U.S. ELECTION ASSISTANCE 

COMMISSION 

OFFICE OF INSPECTOR GENERAL

FINAL REPORT: 

Administration of Payments Received 

Under the Help America Vote Act by the 

Tennessee Secretary of State’s Division of 

Elections 

APRIL 23, 2003 THROUGH JUNE 30, 2009

Report No. 

E-HP-TN-02-09 

April 2010
U.S. ELECTION ASSISTANCE COMMISSION

OFFICE OF INSPECTOR GENERAL

1201 New York Ave. NW - Suite 300 

Washington, DC 20005

April , 2010 

Memorandum 

To: Thomas Wilkey 

 Executive Director 

From: Curtis W. Crider 

 Inspector General 

Subject: Final Audit Report - Administration of Payments Received Under the Help America 

Vote Act by the Tennessee Secretary of State’s Division of Elections 

(Assignment Number E-HP-TN-02-09) 

We contracted with the independent certified public accounting firm of Clifton 

Gunderson LLP (Clifton Gunderson) to audit the administration of payments received under the 

Help America Vote Act (HAVA) by the Tennessee Secretary of State’s Division of Elections 

(SOS-DOE). The contract required that the audit be done in accordance with U.S. generally 

accepted government auditing standards. Clifton Gunderson is responsible for the attached 

auditor’s report and the conclusions expressed therein. 

In its audit of the SOS-DOE, Clifton Gunderson concluded that, except for the lack of 

adequate competition for procurements in some of the counties visited and the state’s failure to 

document payroll charges, our audit concluded that the SOS-DOE generally accounted for and 

expended HAVA funds in accordance with the HAVA requirements and complied with the 

financial management requirements established by the U.S. Election Assistance Commission. 

The SOS-DOE also complied with section 251 requirements. 

In its October 27, 2009 responses to the findings and recommendations (Appendix A), 

the SOS-DOE agreed that appropriate procedures were not followed in both instances cited, but 

did not believe there was any adverse impact on the HAVA program.

Please provide us with your written response to the recommendation included in this 

report by June , 2010. Your response should contain information on actions taken or planned, 

including target dates and titles of EAC officials responsible for implementing the 

recommendation. 

The legislation, as amended, creating the Office of Inspector General (5 U.S.C. App.3) 

requires semiannual reporting to Congress on all audit reports issued, actions taken to implement 

audit recommendations, and recommendations that have not been implemented. Therefore, this 

report will be included in our next semiannual report to Congress. 

If you have any questions regarding this report, please call me at (202) 566-3125. 
PERFORMANCE AUDIT REPORT


ADMINISTRATION OF PAYMENTS RECEIVED


UNDER THE


HELP AMERICA VOTE ACT


BY THE


STATE OF TENNESSEE


April 23, 2003 Through June 30, 2009


UNITED STATES


ELECTION ASSISTANCE COMMISSION


a1
TABLE OF CONTENTS 

PAGE


EXECUTIVE SUMMARY 1


BACKGROUND 2


AUDIT OBJECTIVES 3


SCOPE AND METHODOLOGY 3


AUDIT RESULTS 4


APPENDICES


Appendix A: Director, Division of Elections, Secretary of State Response To

Audit Results 7


Appendix B: Audit Methodology 12


Appendix C: Monetary Impact as of June 30, 2009 .................................................. 14


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U.S. Election Assistance Commission


Performance Audit of the Administration of Payments Received Under the


Help America Vote Act by the State of Tennessee


EXECUTIVE SUMMARY 

Clifton Gunderson LLP was engaged by the U.S. Election Assistance Commission (EAC or the 

Commission) Office of Inspector General to conduct a performance audit of the Tennessee 

Secretary of State (SOS) for the period April 23, 2003 through June 30, 2009 to determine 

whether the SOS used payments authorized by Sections 101, 102, and 251 of the Help America 

Vote Act of 2002 (HAVA or the Act) in accordance with HAVA and applicable requirements; 

accurately and properly accounted for program income and property purchased with HAVA 

payments, and met HAVA requirements for Section 251 funds for an election fund and for a 

matching contribution. We did not include a determination of whether the SOS and its 

subgrantees met the requirements for maintenance of a base level of state outlays because the 

Commission is reviewing its guidance on the applicability of the maintenance of a base level of 

state outlays to the SOS’s subgrantees. 

