U.S. ELECTION ASSISTANCE
 

COMMISSION 

OFFICE OF INSPECTOR GENERAL 

FINAL REPORT: 

ADMINISTRATION OF PAYMENTS
 

RECEIVED UNDER THE HELP AMERICA 

VOTE ACT BY THE MAINE 

SECRETARY OF STATE
 

MAY 7, 2003 THROUGH SEPTEMBER 30, 2013 

Report No. 

E-HP-ME-05-14 

February 2015 
U.S. ELECTION ASSISTANCE COMMISSION

OFFICE OF INSPECTOR GENERAL

1335 East West Highway - Suite 4300

Silver Spring, MD 20910 

Memorandum 

February 2, 2015 

To: Alice Miller

Acting Executive Director

From: Curtis W. Crider 

Inspector General

Subject: Final Performance Audit Report – Administration of Payments Received 

Under the Help America Vote Act by the Maine Secretary of State 

(Assignment Number E-HP-ME-05-14)

We contracted with the independent certified public accounting firm of McBride, Lock & 

Associates to audit the administration of payments received under the Help America Vote Act 

(HAVA) by the Maine Secretary of State (Office).

 

In its audit, McBride, Lock & Associates concluded that the Office generally accounted for and 

expended the HAVA funds in accordance with applicable requirements for the period from May 

7, 2003 through September 30, 2013. However the following exceptions were identified: 

1. The Office did not have established policies and procedures addressing financial 

management activities including purchasing, payment, payroll, Federal financial 

reporting and Federal grant oversight and administration. 

2. The Office did not adequately support all salaries and wages charged to the grant award. 

3. The Office expended $103,964 of HAVA funds for purposes that are not allowable under 

the award's terms and conditions or HAVA regulations. The Office purchased paper

ballots in 2006. 

4. The Office's equipment management was inadequate in regards to the maintenance of

property records and the performance of a physical observation of inventory. 

In the report, McBride, Lock & Associates summarized the Office’s response to the 

recommendations, as well as their comments on the responses after the recommendations. The 

Office did not agree with Finding No. 3 that HAVA funds were spent for unallowable purposes. 

The Office felt that the HAVA funds spent in 2006, for paper ballots, should be considered an 

allowable cost. The EAC indicated that it would work with the Office to resolve the issues in the 

report. The Office’s complete response is included as Appendix A-1 and the EAC’s complete 

response is included as Appendix A-2. 
We would appreciate being kept informed of the actions taken on our recommendations as we 

will track the status of their implementation. Please respond in writing to the findings and 

recommendation included in this report by April 2, 2015. Your response should include 

information on actions taken or planned, targeted completion dates, and titles of officials 

responsible for implementation.

To fulfill our responsibilities under Government Auditing Standards, the Office of 

Inspector General:

 Reviewed McBride, Lock & Associates' approach and planning of the audit;

 Evaluated the qualifications and independence of the auditors;

 Monitored the progress of the audit at key points;

 Reviewed the audit report, prepared by McBride, Lock & Associates to ensure 

compliance with Government Auditing Standards; and

 Coordinated issuance of the audit report.

McBride, Lock & Associates is responsible for the attached auditor’s report and the 

conclusions expressed in the report. We do not express any opinion on the conclusions 

presented in McBride, Lock & Associates' audit report.

The legislation creating the Office of Inspector General requires that we report to

Congress semiannually on all audit reports issued, actions taken to implement our

recommendations, and recommendations that have not been implemented. 

If you have any questions regarding this report, please call me at (301) 734-3104.

Attachment

cc: Director of Grants and Payments
Performance Audit Report 

Administration of Payments Received Under the Help America Vote Act by 

the Maine Secretary of State 

Prepared for 

The United States Election Assistance Commission (EAC) 

Office of Inspector General 

By 

McBride, Lock & Associates, LLC 

October 2014 

McBRIDE, LOCK & ASSOCIATES, LLC 

CERTIFIED PUBLIC ACCOUNTANTS 

KANSAS CITY 
 

 

Performance Audit Report
 
 

Administration of Payments Received Under the Help America Vote Act by 

the Maine Secretary of State 

TABLE OF CONTENTS 

Page 

EXECUTIVE SUMMARY 1 

BACKGROUND 2 

AUDIT OBJECTIVES 4 

SCOPE AND METHODOLOGY 5 

AUDIT RESULTS 5 

APPENDICES: 

Appendix A-1: Response of the Maine Secretary of State to the Draft Report 

Appendix A-2: Response of the U.S. Election Assistance Commission 

to the Draft Report 

Appendix B: Audit Methodology 

Appendix C: Monetary Impact as of September 30, 2013 
 

 

 

 

 

 

 


 


 


 

	 

	 

	 

	 

	 


 

U.S. Election Assistance Commission
 

Performance Audit Report
 

Administration of Payments Received Under the Help America Vote Act by 

the Maine Secretary of State
 

EXECUTIVE SUMMARY 

McBride, Lock & Associates, LLC was engaged by the United States Election Assistance 

Commission (EAC) Office of the Inspector General to conduct a performance audit of the Maine 

Secretary of State’s Office (Office) from inception in May 7, 2003 through September 30, 2013 

to determine whether the Office used payments authorized by Sections 101, 102, and 251 of the 

Help America Vote Act of 2002 (the HAVA) in accordance with HAVA and applicable 

requirements; accurately and properly accounted for property purchased with HAVA payments 

and for program income; maintained state expenditures at a level not less than the level 

maintained in the fiscal year ending prior to November 2000; and met HAVA requirements for 

Section 251 funds for an election fund and for a matching contribution. 

