) resources. Contact Persons: Jeffrey West Carol Myers Anticipated Completion Date: June 30, 2003 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Response: Concur. On March 11, 2003, ITS Security Services implemented Maricopa’s network perimeter firewall, Virtual Private Network (VPN), and a dynamic Intrusion Detection System. Firewalls and IDS’ have been in place on CFS and HR, and IDS has been in place at Maricopa’s point-of-presence to the Internet for a year. The network perimeter firewalls are blocking known malicious traffic, suspected malicious traffic, and more rules will be added that mirror the SANS Top 20 Known Vulnerabilities. The dynamic IDS system, as well as the firewall, will be dropping malicious packets before they enter Maricopa’s network. The VPN allows for secure, encrypted sessions for all Maricopa employees who access administrative applications and systems from a remote location. No other traffic will be allowed. ITS Security Services is working with several campuses on their firewall and IDS implementations, one of which is deployed. Certificate Authority protects the new student system. Maricopa is its own Certificate Authority, and the highest encryption possible is in place. ITS Security Services controls all account creation for Certificate Authority and VPN. The legacy SIS system is under analysis for the capability of allowing for encrypted sessions using SSH. There are two solutions and the solution with the least impact on the end users, but has strong encryption will be implemented. This finding differs substantially from the last year’s finding in that the Maricopa enterprise network infrastructure is now protected with firewalls and IDS. 13 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Corrective Action Plan Year Ended June 30, 2002 02-02 The District needs to establish and test written disaster recovery plans. Contact Persons: Jeffrey West Tom Russo Anticipated Completion Date: September 30, 2004 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Response: Concur. The District has an IT Computer Center Disaster Recovery Plan that covers the worst-case scenario of our critical IT systems. Each critical IT system does not have its own separate plan at this time, except for the District’s College Financial System (see Summary Schedule of Prior Audit Findings, finding number 01-02), but is covered in this IT Computer Center Disaster Recovery Plan. The Plan has not been tested as of this date. The Vice Chancellors of ITS and Human Resources are in the process of addressing the Human Resource System Disaster Recovery Plan. Initial development of the plan is due to begin in late April 2003. It is projected that a working template of a disaster recovery plan should be completed within 6-9 months. There are no plans for disaster recovery contingencies for the legacy Student Information System, currently scheduled for replacement in late 2004. However, ITS management will be presenting infrastructure and budget plans to include a disaster recovery component as final design features of the New Student System are brought on line over the next 18 months. 14 March 18, 2003 Ms. Debbie Davenport Auditor General 2910 N. 44th Street, Suite 410 Phoenix, AZ 85018 Dear Ms. Davenport: The accompanying summary schedule of prior audit findings has been prepared as required by U.S. Office of Management and Budget Circular A-133. Specifically, we are reporting the status of audit findings included in the prior audit’s Schedule of Findings and Questioned Costs related to the District’s financial statements and federal awards. Sincerely, Jeffrey J. West, MBA Director of Financial Services and Controller Maricopa County Community College District Summary Schedule of Prior Audit Findings Year Ended June 30, 2002 15 Status of Financial Statement Findings The District has made great progress in certain areas of this finding. Additional security policies have been established (see http://www.maricopa.edu/security), implementation of a network perimeter firewall, internal firewall, Virtual Private Network (VPN), dynamic Intrusion Detection System (IDS), and email and network/desktop antivirus protection at all locations. In addition, standards have been set for system administrators, security administrators have been assigned at each college, and naming conventions have been changed to hide hardware to avoid manipulation. For additional information, please see the District’s corrective action plan for current year finding number 02-01. In June 2001, an initial disaster recovery plan was completed for the District’s College Financial System (CFS). This plan has been updated and expanded since it’s initial version. The plan includes identification of personnel assigned to disaster recovery teams with operating procedures and emergency phone numbers, arrangements for a designated physical facility, risk analysis identifying the critical applications and exposures, and arrangements with vendors to support the needed documents and forms. This plan is set to be tested in Spring 2003. Any necessary modifications resulting from testing will be incorporated into the disaster recovery plan. Please see the District’s corrective action plan for current year finding number 02-02 for additional information regarding disaster recovery plans applicable to the District’s other primary systems. Status of Federal Award Findings and Questioned Costs Finding No. 01-01 Status: Partially corrected Finding No. 01-02 Status: Partially corrected CFDA No.: 47.076 Education and Human Resources Finding No. 01-101 Status: Fully corrected