In addition, the Commission requires states to comply with certain financial management 

requirements, specifically: 

• Comply with the Uniform Administrative Requirements For Grants And Cooperative 

Agreements With State And Local Governments (also known as the “Common Rule”) as 

published in the Code of Federal Regulations 41 CFR 105-71. 

• Expend payments in accordance with cost principles for establishing the allowance or 

disallowance of certain items of cost for federal participation issued by the Office of 

Management and Budget (OMB) in Circular A-87. 

• Submit detailed annual financial reports on the use of Title I and Title II payments. 

We conducted this performance audit in accordance with Generally Accepted Government 

Auditing Standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on the audit objectives. Because of inherent 

limitations, a study and evaluation made for the limited purposes of our review would not 

necessarily disclose all weaknesses in administering HAVA payments. 

Except for the lack of adequate competition for procurements in some of the counties visited 

and the state’s failure to document payroll charges, as discussed below, our audit concluded 

that SOS generally accounted for and expended HAVA funds in accordance with the 

requirements mentioned above for the period from April 23, 2003 through June 30, 2009. The 

exceptions needing SOS’s management attention are as follows: 

• Four of the seven counties we visited in Tennessee did not use formal solicitation 

procedures to purchase voting equipment during calendar year 2006 as required. The 

four counties negotiated contracts totaling $1,647,097 with vendors authorized by the 

state election office to sell voting equipment in Tennessee. 

1

• The state did not complete semi-annual certifications for employees who worked fulltime or solely on HAVA activities. The state paid a total of $1,492,446 in salaries to fulltime employees between April 23, 2003 through June 30, 2009. 

The SOS officials agreed that the subject counties did not obtain competitive bids in their 

purchase of voting equipment, but believe that the prices paid by these counties were equal to 

prices paid by counties which engaged in competition. They also agreed that semi-annual 

certifications for full-time employees paid by HAVA funds had not been completed, but said that 

these individuals had worked only on HAVA related activities and believe the salary charges 

should not be disallowed. 

We have included in this report as Appendix A the SOS management’s formal response on 

October 27, 2009 to the findings and recommendations. Although we have included 

management’s written responses to our findings and recommendations, such responses have 

not been subjected to the audit procedures and, accordingly, we do not provide any form of 

assurance on the appropriateness of the responses or the effectiveness of the corrective actions 

described therein. 

BACKGROUND 

HAVA created the Commission to assist states and insular areas with the improvement of the 

administration of Federal elections and to provide funds to states to help implement these 

improvements. HAVA authorizes payments to states under Titles I and II, as follows: 

• Title I, Section 101 payments are for activities such as complying with Title III of HAVA for 

uniform and nondiscriminatory election technology and administration requirements, 

improving the administration of elections for Federal office, educating voters, training 

election officials and poll workers, and developing a state plan for requirements 

payments. 

• Title I, Section 102 payments are available only for the replacement of punch card and 

lever action voting systems. 

• Title II, Section 251 requirements payments are for complying with Title III requirements 

for voting system equipment; and for addressing provisional voting, voting information, 

statewide voter registration lists, and voters who register by mail. 

Title II also requires that states must: 

• Have appropriated funds “equal to 5 percent of the total amount to be spent for such 

activities [activities for which requirements payments are made].” [Section 253(b)(5)]. 

• “Maintain the expenditures of the state for activities funded by the [requirements] payment 

at a level that is not less than the level of such expenditures maintained by the state for 

the fiscal year ending prior to November 2000.” [Section 254 (a)(7)]. 

• Establish an election fund for amounts appropriated by the state “for carrying out the 

activities for which the requirements payment is made,” for the Federal requirements 

payments received, for “such other amounts as may be appropriated under law,” and for 

“interest earned on deposits of the fund.” [Section 254 )(b)(1)]. 