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 Government, 41 CFR 105-71, (originally Office of 

Management and Budget Circular A-102, also known as the “Common Rule”). 

•	 Expend payments in accordance with cost principles set forth in Cost Principles for State 

and Local Governments, 2 CFR 225, (originally Office of Management and Budget 

Circular A-87) for establishing the allowability or unallowability of certain items of cost 

for federal participation. 

•	 Follow the requirements of the Federal Cash Management and Improvement Act. 

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

•	 Comply with the provisions of Audits of States, Local Governments and Non-Profit 

Organizations (Office of Management and Budget Circular A-133). 

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. 

Based on the audit procedures performed, except for the matters discussed below, we concluded 

that the Office generally accounted for and expended the Grant funds in accordance with the 

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requirements mentioned above for the period from May 7, 2003 through September 30, 2013. 

The exceptions are as follows: 

1.	 The Office does not have established policies and procedures addressing financial 

management activities including purchasing, payment, payroll, Federal financial 

reporting and Federal grant oversight and administration. 

2.	 The Office did not adequately support all salaries and wages charged to the grant award. 

3.	 The Office expended $103,964 of HAVA funds for purposes that are not allowable under 

the award's terms and conditions or HAVA regulations. 

4.	 The Office's equipment management is inadequate in regards to the maintenance of 

property records and the performance of a physical observation of inventory. 

We have included in this report as Appendix A, the Secretary of State’s written response to the 

draft report. Such response has not been subjected to the audit procedures and, accordingly, we 

do not provide any form of assurance on the appropriateness of the response or the effectiveness 

of the corrective actions described therein. 

BACKGROUND 

The Help America Vote Act of 2002 (HAVA) created the U.S. Election Assistance Commission 

(Commission) to assist States and insular areas (hereinafter referred to as States) with improving 

the administration of federal elections and to provide funds to States to help implement these 

improvements. The Commission administers payments to States authorized by HAVA under 

Titles I and II, as follows: 

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

requirements for uniform and nondiscriminatory election technology and administration 

requirements (Title III), improving the administration of elections for federal office, 

educating voters, training election officials and pool workers, and developing a State plan 

for requirements payments. 

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

lever action voting systems. 

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

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

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

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Title II also requires that states must: 

•	 Have appropriated funds equal to five percent of the total amount to be spent for 

activities for which requirements payments are made. 

•	 Maintain the expenditures of the State for activities funded by the requirements payment 

at a level that is not less than the expenditures maintained by the State for the fiscal year 

ending prior to November 2000. 

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

activities for which requirements payments are made, for the Federal requirements 

payments received, for other amounts as may be appropriated under law and for interest 

earned on deposits of the fund. 

The Awardee – The Maine Secretary of State 

The HAVA funds were awarded to the Maine Secretary of State. The Secretary of State is the 

chief state election official, and has central authority to oversee the application of the State's 

election laws and procedures; approve voting machines for use by municipalities; train and 

advise municipal election officials in the proper conduct of statewide elections; design, prepare 

and distribute ballots and other election forms in a consistent format for all municipalities; 

collect and compile statewide reports of election results and voter registration figures; and 

conduct recounts centrally following uniform procedures. The staff of the Division of Elections 

carries out these election activities on behalf of the Secretary of State. 

Help America Vote Act State of Maine State Plan 

The State of Maine's development committee consisted of 14 individuals representing a crosssection of election stakeholders. The committee was selected by the Secretary of State. 

The main objectives of the project funded by HAVA, as set forth in the state plan, were to 

purchase, implement, administrate and maintain compliant voting systems; and purchase, 

implement, administrate and maintain a computerized statewide voter registration list. 

The Secretary of State established and is maintaining an election fund for the exclusive purpose 

of carrying out activities of HAVA. The fund consists of a federal account (for the receipt and 

expenditure of federal funds) and a state dedicated account (for the receipt of and expenditure of 

state match funds). Each account in the fund is non-lapsing and accrues interest earned. 

Additionally, the Office has managed all expenditures funded by HAVA and has not distributed 

any of the requirements payments to the local units of government. 

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AUDIT OBJECTIVES 

The objectives of our audit were to determine whether the Office: 

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

Grant and applicable requirements; 

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

program income; 

3.	 Met HAVA requirements for Section 251 funds for creation of an election fund, 

providing required matching contributions, and meeting the requirements for 

maintenance of a base level of state outlays, commonly referred to as Maintenance of 

Expenditures (MOE). 

In addition to accounting for Grant payments, the Grant 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 Grant funds to 

comply with certain financial management requirements, specifically: 

•	 Comply with the Uniform Administrative Requirements for Grants and Cooperative 

Agreements with State and Local Government, 41 CFR 105-71, (originally Office of 

Management and Budget Circular A-102, also known as the “Common Rule”). 

•	 Expend payments in accordance with cost principles set forth in Cost Principles for State 

and Local Governments, 2 CFR 225, (originally Office of Management and Budget 

Circular A-87) for establishing the allowability or unallowability of certain items of cost 

for federal participation. 

•	 Follow the requirements of the Federal Cash Management and Improvement Act. 

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

•	 Comply with the provisions of Audits of States, Local Governments and Non-Profit 

Organizations (Office of Management and Budget Circular A-133). 