Object Description
TITLE | Maricopa county community college district single audit reporting package |
CREATOR | Arizona Office of the Auditor General Financial Audit Division |
SUBJECT | Community colleges--Arizona--Finance--Statistics |
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TITLE | Maricopa county community college district single audit reporting package FY 2002 |
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Language | English |
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RIGHTS MANAGEMENT | Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution. |
DATE ORIGINAL | 2002-06-30 |
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DIGITAL IDENTIFIER | FY02 single audit.pdf |
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Full Text | Single Audit A REPORT TO THE ARIZONA LEGISLATURE Maricopa County Community College District June 30, 2002 Financial Audit Division Debra K. Davenport Auditor General The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators and five representatives. Her mission is to provide independent and impartial information and specific recommendations to improve the operations of state and local government entities. To this end, she provides financial audits and accounting services to the State and political subdivisions, investigates possible misuse of public monies, and conducts performance audits of school districts, state agencies, and the programs they administer. Copies of the Auditor General’s reports are free. You may request them by contacting us at: Office of the Auditor General 2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333 Additionally, many of our reports can be found in electronic format at: www.auditorgen.state.az.us Maricopa County Community College District Single Audit Reporting Package June 30, 2002 Table of Contents Page Comprehensive Annual Financial Report Issued separately Reports on Compliance and Internal Control Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Compliance in Accordance with OMB Circular A-133 3 Schedule of Expenditures of Federal Awards 5 Schedule of Findings and Questioned Costs Summary of Auditors’ Results 9 Financial Statement Findings 10 District Responses Corrective Action Plan 11 Summary Schedule of Prior Audit Findings 14 2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051 DEBRA K. DAVENPORT, CPA AUDITOR GENERAL STATE OF ARIZONA OFFICE OF THE AUDITOR GENERAL WILLIAM THOMSON DEPUTY AUDITOR GENERAL Independent Auditors’ Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Members of the Arizona State Legislature The Governing Board of Maricopa County Community College District We have audited the basic financial statements of Maricopa County Community College District as of and for the year ended June 30, 2002, and have issued our report thereon dated January 17, 2003, which was modified as to consistency because of the implementation of Governmental Accounting Standards Board Statement No. 35. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the District’s basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of basic financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. We also noted certain immaterial instances of noncompliance that we will report to the District’s management in a separate letter. Internal Control over Financial Reporting In planning and performing our audit, we considered the District���s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on internal control over financial reporting. However, we noted certain matters involving internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control over financial reporting that, in our judgment, could adversely affect the District’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the basic financial statements. Reportable conditions are described in the accompanying schedule of findings and questioned costs as items 02-01 and 02-02. 