2

AUDIT OBJECTIVES 

The objectives of our audit were to determine whether the Tennessee SOS: 

1.	 Used payments authorized by Sections 101, 102, and 251 of HAVA in accordance with 

HAVA and applicable requirements; 

2.	 Accurately and properly accounted for property purchased with HAVA payments and for 

program income; 

3.	 Met HAVA requirements for Section 251 funds for an election fund and for a matching 

contribution. We did not determine whether the SOS met the requirement for 

maintenance of a base level of state outlays, because the Commission is reviewing its 

guidance on the applicability of the maintenance of a base level of state outlays to 

subgrantees of the SOS. 

In addition, to accounting for HAVA payments, the Act requires states to maintain records that 

are consistent with sound accounting principles that fully disclose the amount and disposition of 

the payments, that identify the project costs financed with the payments and other sources, and 

that will facilitate an effective audit. The Commission requires states receiving HAVA funds to 

comply with certain financial management requirements, specifically: 

1.	 Comply with the Uniform Administrative Requirements for Grants and Cooperative 

Agreements with State and Local Governments (also known as the “Common Rule”) as 

published in the Code of Federal Regulations at 41 CFR 105-71. 

2.	 Expend payments in accordance with cost principles for establishing the allowance or 

disallowance of certain items of cost for federal participation issued by the OMB. 

3.	 Submit detailed annual financial reports on the use of Title I and Title II payments. 1 

SCOPE AND METHODOLOGY 

We audited the HAVA funds received and disbursed by the SOS from April 23, 2003 through 

June 30, 2009 (73-month period) as shown in the following table: 

FUNDS RECEIVED 

TYPE OF 

PAYMENT 

EAC 

PAYMENT 

PROGRAM 

INCOME 

STATE 

MATCH 

INTEREST 

EARNED 

TOTAL 

AVAILABLE 

FUNDS 

DISBURSED 

DATA


AS OF


Section 101 $ 6,004,507 $ 0 $ 0 $ 963,821 $ 6,968,328 $ 1,807,403 6/30/2009 

Section 102 2,473,971 0 0 134,659 2,608,630 2,608,630 6/30/2009 

Section 251 46,236,130 0 2,500,000 6,366,305 55,102,435 23,185,068 6/30/2009 

Total $54,714,608 $ 0 $2,500,000 $7,464,785 $64,679,393 $27,601,101 6/30/2009 

1 EAC requires states to submit annual reports on the expenditure of HAVA Sections 101, 102, and 251 funds. For 

Sections 101 and 102, reports are due on February 28 for the activities of the previous calendar year. For Section 

251, reports are due by March 30 for the activities of the previous fiscal year ending on September 30. 

3

Our audit methodology is set forth in Appendix B. 

AUDIT RESULTS 

We conducted this performance audit in accordance with Generally Accepted Government 

Auditing Standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on the audit objectives. Because of inherent 

limitations, a study and evaluation made for the limited purposes of our review would not 

necessarily disclose all weaknesses in administering HAVA payments. 

Except for the failure of selected counties in following appropriate procurement procedures; the 

state’s lack of personnel certifications; and the determination of whether the SOS and its 

subgrantees met the requirement for maintenance of a base level of state outlays which were 

specifically omitted from our scope of work as explained above, our audit concluded that the 

SOS generally accounted for and expended HAVA funds in accordance with the requirements 

mentioned above. The SOS has taken action on or is working to resolve the exceptions 

described below as set forth in Appendix A: 

I. Procurement 

There were four of the seven counties we visited in Tennessee that did not use formal 

solicitation procedures to purchase voting equipment during calendar year 2006. The four 

counties negotiated contracts totaling $1,647,097 with vendors authorized by the state election 

office to sell voting equipment in Tennessee. 

The Administrators of Elections at three of the counties told us that they believed their Election 

Commission was exempt from procurement regulations which require competitive bidding 

procedures. The Purchasing Officer for one of the three counties provided us a letter prepared 

by the County Attorney in which the attorney concluded that, “Neither the Election Statutes or 

the rules and regulations of the Coordinator require that purchases of electronic voting 

machines be competitively bid.” The administrators at the other two counties told us they were 

verbally advised by their purchasing offices that the Election Commission was exempt from 

county purchasing requirements. 

The fourth county election administrator said that she thought the state had awarded a statewide contract which established prices for the voting equipment that the county simply had to 

choose the equipment which it believed was best suited for its local purposes, and then order 

from the state contract. 