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SCOPE AND METHODOLOGY 

We audited the Grant funds received and disbursed by the Office from May 7, 2003 through 

September 30, 2013 as shown in the following table: 

HAVA HAVA HAVA 

Description Section 101 Section 102 Section 251 Total 

Funds Received from EAC $ 5,000,000 -$ $ 13,021,803 $ 18,021,803

State Matching Funds - - 802,483 802,483 

Program Income 600,698 - 1,517,024 2,117,722 

Total Funds $ 5,600,698 $ - $ 15,341,310 $ 20,942,008
 

Less Disbursements (4,043,652) - (13,874,237) (17,917,889) 

Fund Balance $ 1,557,046 $ - $ 1,467,073 $ 3,024,119
 

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. 

Based on the audit procedures performed, except for the matters discussed below, we concluded 

that the Office accounted for and expended the HAVA funds in accordance with the 

requirements mentioned above for the period from May 7, 2003 through September 30, 2013. 

The exceptions to applicable compliance requirements are described below. 

Finding No. 1 – Documentation of Policies and Procedures 

Key internal control policies affecting financial management activities including purchasing, 

payment, payroll, Federal financial reporting and Federal grant oversight and administration, 

have not been addressed in policy and procedure documentation. The Office relies heavily on 

written documentation set forth in State manuals, and electronic controls implemented in the 

accounting system. Due to the few personnel involved in award administration, accounting and 

financial reporting, policies and procedures have developed informally over the years. 

Federal regulations, specifically 41 CFR § 105-71.120 – Standards for Financial Management 

Systems require that: 

(a) A State must expand and account for grant funds in accordance with State laws and 

procedures for expending and accounting for its own funds, and 

(b) Effective control and accountability must be maintained for all grant and subgrant cash, 

real and personal property, and other assets. 

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The State Administrative & Accounting Manual (SAAM), issued by the Maine Office of the 

State Controller, 20.20.20a states, "Each agency is responsible for establishing and maintaining 

an effective system of internal control through the organization as required by Title 5, Chapter 

143, Section 1541, Subsection 10-A." 

Maine Revised Statutes, Title 5, Chapter 143, Section 1541, Subsection 10-A, states, "Internal 

control systems of state agencies and departments are to be clearly documented and readily 

available for examination. Documentation of a state agency's or department's internal control 

systems must include internal control procedures, internal control accountability systems and 

identification of the operating cycles. Documentation of the state agency's or department's 

internal control systems must appear in management directives, administrative policy, 

procedures and manuals." 

A key aspect of maintaining an effective system of internal controls is the documentation of 

related policies and procedures to ensure these criteria are current, approved, communicated, 

incorporated into training materials, and updated when appropriate. 

The lack of documented internal control policies and procedures may result in a lack of 

awareness, consistency in application, and compliance of regulations, which could allow for 

noncompliance with grant terms and conditions to occur and not be detected. 

The Office recently developed a formalized internal control procedure and policy manual to 

address the concern. However, these policies were not formalized during the period under 

review. 

Recommendation 

We recommend that the EAC resolve with the Office the adequacy of the recently developed 

internal control procedures. Specifically, these policies and procedures should address 

financial management activities including purchasing, payment, payroll, Federal financial 

reporting and Federal grant oversight and administration. Additionally, the EAC should 

require the Office to provide training to personnel involved in the administration of Federal 

awards to ensure and understanding of the new policies. Further, these procedures should be 

reviewed and updated on a regular basis. 

Secretary of State Response: 

The Office believes that we have consistently had effective internal controls in place for both 

the conduct of grant management and our regular day-to-day business practices. As noted in 

the Finding No. 1 narrative, the Office does rely heavily on written documentation set forth 

in State manuals, particularly the State Administrative & Accounting Manual (SAAM) and 

the myriad electronic controls built into its accounting and budget management systems. The 

knowledge that we are relying on these formally documented procedures and system controls 

provides a level of assurance that we are applying the rules and controls appropriately and 

consistently. The narrative also notes that “few personnel” are “involved in award 

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administration, accounting and financial reporting, policies and procedures” which has led, 

over the years, to the informal development of local procedures. The Office believes that the 

procedures we have applied at the agency level are consistent with the intent of the SAAM 

and further that having had few personnel involved in the grant management process over the 

life of the award has in fact enhanced familiarity and consistency in the interpretation and 

application of both State and EAC rules and regulations relating to execution of the HAVA 

Program. 

With that as a preface, the State acknowledges that the absence of a separate agency 

instruction detailing the daily processes and practices conducted to properly manage grant 

awards means that it was technically not in full compliance with the SAAM. 

While the office has had a Grants Management Manual in place for the last several years; it 

addresses the administration and management of grant programs more broadly and lacks the 

detail called for by the SAAM. Fortunately, because the lack of a detailed instruction was 

raised as a concern early enough in the audit process, the Office has had the opportunity to 

develop an agency specific internal control instruction which captures many of the practices 

already in place while also addressing the requirements outlined in the SAAM for accounting 

for grant funds in accordance with State laws and procedures and providing the controls and 

accountability necessary for grants, real and personal property, and other assets. Specifically, 

the document identifies objectives, risks, and prescribed practices for administering internal 

controls in numerous functional areas including accounts payable and receivable, cash 

handling, purchases and ledger reviews, among others. In addition, the instruction notes best 

practices in each functional area as it relates to the State’s Advantage accounting system. 