2 A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the basic financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of internal control over financial reporting would not necessarily disclose all such internal control matters that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above is a material weakness. We also noted certain matters involving internal control over financial reporting that we will report to the District’s management in a separate letter. This report is intended solely for the information and use of the members of the Arizona State Legislature, the Governing Board, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Dennis L. Mattheisen, CPA Financial Audit Director January 17, 2003 2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051 DEBRA K. DAVENPORT, CPA AUDITOR GENERAL STATE OF ARIZONA OFFICE OF THE AUDITOR GENERAL WILLIAM THOMSON DEPUTY AUDITOR GENERAL Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 Members of the Arizona State Legislature The Governing Board of Maricopa County Community College District Compliance We have audited the compliance of Maricopa County Community College District with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2002. The District’s major federal programs are identified in the Summary of Auditors’ Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the District’s management. Our responsibility is to express an opinion on the District’s compliance based on our audit. We conducted our audit of compliance in accordance with U.S. generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the District’s compliance with those requirements. In our opinion, Maricopa County Community College District complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2002. 3 4 Internal Control over Compliance The District’s management is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the District’s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of internal control over compliance would not necessarily disclose all such internal control matters that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Expenditures of Federal Awards We have audited the District’s basic financial statements as of and for the year ended June 30, 2002, and have issued our report thereon dated January 17, 2003, which was modified as to consistency because of the implementation of Governmental Accounting Standards Board Statement No. 35. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the members of the Arizona State Legislature, the Governing Board, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Dennis L. Mattheisen, CPA Financial Audit Director March 12, 2003, except for the schedule of expenditures of federal awards, for which the date is January 17, 2003 Maricopa County Community College District Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 CFDA Pass- Total Number Pass-Through Direct Through Expenditures Federal Grantor/Pass-Through Grantor/Program Title (Note 2) Grantor's Number Expenditures Expenditures (Note 3) U.S. Agency for International Development Passed through the Association Liaison Office for University Cooperation in Development Microenterprise and Health Care Initiatives 02.unknown HNE-A-00-97-00059-00 $ 8,835 $ 40,744 $ 49,579 U.S. Department of Agriculture Passed through the Arizona Department of Education Special Milk Program for Children 10.556 KR98-0413/14 17 17 Child and Adult Care Food Program 10.558 07-24-18, 07-24-27, 07-22-03 13,666 13,666 Total U.S. Department of Agriculture 13,683 13,683 U.S. Department of Housing and Urban Development Direct Grants Community Development Block Grants/Economic Development Initiative 14.246 43,236 43,236 Passed through the City of Mesa Community Development Block Grants/Entitlement Grants 14.218 8250 6,383 6,383 Passed through Maricopa County Community Development Block Grants/Entitlement Grants 14.218 DG0004 14,655 14,655 Total U.S. Department of Housing and Urban Development 64,274 64,274 U.S. Department of Justice Passed through the Governor's Office of Community and Family Programs Violence Against Women Formula Grants 16.588 A0-0025-003, AD010270-007 98,879 98,879 U.S. Department of Labor Passed through the American Association of Community Colleges Employment Services and Job Training Pilots—Demonstrations and Research 17.249 X-7046-8-00-80-60 6,700 6,700 U.S. Department of State Passed through Arizona State University College and University Affiliations Program 19.406 ASKS-1162 26,432 26,432 Library of Congress Passed through Education and Research Consortium American Mind 42.unknown 00G-LIB-ND001 67,194 67,194 National Aeronautics and Space Administration Passed through Tuskegee University Aerospace Education Services Program 43.001 30 12090 072 9,431 9,431 National Foundation on the Arts and the Humanities Passed through San Diego Mesa Community College Faces of America 45.unknown None 4,350 4,350 National Science Foundation Direct grants Education and Human Resources 47.076 849,711 12,460 862,171 Passed through the American Association of Community Colleges Education and Human Resources 47.076 DUE-0087049 2,765 2,765 Passed through the Arizona Board of Regents Education and Human Resources 47.076 ESR-0135526 8,815 8,815 Passed through Arizona State University Education and Human Resources 47.076 01-035 59,773 59,773 (Continued) See accompanying notes to schedule. 