Tennessee Division of Elections officials told us that the state certified the voting equipment 

vendors, but did not award any state-wide contracts. These officials said that they had 

negotiated voting equipment prices with each of the four vendors and that they reviewed all 

contracts between the counties and the vendors to assure that the counties were not charged 

more than the prices negotiated. They also said that under Tennessee state law, the General 

Assembly, which includes the SOS, is exempt from state procurement regulations. The state 

law does say, however, that to the extent practicable, the General Assembly should follow the 

procedures established by the state’s Department of General Services. The grants awarded to 

the counties permitted each county to select, from authorized vendors, the voting equipment 

which best suited the counties’ needs. The grant agreement also required that procurements 

4

subject to the grant shall be made on a competitive basis, including the use of competitive 

bidding procedures. 

The Uniform Administrative Requirements for Grants and Cooperative Agreements with State 

and Local Governments (Common Rule) located at 41 CFR 105-71.136(a), and Office of 

Management and Budget Circular A-87, Cost Principles for State, Local, and Indian Tribal 

Governments, Attachments A and B, provide guidance to grantees when utilizing federal funds 

to ensure that costs incurred are both reasonable and allowable. 

The Tennessee Department of General Services Purchasing Rules in effect at the time these 

purchases were made at Chapter 0690-3-1 “Purchase of Materials, Supplies, Equipment and 

Services,” Section .01 (5), Exempt State Agencies includes purchasing requirements for certain 

agencies named in the ruling. 

Further, Chapter 0690-3-1, Section .01 under Methods of Purchasing discusses procedures for 

competitive bidding. 

The terms of the grant agreement between the State of Tennessee, Department of State, 

Division of Elections and the various county Election Commissions describe the requirements 

for competitive bidding when using federal funds. 

Three of the administrators believed that they were exempt from these requirements. Moreover, 

the SOS did not verify that all counties followed applicable procedures in their procurement of 

voting equipment before reimbursing the counties for the cost of the equipment. 

As a result, the SOS reimbursed four counties for a total of $1,647,097 for expenditures the 

counties incurred related to their purchase of voting machine equipment, thus the counties may 

not have obtained the best pricing for the voting equipment. 

Recommendation: 

We recommend that the SOS resolve the questioned costs with the Commission. 

SOS’s Response: 

The state did not disagree with the finding that four counties did not purchase voting equipment 

using competitive bidding procedures. The state believes, however, that the process used to 

purchase voting equipment resulted in prices that were the same whether or not competitive 

selection procedures were used. 

Prior to the award of subgrants to counties for the purchase of voting equipment, the SOS’s 

office negotiated a maximum price with each of the four vendors authorized to sell voting 

equipment within the state. Documents provided by the SOS show that the prices paid by 

counties where competition took place were the same as those paid by the counties which did 

not engage in competitive bidding. In one instance a county paid less for voting equipment using 

the state’s negotiated price than they had previously paid using their own funds pre-HAVA. 

The SOS believes there is ample evidence that the counties could not have obtained a more 

favorable pricing structure for the purchase of voting equipment had competitive bids been 

obtained and could have resulted in higher prices for smaller counties. 

5

II. Personnel Certifications 

The State of Tennessee’s Office of the SOS did not complete semi-annual certifications for 

employees who worked full-time or solely on HAVA activities. 

OMB Circular A-87, in Attachment B Section 8(h) (3) requires that: 

(3) Where employees are expected to work solely on a single Federal award or cost 

objective, charges for their salaries and wages will be supported by periodic certifications 

that the employees worked solely on that program for the period covered by the certification. 

These certifications will be prepared at least semi-annually and will be signed by the 

employee or supervisory official having first hand knowledge of the work performed by the 

employee. 

Staff of the SOS told us they were not aware of this requirement. 

As a result, the Commission has no assurance that salaries and fringe benefit costs of 

$1,492,446 paid to SOS staff using HAVA program funds were incurred for work done solely on 

HAVA activities during the audit period. 

Recommendation: 

We recommend that the Commission resolve with the Tennessee SOS the appropriate 

corrective action regarding the lack of periodic certifications. 