As part of the process for implementing the instruction, it will be further vetted with the State 

Controller’s Office – which is charged with updating and maintaining the SAAM – to ensure 

it adequately addresses SAAM requirements. 

Auditor’s Response: 

The Office has implemented agency specific internal control instructions which should be 

considered by EAC in resolving the finding. 

Finding No. 2 – Unsupported Payroll Costs Charged to the Grant 

The Office did not adequately support all salaries and wages charged to the grant award. 

Office of Management and Budget Circulars and Guidance, Cost Principles for State, Local, and 

Indian Tribal Governments 2 CFR § 225, Appendix B.8.h.(3) states that “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.” 

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Appendix B.8.h.(4), states that “Where employees work on multiple activities or cost objectives, 

a distribution of their salaries or wages will be supported by personnel activity reports or 

equivalent documentation which meets the standards in subsection (5)... Such documentary 

support will be required where employees work on... (b) A Federal award and a non Federal 

award” 

Appendix B.8.h.(5), states that “Personnel activity reports or equivalent documentation must 

meet the following standards: (a) They must reflect an after the fact distribution of the actual 

activity of each employee, (b) They must account for the total activity for which each employee 

is compensated, (c) They must be prepared at least monthly and must coincide with one or more 

pay periods, (d) They must be signed by the employee, and (e) Budget estimates or other 

distribution percentages determined before the services are performed do not qualify as support 

for charges to Federal awards but maybe used for interim accounting purposes.” 

The sample selection of eleven payroll periods found that up until the June 20, 2012 payroll 

distribution the Office did not have an adequate work effort certification system. Prior to June 

20, 2012, effort allocations were determined by work title and were based on an estimate of the 

amount of effort to be spent on the HAVA project. There was no semi-annual certification for 

those employees whose time was allocated 100% to HAVA or an after the fact adjustment made 

for those employees whose time was split on multiple projects in accordance with A-87. 

Payroll costs (salaries and fringe benefits) from award inception to June 20, 2012 were 

determined to be $606,180 during this period. Indirect costs associated with these costs totaled 

$29,396. 

After June 20, 2012, the Office started using the project reporting capabilities of the timekeeping 

system to account for certain employees time worked on HAVA projects. Of the sample 

selection of eleven payroll periods four of these were subsequent to the change in the 

timekeeping system. We evaluated the effort reports for two employees for each of the four 

periods selected. It was noted that five of the eight did not adequately record their time to effort 

expended on HAVA projects. This resulted in unsupported payroll costs of $11,959 for the 

sample reviewed. Accordingly, indirect costs of $564 are unsupported. 

The Office has provided retroactive certifications signed by the employee and supervisor to 

certify that the time charged to the grant was an accurate reflection of the time expended on 

HAVA projects. 

Recommendation: 

We recommend that EAC address and resolve the following recommendations that the Maine 

Secretary of State’s Office: 

(a) Transfer into the election fund $618,139 for the questioned payroll charges and $29,960 

for the applicable indirect costs as cited above. 

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(b) Perform and provide additional analysis for all payroll charges allocated to HAVA 

subsequent to the June 20, 2012 payroll distribution to determine the extent of any 

unsupported payroll costs. 

(c) Implement written policies and provide training to ensure that employees who expend 

efforts on Federal activities to accurately record their time in the Office’s timekeeping 

system. 

Secretary of State Response: 

With regard to Recommendation (a) - the Office recognizes that the identified funds 

were, in the opinion of the auditors, insufficiently documented to reflect that any work 

performed was on behalf of the HAVA grant. However, we strongly disagree that any 

financial assessment should be made as we believe that throughout the life of the grant, 

the office has acted in good faith to ensure that all incumbents holding positions funded 

by HAVA did properly record time worked, and we are confident that the work of these 

employees was performed in support of the HAVA grant. 

We would note that near the end of State of Maine Fiscal Year 2014 (May/14), the 

agency was able to restore 1.5 HAVA funded positions to the General Fund and that there 

are no remaining positions funded by the grant. Prior to that, like all agency employees, 

staff who were paid through the HAVA award were required to electronically record their 

time on a biweekly basis in the State’s Time and Attendance Management System 

(TAMS). After the time is recorded, each employee asserts that “By entering my 

electronic signature and pressing 'Accept/Sign', I am certifying that I have worked on the 

indicated cost objectives/activities/programs.” Following submission of this certification, 

a supervisor reviews the submission and having confirmed its accuracy, electronically 

signs the timecard thus approving it for payroll processing. 

It has been the longstanding practice in this Office that the activities or programs being 

worked on by respective staff are reflected in their Functional Job Analysis which is 

essentially a position description identifying specific position responsibilities and no 

additional breakdown of what they worked on is required on the timesheet. In applying 

the process as described above, we believed we were satisfying our obligation to provide 

documentation reflecting and accounting for the actual activity of each employee. 

The Finding No. 2 narrative contains the following excerpt from the Office of 

Management and Budget Circulars and Guidance, Cost Principles for State, Local, and 

Indian Tribal Governments 2 CFR § 225, Appendix B.8.h.(3) stating that “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.” 

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Again, as we believed that because the staff to whom this applied complied with the 

reporting requirements by virtue of submitting their bi-weekly electronic timecards, we 

did not require the semiannual certifications. 

Appendix B.8.h.(4), is also excerpted stating that: “Where employees work on multiple 

activities or cost objectives, a distribution of their salaries or wages will be supported by 

personnel activity reports or equivalent documentation which meets the standards in 

subsection (5)... Such documentary support will be required where employees work on... 