5 Maricopa County Community College District Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 (Continued) CFDA Pass- Total Number Pass-Through Direct Through Expenditures Federal Grantor/Pass-Through Grantor/Program Title (Note 2) Grantor's Number Expenditures Expenditures (Note 3) National Science Foundation (Concl'd) Passed through the Northeast Center for Telecommunications Technologies Education and Human Resources 47.076 None $ 2,639 $ 2,639 Passed through the University of Arizona Education and Human Resources 47.076 Y541198 129,448 $ 41,628 171,076 Passed through the University of New Mexico Education and Human Resources 47.076 DUE-0101311 18,833 18,833 Total National Science Foundation 1,071,984 54,088 1,126,072 U.S. Small Business Administration Direct grants Small Business Development Center 59.037 559,445 689,747 1,249,192 U.S. Department of Education Direct grants Student Financial Assistance Cluster Federal Supplemental Educational Opportunity Grants 84.007 1,620,260 1,620,260 Federal Family Education Loans 84.032 28,262,449 28,262,449 Federal Work-Study Program 84.033 1,984,457 1,984,457 Federal Perkins Loan Program—Federal Capital Contributions 84.038 1,620,349 1,620,349 Federal Pell Grant Program 84.063 32,099,836 32,099,836 Federal Direct Student Loans 84.268 4,537,984 4,537,984 Total Student Financial Assistance Cluster 70,125,335 70,125,335 Higher Education—Institutional Aid 84.031 876,128 876,128 TRIO Cluster TRIO—Student Support Services 84.042 379,675 379,675 TRIO—Upward Bound 84.047 285,198 285,198 Total TRIO Cluster 664,873 664,873 Fund for the Improvement of Postsecondary Education 84.116 25,248 25,248 Business and International Education Projects 84.153 80,912 80,912 Total direct grants 71,772,496 71,772,496 Passed through the Arizona Board of Regents Leveraging Educational Assistance Partnership 84.069 None 198,288 198,288 Eisenhower Professional Development State Grants 84.281 99-0000-02, 992000-03 56,460 56,460 Total passed through the Arizona Board of Regents 254,748 254,748 Passed through the Arizona Department of Education Adult Education—State Grant Program 84.002 02FAEABE-270579-01A, 01-FAEABE-170579-02A, 02-FAECIV-270579-03A 1,619,409 1,619,409 Tech-Prep Education 84.243 02-FVEDTP-270576-01A, 01-FVEDTP-170576-01A 229,199 917 230,116 Total passed through the Arizona Department of Education 1,848,608 917 1,849,525 Passed through Arizona State University Special Education—Grants to States 84.027 01-03-ED 38,295 38,295 Bilingual Education—Professional Development 84.195 T195E000022 46,077 46,077 Special Education—Personnel Preparation to Improve Services and Results for Children with Disabilities 84.325 H325H000087 89,662 89,662 Teacher Quality Enhancement Grants 84.336 00163, 00173 362,990 362,990 Total passed through Arizona State University 537,024 537,024 (Continued) See accompanying notes to schedule. 6 Maricopa County Community College District Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 (Continued) CFDA Pass- Total Number Pass-Through Direct Through Expenditures Federal Grantor/Pass-Through Grantor/Program Title (Note 2) Grantor's Number Expenditures Expenditures (Note 3) U.S. Department of Education (Concl'd) Passed through the El Camino Community College District Training Interpreters for Individuals who are Deaf and Individuals who are Deaf-Blind 84.160 H160A000009 $ 2,494 $ 2,494 Passed through the Polaris Joint Vocational School District Technology Innovation Challenge Grants 84.303 R303A980063 458,014 458,014 Passed through the State Board of Directors for Community Colleges Vocational Education—Basic Grants to States 84.048 30204, 30104 885,562 885,562 Total U.S. Department of Education 75,758,946 $ 917 75,759,863 U.S. Department of Health and Human Services Passed through the Maricopa County Human Services Department Head Start 93.600 C-22-01-018-2 4,773 4,773 Corporation for National and Community Service Direct grants Learn and Serve America—Higher Education 94.005 149,559 127,909 277,468 Passed through the American Association of Community Colleges Learn and Serve America—Higher Education 94.005 00LHEDC001 3,673 3,673 Total for Corporation for National and Community Service 153,232 127,909 281,141 Total Expenditures of Federal Awards $ 77,848,158 $ 913,405 $ 78,761,563 See accompanying notes to schedule. 7 Maricopa County Community College District Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2002 8 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Maricopa County Community College District and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Note 2 - Catalog of Federal Domestic Assistance (CFDA) Numbers The program titles and CFDA numbers were obtained from the federal or pass-through grantor or the 2000 or 2002 Catalog of Federal Domestic Assistance. When no CFDA number had been assigned and no contract number exists, the first two digits applicable to the federal agency were used followed by a period and the word “unknown”. Note 3 - Loans Outstanding The expenditures reported on the Schedule of Expenditures of Federal Awards for the Federal Perkins Loan Program—Federal Capital