SOS’s Response: 

The State acknowledged that it had not completed the required certifications for employees who 

were paid with HAVA funds. The SOS’s office said they were unaware of the requirements of 

OMB Circular A-87. They said that at all times since the inception of the program the employees 

worked solely on HAVA activities while they have been paid with HAVA funds. They also said 

that they have developed a semi-annual certification form and that affected employees have 

completed the form for the first half of this year and those certifications will be prepared and 

retained by the SOS’s office in the future. 

**************************************** 

We provided a draft of our report to the appropriate individuals of the Tennessee SOS and the 

Commission. We considered any comments received prior to finalizing this report. 

CG performed its work between August 4, 2009 and August 21, 2009. 

a1

Calverton, Maryland


November 5, 2009


6

Appendix A 

Director, Division of Elections, Secretary of State Response To 

Audit Results2 

Response to NFR #1 

In implementing the Help America Vote Act (“HAVA”) in Tennessee, the State granted 

money to the counties to purchase voting equipment. Allowing the counties to pick the type of 

voting equipment to purchase, as long as it was certified by the State, was in keeping with past 

practice. In reviewing the actions of the counties in Tennessee with respect to the purchase of 

voting equipment, it is important to take into account the end results of the process. 

Our past experience in Tennessee made us believe that the smaller counties would 

have the most trouble getting a fair offer in purchasing voting equipment, assuming they could 

get some offers, which led us to negotiate a maximum price per machine with each vendor. As 

detailed below, the counties in Tennessee that did not technically purchase the equipment 

through competitive bid paid the exact same price for the equipment as those counties who did 

use the competitive bid process. Additionally, in some instances the county had little choice but 

to “sole source” the purchase and were not adversely affected by that action. 

It must also be noted that the State Comptroller’s office gave advice to a county, widely 

circulated throughout the State, which indicated the counties were not required to use the 

competitive bid process in this particular situation. This advice was relied on by several 

counties. 

Blount, Madison and Rhea Counties 

Each of these three counties ultimately purchased E-Slate voting equipment 

manufactured by Hart InterCivic. While these counties differ significantly in population and 

geography, each of the three counties paid exactly the same amount for voting equipment: 

$2,500 per voting machine and $3,000 per voting machine for voters with disabilities. Indeed, 

this is the same amount per machine that every county in the State that purchased E-Slates 

ultimately paid. More importantly, however, is that this is also the exact amount bid by Harp in 

counties where a bid was requested. 3 

This consistency in pricing is more than a mere coincidence. It is the result of our having 

negotiated a maximum price with each manufacturer prior to the grants being awarded. As 

noted above, we did this to protect the small counties who had little or no bargaining power with 

the manufacturers. Thus, among the counties that purchased E-Slate machines, the amount 

paid in no-bid counties is always equal to the amount paid in the counties that accepted bids. 

Additionally, there is no evidence of any bid by Hart in any county in the State where the amount 

bid did not equal $2,500 per machine and $3,000 per machine for disability voting. Therefore, 

the failure of these three counties to submit to a formal bid process in no way affected the 

amount of money paid to purchase the voting equipment. 

2 The responses to our NFR (Notice of Findings and Recommendations) were received in writing.


3 This is true in both counties where E-Slate was ultimately selected and those where another machine was


purchased.


7

Rutherford County 

Although this County opted for the MicroVote Infinity machine, the same logic applies 

here as well. Rutherford County paid $3,150 per machine using the HAVA money granted by 

the State. Montgomery County, whose population is close to that of Rutherford County, received 

bids before purchasing machines. The bid from MicroVote, ultimately accepted by Montgomery 

County, was for the exact amount per machine that Rutherford County paid: $3,150 per 

machine. Indeed, bids to other counties from MicroVote all had the same per unit price which 

was negotiated as a maximum by the State before the counties began purchasing machines. 

More importantly in this case, however, is that Rutherford County already had some 

MicroVote Infinity machines. The County had purchased several Infinity machines prior to the 

2004 election cycle and, when faced with having to acquire more machines, obviously chose to 

build upon what had already been purchased. Thus, the only real option for Rutherford County 

was to purchase more Infinity machines. However, the amount paid per machine with HAVA 

funds was less than the amount the County had negotiated with MicroVote for the earlier 

purchase. The manufacturer almost certainly would not have charged the County less per 

machine, especially in a sole source circumstance, had not the State negotiated a better price 

as a statewide maximum. As further evidence of this, the printer kits for the Infinity machines 

cost Rutherford County $750 apiece when purchased before the implementation of HAVA. The 

bid from MicroVote in counties where a bid occurred and the amount paid by Rutherford County 

with HAVA funds for the printers was $700. 