(b) A Federal award and a non Federal award.” In the case of this office, Appendix 

B.8.h.(4) applied to a single staff person who, like other agency staff, substantiated time 

worked in the manner detailed above and which we believed was sufficient for 

compliance. 

However, following participation in a 2012 EAC webinar, we realized that since one 

position had duties that were split between two funding sources, we should be delineating 

the respective work performed for HAVA and non HAVA cost activities. We changed 

the reporting process to allow for that staff member to reflect the breakdown, at which 

point we believed we had reestablished compliance. 

While we do feel that our actions in substantiating and electronically certifying the work 

performed under HAVA have been essentially correct and that we acted quickly when we 

became aware of the issue regarding the staff member whose time was split between 

HAVA and non HAVA work; after the auditor identified this as an issue, we reached out 

to each of the employees who previously performed in HAVA roles. The employees fully 

paid from HAVA have all retroactively certified for each six month period of 

employment that 100% of their work was performed in the execution of HAVA duties as 

detailed in each of their respective position descriptions, while the employee whose time 

was split between HAVA and non HAVA work has retroactively certified for each two 

month period of employment that at least 50% of her work was performed in the 

execution of HAVA duties as detailed in her position description. 

This follow-up action further supports the electronic timekeeping documentation for the 

affected periods and confirms that staff performed work wholly on HAVA related tasks. 

In light of this we do not believe that the EAC would have adequate grounds for seeking 

to recoup any of these personnel funds, which were in fact spent in support of the HAVA 

mission. 

Regarding Recommendation (b), we invite EAC to look over any of the payroll records 

subsequent to June 20, 2012 and stipulate that the findings will mirror those for the 

period reviewed during the audit. That is, the time associated with the split position will 

be recorded in a manner consistent with what the auditors have outlined as the preferred 

method, and the time worked by the dedicated position continued to be recorded as it was 

for the period prior to June, 2012. 

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Finally, with regard to Recommendation (c), we have updated the agency's Manual for 

Federal Grants Management to reflect the requirement for properly accounting/certifying 

any time worked on a grant in TAMS and referenced OMB Circular A-133. 

Auditor’s Response: 

We acknowledged above that the Office corrected their timekeeping method for partiallyfunded employees, and that work efforts were retroactively certified. The Office's 

corrective action plans are responsive to the remaining concerns. 

Finding No. 3– Unallowable Costs 

The Office expended HAVA funds for purposes that are not allowable under the award's terms 

and conditions or HAVA regulations. 

HAVA Section 101(b)(1) states, "A State shall use the funds provided under a payment made 

under this section to carry out one or more of the following activities: (B) Improving the 

administration of elections for Federal Office." 

The EAC, in its Funding Advisory Opinion FAO-10-002, concluded that, "The purchase of paper 

ballots... cannot be viewed as an improvement to the election process." 

The Office expended HAVA funds on two separate occasions in 2006 to purchase paper ballots. 

The two transactions amounted to $99,005 costs. Indirect costs associated with these costs 

totaled $4,959. 

It was indicated that the majority of costs incurred for the 2006 paper ballots for the Primary and 

General Elections (i.e. 84%) were covered by the State's general fund. The State was still in the 

process of implementing the new computerized central voter registration system and was 

working under a consent decree with the Department of Justice. In the absence of complete 

statewide voter registration data, and in order to assure that there would be enough ballots for 

each registered voter, the State determined it necessary to order more ballots than had been 

budgeted from the general funds. The excess cost of $99,005 was charged to HAVA Title I 

funds. 

Recommendation: 

We recommend that the EAC require the Office to transfer to the election fund $103,964 for the 

questioned cost and associated indirect costs as cited above. 

Secretary of State Response: 

With regard to Finding No. 3, the Office disagrees that Funding Advisory Opinion FAO10-002 has direct applicability in this instance. 

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FAO-10-002 related to the State of Tennessee seeking to use Help America Vote Act 

(HAVA) Section 251 funds to purchase paper ballots for federal elections. The EAC 

issued a decision that Tennessee could not use Section 251 funds to purchase paper 

ballots for federal elections since this expenditure would not have met any of the 

requirements of Title III of HAVA nor would the purchase have satisfied the provision 

for allowing the minimum payment amount applicable to a state under Section 252(c) 42 

U.S.C. § 15401(b)(2) for the improvement of the administration of federal elections. 

In the absence of Title III certification, the EAC noted as part of its reasoning that “the 

purchase of the paper ballots in Tennessee are currently funded by the counties and were 

funded and provided for by the counties prior to the passage of HAVA and, thus, cannot 

be viewed as an improvement to the election process." 

Tennessee’s proposed action would have been in lieu of their normal process. In issuing 

its decision, we believe the EAC was concluding that the use of HAVA funds by 

Tennessee to replace a ballot procurement process already in place in the state would, in 

effect, be tantamount to forgoing the Maintenance Of Effort (MOE) required of all states 

to conduct their elections processes at or above the same budgetary levels applicable 

prior to the receipt of any HAVA awards. 

The facts in Maine’s case are completely different. In Maine, ballot procurement is a 

responsibility of the state, and state funds were budgeted and expended for this purpose 

in 2006 as in previous elections. Therefore the State had already met its MOE obligations 

at the time the decision was made to purchase additional ballots, and the State was not 

looking to supplant its regularly funded ballot processes with federal grant funds. 