Contributions (CFDA No. 84.038) included loan balances outstanding at June 30, 2002, of $1,461,044. Maricopa County Community College District Schedule of Findings and Questioned Costs Year Ended June 30, 2002 9 Summary of Auditors’ Results Financial Statements Type of auditors’ report issued: Unqualified Yes No Material weakness identified in internal control over financial reporting? X Reportable conditions identified not considered to be a material weaknesses? X Noncompliance material to the financial statements noted? X Federal Awards Material weakness identified in internal control over major programs? X Reportable condition identified not considered to be a material weakness? X (None reported) Type of auditors’ report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133 (section .510[a])? X Identification of major programs: CFDA Number Name of Federal Program or Cluster 47.076 Education and Human Resources 84.002 Adult Basic Education Student Financial Assistance Cluster: 84.007 Federal Supplemental Educational Opportunity Grants 84.032 Federal Family Education Loans 84.033 Federal Work-Study Program 84.038 Federal Perkins Loan Program—Federal Capital Contributions 84.063 Federal Pell Grant Program 84.268 Federal Direct Loan Dollar threshold used to distinguish between Type A and Type B programs: $1,330,223 Auditee qualified as low-risk auditee? X Other Matters Auditee's summary schedule of prior audit findings required to be reported in accordance with Circular A-133 (section .315[b])? X Maricopa County Community College District Schedule of Findings and Questioned Costs Year Ended June 30, 2002 10 Financial Statement Findings 02-01 The District needs to continue its efforts to establish necessary internal control over external access to its information technology (IT) resources The District has not implemented adequate security over external access to its IT resources. Since the District is moving to a web-based environment, the District is more vulnerable to unauthorized external access. The District’s student information system is exposed to external access and manipulation. Similar findings included in our single audit report in the prior year have been partially addressed. However, the District has yet to implement measures to restrict external access to the District’s student information system at the campus level. Additionally, the District should proactively configure and monitor IT resources for security at the campus level. To follow prudent business practices, the District should continue its implementation of adequate security practices to protect IT resources and systems from unauthorized access and manipulation. 02-02 The District needs to establish and test written disaster recovery plans The District did not have a written disaster recovery plan for processing critical jobs on some of its significant systems in the event of a major hardware or software failure. If a major hardware or software failure were to occur, the District might be unable to process its transactions until the failure was corrected. To help ensure the continuity of operations and the preservation of records, the District should establish and document a disaster recovery plan for all of its critical IT systems. This plan should be updated and tested on a regular basis and stored off-site. Further, to follow prudent business practices, the District should implement a disaster recovery plan for each of its significant IT systems and test those plans on a regular basis. 11 March 18, 2003 Ms. Debbie Davenport Auditor General 2910 N. 44th Street, Suite 410 Phoenix, AZ 85018 Dear Ms. Davenport: The accompanying corrective action plan has been prepared as required by U.S. Office of Management and Budget Circular A-133. Specifically, we are providing you with the names of the contact persons responsible for the corrective action, the corrective action planned, and the anticipated completion date for each audit findings included in the fiscal year ended June 30, 2002 Schedule of Findings and Questioned Costs. Sincerely, Jeffrey J. West, MBA Director of Financial Services and Controller 12 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Corrective Action Plan Year Ended June 30, 2002 Financial Statement Findings 02-01 The District needs to continue its efforts to establish necessary internal control over external access to its information technology (IT) resources. Contact Persons: Jeffrey West Carol Myers Anticipated Completion Date: June 30, 2003 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Response: Concur. On March 11, 2003, ITS Security Services implemented Maricopa’s network perimeter firewall, Virtual Private Network (VPN), and a dynamic Intrusion Detection System. Firewalls and IDS’ have been in place on CFS and HR, and IDS has been in place at Maricopa’s point-of-presence to the Internet for a year. The network perimeter firewalls are blocking known malicious traffic, suspected malicious traffic, and more rules will be added