It is apparent that the lack of a bid in Rutherford County did not result in any lost dollars. 

Indeed, with the State intervening to set a maximum price, the County was able to purchase 

equipment at a price lower than it had previously. 

Conclusion 

There is some question as to whether purchases made by the Secretary of State’s office 

are exempt from the competitive bid process. Two divisions of the Comptroller’s Office, State 

Audit and County Audit, independently advised counties that State law did not require 

competitive bids in this instance. And at least one of the counties cited in the audit had already 

purchased machines and needed to purchase identical machines with the HAVA funds. 

Irrespective of any technical requirement for a competitive bid process, however, is the 

ample evidence that the counties could not have obtained a more favorable pricing structure for 

the purchase of voting equipment had bids been required. Competitive bids without a maximum 

price established by the State almost certainly would have resulted in higher prices for smaller 

counties. Indeed, this is exactly what occurred in Rutherford County in the purchase of voting 

machines with County money prior to the State negotiating a maximum price. Secondly, the bids 

made by the manufacturers in counties where a bid was sought are identical to the prices paid 

in the no-bid counties cited in the audit. Finally, while it can be argued that a competitive bid 

process should always be used, in the present case it is beyond question that a bid in these 

counties would have resulted in the exact same result with the exact same price. There is 

simply no evidence that a bid would have reduced the cost of the machines. 

It must be noted that there were four vendors certified by the State to sell voting 

equipment to the counties. The fact that all four vendors did sell equipment is a testament to the 

efficiency of the process. There was competition among the vendors and the prices negotiated 

8

by the State were fair and reasonable. The finding notes that some county election officials gave 

different reasons as to why a bid was not used. The State was diligent, however, in educating 

the counties about the existence and amount of a maximum price per machine. We held training 

seminars where the topic was covered on several occasions. The discrepancy in answers from 

the counties may be based on several factors: 1) A significant amount of time has passed since 

the purchasing process; 2) There was considerable turnover among county election officials 

between the purchase of the equipment and the audit; and 3) The county election officials were 

being told different things by different people (county officials were suggesting a bid process, 

while the Comptroller’s Office was insisting no bid was needed). 

In conclusion, it is the State’s position that the pre-negotiated maximums established by 

the State obviated the need for a competitive bid process in each county. This is proven by the 

uniformity of the bids that were obtained and the prices that were paid by the counties. It is 

beyond question that bids in the four counties cited in the audit would not have resulted in any 

reduction in price for the purchase of voting equipment. 

9

List of Exhibits4 

1.	 Memorandums from State Comptroller’s Office 

- Art Alexander – Division of County Audit


- Bryan Burkin – Division of State Audit


2.	 Invoice and Purchase Order from Rutherford County, Tennessee, detailing previous nonHAVA purchase of voting equipment. Note that price is higher than amount actually paid by 

State and Rutherford County in subsequent purchase with HAVA funds. 

3.	 Bids received by Montgomery County, Tennessee, showing an amount identical to that paid 

by non-bid counties. 

4.	 Bids received by Williamson County, Tennessee, showing an amount identical to that paid 

by non-bid counties. 

5.	 Copies of grant agreements detailing amounts granted to counties that purchased Hart ESlate machines. 

6.	 Copies of grant agreements detailing amounts granted to counties that purchased 

MicroVote Infinity machines. 

4 Clifton Gunderson LLP did not include the exhibits in this report. 

10

Response to NFR #3 

The employees paid with the Help America Vote Act grant were hired to and have worked solely 

on projects relating to the Help America Vote Act grant during the period reflected in the finding, 

although the necessary paperwork was not completed. 

Our office was unaware of the semi annual certification requirement set forth in the OMB A-8? 

Circular until this year. Brook Thompson, the previous Coordinator of Elections, attended 

several meetings and sat on several committees regarding HAVA and was not aware of this 

requirement. 