Instead, Maine had a well-reasoned basis for making the purchase of the additional 

ballots for the primary and general elections in 2006 and we believe that the use of the 

funds for this purpose did in fact, "improve" the elections process by ensuring there 

would be no shortage of ballots for eligible voters. 

Some background: at the time of purchase, the State (working under a consent decree 

with the U.S. Department of Justice) was still in the process of implementing a 

computerized central voter registration system and was experiencing problems with the 

system vendor that would eventually lead to termination of the vendor’s contract for 

cause by the State. In light of these issues, Maine lacked confidence in the information 

provided by the vendor, including the validity of the voter registration numbers and the 

reported figures for expected turnout. The State was concerned that the vendor’s numbers 

did not provide a basis for accurately determining the appropriate number of ballots to 

procure. Absent complete statewide voter registration data, and in order to ensure there 

would be enough ballots for each registered voter, it was determined that more ballots 

than had been budgeted from general funds were necessary. The cost of $99,005 to print 

those additional ballots was charged to HAVA Title I funds. 

Before using HAVA funds to purchase the additional ballots, Maine had followed its 

normal process for procuring ballots and had met its MOE obligations. However, the 

12 
 

 

 

 

 

 

 


 

extenuating circumstances created by the lack of accurate voter registration figures and 

turnout data necessitated a risk mitigation action to ensure that any registered voters 

desiring to vote would be able to. The basis for the action to purchase additional ballots 

for the elections in question was the legitimate concern for the potential impact from a 

shortage of ballots. 

In closing, we would point out three additional considerations. First, at the time the State 

expended the HAVA funds to purchase additional ballots the EAC had not issued any 

guidance that indicated such an expenditure would not be an improvement to the election 

process. In the absence of explicit guidance, the methods of compliance are left to the 

discretion of the State. Moreover, the Funding Advisory Opinion FAO-10-002 was not 

issued until four years after Maine’s expenditure decision. Second, neither previous nor 

subsequent to this one period has the state utilized HAVA funds for such purposes, thus 

confirming that the 2006 action was due to extenuating circumstances. Third, the State 

did identify the purchase of these ballots in its annual report to EAC for the period 

1/1/2006 to 12/31/2006 in Section 101(b)(1)(B) - Administration of Elections for Fed 

Office Improvements on the line titled “Federal Election Ballot Costs (above MOE)” and 

never received any questions or comments or any guidance contrary to its actions. In light 

of all these considerations, the office does not believe it should be required to transfer 

monies back to the Election Fund and would ask the EAC to find the same. 

Auditor’s Response: 

We recommend that EAC provide further guidance on the allowability of the purchase of 

paper ballots. 

Finding No. 4 – Inadequate Equipment Management 

The Office’s equipment management is inadequate in regards to the maintenance of property 

records and the performance of a physical observation of inventory. 

The State Administrative & Accounting Manual (SAAM) Chapter 30.10.40, states that, 

“Departments are responsible for developing internal control policies and procedures to protect 

and control the use of all Fixed Assets.” At a minimum, the Department must maintain a Fixed 

Asset Inventory system that include records for all inventorial assets. Per SAM Chapter 

30.40.30, "the official asset record is the Advantage Accounting System" further, the list should 

contain the following categories: Department Name and Code Number, Account, Acquisition 

Date, Cost, Depreciation, Description, Disposal Authorization, Inventory Control Number, 

Location Code, Salvage Value, and Useful Life." Finally, SAAM Chapter 30.45.10 requires 

Departments to "conduct physical inventories annually for all inventorial assets." 

The Office has documented internal control policies and procedures for equipment management. 

However, the current Office policy does not comply with the SAAM in the area of Inventory 

Record Requirements. The policy does not require the use of the Advantage Accounting System 

or maintenance of all required detail categories. 

13 
 

 

 


 

Additionally, two of the fourteen invoices selected for equipment testing had inventorial assets 

that were not included on an inventory list. Three assets were identified over $5,000 for a total of 

$35,184 that should have been included in the inventory system. Finally, the Office has not 

conducted a physical inventory on an annual basis for all inventorial assets. 

The deficiencies in equipment management result from the Office not implementing policies 

meeting the minimum state requirements for the protection and control of Fixed Assets. 

Recommendation 

We recommend that EAC address and resolve the following recommendations that the Maine 

Secretary of State’s Office: 

(a) Modify their equipment management policies and procedures to fully comply with 

SAAM Chapter 30. 

(b) Implement procedures to ensure a physical inventory is conducted on an annual basis and 

such inventory be adequately documented. 

Secretary of State Response: 

With regard to Recommendation (a), we will take action to assign and document a Property 

Officer. Additionally, although we do maintain agency inventory records, we will update the 

Agency inventory management policy to bring it into compliance with the SAAM, Chapter 

30 guidance so that it calls for purchases meeting the applicable thresholds to be recorded as 

fixed assets in the state's accounting system in accordance with the Controller policy. 

With regard to Recommendation (b), we do recognize the requirement for an annual physical 

inventory, but we believe that the annual equipment and preparation check that we do via 

letter or telephone prior to each year's elections satisfies the requirement. We lack the 

personnel and budgetary resources to conduct annual onsite visits to over 500 municipalities 

and do not believe that intensive level of effort is necessary to achieve the objectives of the 

inventory requirement. We would ask that the EAC confirm whether our approach to 

performing the inventory is acceptable. 