that mirror the SANS Top 20 Known Vulnerabilities. The dynamic IDS system, as well as the firewall, will be dropping malicious packets before they enter Maricopa’s network. The VPN allows for secure, encrypted sessions for all Maricopa employees who access administrative applications and systems from a remote location. No other traffic will be allowed. ITS Security Services is working with several campuses on their firewall and IDS implementations, one of which is deployed. Certificate Authority protects the new student system. Maricopa is its own Certificate Authority, and the highest encryption possible is in place. ITS Security Services controls all account creation for Certificate Authority and VPN. The legacy SIS system is under analysis for the capability of allowing for encrypted sessions using SSH. There are two solutions and the solution with the least impact on the end users, but has strong encryption will be implemented. This finding differs substantially from the last year’s finding in that the Maricopa enterprise network infrastructure is now protected with firewalls and IDS. 13 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Corrective Action Plan Year Ended June 30, 2002 02-02 The District needs to establish and test written disaster recovery plans. Contact Persons: Jeffrey West Tom Russo Anticipated Completion Date: September 30, 2004 MARICOPA COUNTY COMMUNITY COLLEGE DISTRICT Response: Concur. The District has an IT Computer Center Disaster Recovery Plan that covers the worst-case scenario of our critical IT systems. Each critical IT system does not have its own separate plan at this time, except for the District’s College Financial System (see Summary Schedule of Prior Audit Findings, finding number 01-02), but is covered in this IT Computer Center Disaster Recovery Plan. The Plan has not been tested as of this date. The Vice Chancellors of ITS and Human Resources are in the process of addressing the Human Resource System Disaster Recovery Plan. Initial development of the plan is due to begin in late April 2003. It is projected that a working template of a disaster recovery plan should be completed within 6-9 months. There are no plans for disaster recovery contingencies for the legacy Student Information System, currently scheduled for replacement in late 2004. However, ITS management will be presenting infrastructure and budget plans to include a disaster recovery component as final design features of the New Student System are brought on line over the next 18 months. 14 March 18, 2003 Ms. Debbie Davenport Auditor General 2910 N. 44th Street, Suite 410 Phoenix, AZ 85018 Dear Ms. Davenport: The accompanying summary schedule of prior audit findings has been prepared as required by U.S. Office of Management and Budget Circular A-133. Specifically, we are reporting the status of audit findings included in the prior audit’s Schedule of Findings and Questioned Costs related to the District’s financial statements and federal awards. Sincerely, Jeffrey J. West, MBA Director of Financial Services and Controller Maricopa County Community College District Summary Schedule of Prior Audit Findings Year Ended June 30, 2002 15 Status of Financial Statement Findings The District has made great progress in certain areas of this finding. Additional security policies have been established (see http://www.maricopa.edu/security), implementation of a network perimeter firewall, internal firewall, Virtual Private Network (VPN), dynamic Intrusion Detection System (IDS), and email and network/desktop antivirus protection at all locations. In addition, standards have been set for system administrators, security administrators have been assigned at each college, and naming conventions have been changed to hide hardware to avoid manipulation. For additional information, please see the District’s corrective action plan for current year finding number 02-01. In June 2001, an initial disaster recovery plan was completed for the District’s College Financial System (CFS). This plan has been updated and expanded since it’s initial version. The plan includes identification of personnel assigned to disaster recovery teams with operating procedures and emergency phone numbers, arrangements for a designated physical facility, risk analysis identifying the critical applications and exposures, and arrangements with vendors to support the needed documents and forms. This plan is set to be tested in Spring 2003. Any necessary modifications resulting from testing will be incorporated into the disaster recovery plan. Please see the District’s corrective action plan for current year finding number 02-02 for additional information regarding disaster recovery plans applicable to the District’s other primary systems. Status of Federal Award Findings and Questioned Costs Finding No. 01-01 Status: Partially corrected Finding No. 01-02 Status: Partially corrected CFDA No.: 47.076 Education and Human Resources Finding No. 01-101 Status: Fully corrected |