After learning of the certification requirement our office developed a semi-annual certification 

form and those employees have completed the certification requirement for the first half of this 

year (Auditors _ and _ reviewed these certifications). It should be noted, 

however, that at all times since the HAVA funds were distributed, the employees paid with 

HAVA funds have worked solely on HAVA issues. Although the State failed to file the necessary 

paperwork, Tennessee did comply with all relevant laws regarding the expenditure of HAVA 

funds at all pertinent times. 

Certifications will be submitted and retained by our office in the future. 

11 

Text redacted pursuant to Freedom of 

Information Act Exemption 6 
Appendix B 

AUDIT METHODOLOGY 

Our audit methodology included: 

• Assessing audit risk and significance within the context of the audit objectives. 

• Obtaining an understanding of internal control that is significant to the administration of the 

HAVA funds. 

• Understanding relevant information systems controls as applicable. 

• Identifying sources of evidence and the amount and type of evidence required. 

• Determining whether other auditors have conducted, or are conducting, audits of the 

program that could be relevant to the audit objectives. 

To implement our audit methodology, below are some of the audit procedures we performed: 

• Interviewed appropriate SOS employees about the organization and operations of the HAVA 

program. 

• Reviewed prior single audit report and other reviews related to the state’s financial 

management systems and the HAVA program for the last 2 years. 

• Reviewed policies, procedures and regulations for the SOS’s management and accounting 

systems as they relate to the administration of HAVA programs. 

• Analyzed the inventory lists of equipment purchased with HAVA funds. 

• Tested major purchases and supporting documentation. 

• Tested randomly sampled payments made with the HAVA funds. 

• Verified support for reimbursements to local governments (counties, cities, and 

municipalities). 

• Reviewed certain state laws that impacted the election fund. 

• Examined appropriations and expenditure reports for state funds used to maintain the level 

of expenses for elections at least equal to the amount expended in fiscal year 2000 and to 

meet the five percent matching requirement for section 251 requirements payments. 

• Evaluated compliance with the requirements for accumulating financial information reported 

to the Commission on the Financial Status Reports, Form SF-269, accounting for property, 

purchasing HAVA related goods and services, and accounting for salaries. 

• Verified the establishment and maintenance of an election fund. 

12

• Conducted site visits of selected counties to perform the following: 

� Observe equipment purchased with HAVA funds for proper accounting and 

safeguarding 

� Test disbursement of HAVA funds for allowability and compliance 

� Test cash receipts from SOS to ensure proper cash management 

� Test procurement of voting equipment for competitive bid process 

� Ensure compliance with HAVA Act. 

13

Appendix C 

MONETARY IMPACT AS OF JUNE 30, 2009


Description 

Questioned 

Costs 

Additional Funds for 

Program 

Contracts awarded without formal 

competition $1,647,097 $0 

Semi-annual certifications of full-time 

employment on HAVA activities not filed $1,492,446 $0 

Totals $3,139,543 $0 

14

OIG’s Mission 

The OIG audit mission is to provide timely, high-quality 

professional products and services that are useful to OIG’s clients. 

OIG seeks to provide value through its work, which is designed to 

enhance the economy, efficiency, and effectiveness in EAC 

operations so they work better and cost less in the context of 

today's declining resources. OIG also seeks to detect and prevent 

fraud, waste, abuse, and mismanagement in these programs and 

operations. Products and services include traditional financial and 

performance audits, contract and grant audits, information systems 

audits, and evaluations. 

Obtaining 

Copies of 

OIG Reports 

Copies of OIG reports can be requested by e-mail. 

(eacoig@eac.gov). 

Mail orders should be sent to: 

U.S. Election Assistance Commission 

Office of Inspector General 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

To order by phone: Voice: (202) 566-3100 

 Fax: (202) 566-0957 

To Report Fraud, 

Waste and Abuse 

Involving the U.S. 

Election Assistance

Commission or Help 

America Vote Act 

Funds

By Mail: U.S. Election Assistance Commission 

 Office of Inspector General 

 1201 New York Ave. NW - Suite 300 

 Washington, DC 20005 

E-mail: eacoig@eac.gov

OIG Hotline: 866-552-0004 (toll free) 

FAX: 202-566-0957