Additionally, we realize the procedures currently utilized for retaining documentation 

relating to these inventory events needs to be strengthened and we will update the agency 

instruction accordingly to better define the process for retention of the inventory records. 

Auditor’s Response: 

The corrective action, pending approval from EAC, is responsive to the concerns. 

We provided a draft of our report to the appropriate individuals of the Office of the Maine 

Secretary of State. We considered any comments received prior to finalizing this report. 

14
 
The Office responded on December 16, 2014 and generally agreed with the report’s findings and 

recommendations. The EAC responded on December 16, 2014 and stated they will work with the 

Office to ensure appropriate corrective action. The Office’s complete response is included as 

Appendix A-1 and the EAC’s complete response as Appendix A-2. 

McBride, Lock & Associates, LLC performed the related audit procedures between June 5, 2014 

and October 21, 2014. 

(Original Signed by McBride, Lock & Associates, LLC) 

McBride, Lock & Associates, LLC 

October 21, 2014 

15 
Appendix A-1
 
Department of the Secretary of State 

Bureau of Corporations, Elections and Commissions 

Matthew Dunlap 

Secretary of State 

Julie L. Flynn 

Deputy Secretary of State 

December 16, 2014 

Curtis Crider 

Office of Inspector General 

1335 East West Highway 

Suite 4300 

Silver Spring, MD 20910 

Re: Maine Response to Draft HAVA Performance Audit Report 

Dear Inspector General Crider, 

The Secretary of State appreciates this opportunity to submit a written response to the draft report entitled 

Performance Audit Report – Administration of Payments Received Under the Help America Vote Act by 

the Maine Secretary of State, which was provided to this office on November 18, 2014. We understand 

that the comments we provide herein to each of the report’s findings will be copied from this response 

into the final report. 

Finding No. 1 – Documentation of Policies and Procedures 

The Office believes that we have consistently had effective internal controls in place for both the conduct 

of grant management and our regular day-to-day business practices. As noted in the Finding No. 1 

narrative, the Office does rely heavily on written documentation set forth in State manuals, particularly 

the State Administrative & Accounting Manual (SAAM) and the myriad electronic controls built into its 

accounting and budget management systems. The knowledge that we are relying on these formally 

documented procedures and system controls provides a level of assurance that we are applying the rules 

and controls appropriately and consistently. The narrative also notes that “few personnel” are “involved in 

award administration, accounting and financial reporting, policies and procedures” which has led, over the 

years, to the informal development of local procedures. The Office believes that the procedures we have 

applied at the agency level are consistent with the intent of the SAAM and further that having had few 

personnel involved in the grant management process over the life of the award has in fact enhanced 

familiarity and consistency in the interpretation and application of both State and EAC rules and 

regulations relating to execution of the HAVA Program. 

101 State House Station, Augusta, Maine 04333-0101 

www.Maine.gov/sos/cec; tel. 207-624-7736 
With that as a preface, the State acknowledges that the absence of a separate agency instruction detailing 

the daily processes and practices conducted to properly manage grant awards means that it was 

technically not in full compliance with the SAAM. 

While the office has had a Grants Management Manual in place for the last several years; it addresses the 

administration and management of grant programs more broadly and lacks the detail called for by the 

SAAM. Fortunately, because the lack of a detailed instruction was raised as a concern early enough in the 

audit process, the Office has had the opportunity to develop an agency specific internal control instruction 

which captures many of the practices already in place while also addressing the requirements outlined in 

the SAAM for accounting for grant funds in accordance with State laws and procedures and providing the 

controls and accountability necessary for grants, real and personal property, and other assets. Specifically, 

the document identifies objectives, risks, and prescribed practices for administering internal controls in 

numerous functional areas including accounts payable and receivable, cash handling, purchases and 

ledger reviews, among others. In addition, the instruction notes best practices in each functional area as it 

relates to the State’s Advantage accounting system. 

As part of the process for implementing the instruction, it will be further vetted with the State Controller’s 

Office – which is charged with updating and maintaining the SAAM – to ensure it adequately addresses 

SAAM requirements. 

A copy of the new instruction as well as the Grant Management Manual has been included as part of this 

response. 

Finding No. 2 – Unsupported Payroll Costs Charged to the Grant 

With regard to Recommendation (a) - the Office recognizes that the identified funds were, in the opinion 

of the auditors, insufficiently documented to reflect that any work performed was on behalf of the HAVA 

grant. However, we strongly disagree that any financial assessment should be made as we believe that 

throughout the life of the grant, the office has acted in good faith to ensure that all incumbents holding 

positions funded by HAVA did properly record time worked, and we are confident that the work of these 

employees was performed in support of the HAVA grant. 

We would note that near the end of State of Maine Fiscal Year 2014 (May/14), the agency was able to 

restore 1.5 HAVA funded positions to the General Fund and that there are no remaining positions funded 

by the grant. Prior to that, like all agency employees, staff who were paid through the HAVA award were 

required to electronically record their time on a biweekly basis in the State’s Time and Attendance 

Management System (TAMS). After the time is recorded, each employee asserts that “By entering my 

electronic signature and pressing 'Accept/Sign', I am certifying that I have worked on the indicated cost 

objectives/activities/programs.” Following submission of this certification, a supervisor reviews the 

submission and having confirmed its accuracy, electronically signs the timecard thus approving it for 

payroll processing. 

It has been the longstanding practice in this Office that the activities or programs being worked on by 

respective staff are reflected in their Functional Job Analysis which is essentially a position description 

identifying specific position responsibilities and no additional breakdown of what they worked on is 

required on the timesheet. In applying the process as described above, we believed we were satisfying our 

obligation to provide documentation reflecting and accounting for the actual activity of each employee. 

101 State House Station, Augusta, Maine 04333-0101 

www.Maine.gov/sos/cec; tel. 207-624-7736 
The Finding No. 2 narrative contains the following excerpt from the Office of Management and Budget 

Circulars and Guidance, Cost Principles for State, Local, and Indian Tribal Governments 2 CFR § 225, 

Appendix B.8.h.(3) stating that “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.” 

Again, as we believed that because the staff to whom this applied complied with the reporting 

requirements by virtue of submitting their bi-weekly electronic timecards, we did not require the semiannual certifications. 

Appendix B.8.h.(4), is also excerpted stating that: “Where employees work on multiple activities or cost 

objectives, a distribution of their salaries or wages will be supported by personnel activity reports or 

equivalent documentation which meets the standards in subsection (5)... Such documentary support will 

be required where employees work on... (b) A Federal award and a non Federal award.” In the case of 

this office, Appendix B.8.h.(4) applied to a single staff person who, like other agency staff, substantiated 

time worked in the manner detailed above and which we believed was sufficient for compliance. 

However, following participation in a 2012 EAC webinar, we realized that since one position had duties 

that were split between two funding sources, we should be delineating the respective work performed for 

HAVA and non HAVA cost activities. We changed the reporting process to allow for that staff member to 

reflect the breakdown, at which point we believed we had reestablished compliance. 

While we do feel that our actions in substantiating and electronically certifying the work performed under 

HAVA have been essentially correct and that we acted quickly when we became aware of the issue 

regarding the staff member whose time was split between HAVA and non HAVA work; after the auditor 

identified this as an issue, we reached out to each of the employees who previously performed in HAVA 

roles. The employees fully paid from HAVA have all retroactively certified for each six month period of 

employment that 100% of their work was performed in the execution of HAVA duties as detailed in each 

of their respective position descriptions, while the employee whose time was split between HAVA and 

non HAVA work has retroactively certified for each two month period of employment that at least 50% of 

her work was performed in the execution of HAVA duties as detailed in her position description. 

This follow-up action further supports the electronic timekeeping documentation for the affected periods 

and confirms that staff performed work wholly on HAVA related tasks. In light of this we do not believe 

that the EAC would have adequate grounds for seeking to recoup any of these personnel funds, which 

were in fact spent in support of the HAVA mission. 

Regarding Recommendation (b), we invite EAC to look over any of the payroll records subsequent to 

June 20, 2012 and stipulate that the findings will mirror those for the period reviewed during the audit. 

That is, the time associated with the split position will be recorded in a manner consistent with what the 

auditors have outlined as the preferred method, and the time worked by the dedicated position continued 

to be recorded as it was for the period prior to June, 2012. 

Finally, with regard to Recommendation (c), we have updated the agency's Manual for Federal Grants 

Management to reflect the requirement for properly accounting/certifying any time worked on a grant in 

TAMS and referenced OMB Circular A-133. 

101 State House Station, Augusta, Maine 04333-0101 

www.Maine.gov/sos/cec; tel. 207-624-7736 
Finding No. 3 – Unallowable Costs 

With regard to Finding No. 3, the Office disagrees that Funding Advisory Opinion FAO-10-002 has direct 

applicability in this instance. 

FAO-10-002 related to the State of Tennessee seeking to use Help America Vote Act (HAVA) Section 

251 funds to purchase paper ballots for federal elections. The EAC issued a decision that Tennessee could 

not use Section 251 funds to purchase paper ballots for federal elections since this expenditure would not 

have met any of the requirements of Title III of HAVA nor would the purchase have satisfied the 

provision for allowing the minimum payment amount applicable to a state under Section 252(c) 42 U.S.C. 

§ 15401(b)(2) for the improvement of the administration of federal elections. 

In the absence of Title III certification, the EAC noted as part of its reasoning that “the purchase of the 

paper ballots in Tennessee are currently funded by the counties and were funded and provided for by the 

counties prior to the passage of HAVA and, thus, cannot be viewed as an improvement to the election 

process." 

Tennessee’s proposed action would have been in lieu of their normal process. In issuing its decision, we 

believe the EAC was concluding that the use of HAVA funds by Tennessee to replace a ballot 

procurement process already in place in the state would, in effect, be tantamount to forgoing the 

Maintenance Of Effort (MOE) required of all states to conduct their elections processes at or above the 

same budgetary levels applicable prior to the receipt of any HAVA awards. 

The facts in Maine’s case are completely different. In Maine, ballot procurement is a responsibility of the 

state, and state funds were budgeted and expended for this purpose in 2006 as in previous elections. 

Therefore the State had already met its MOE obligations at the time the decision was made to purchase 

additional ballots, and the State was not looking to supplant its regularly funded ballot processes with 

federal grant funds. 

Instead, Maine had a well-reasoned basis for making the purchase of the additional ballots for the primary 

and general elections in 2006 and we believe that the use of the funds for this purpose did in fact, 

"improve" the elections process by ensuring there would be no shortage of ballots for eligible voters. 

Some background: at the time of purchase, the State (working under a consent decree with the U.S. 

Department of Justice) was still in the process of implementing a computerized central voter registration 

system and was experiencing problems with the system vendor that would eventually lead to termination 

of the vendor’s contract for cause by the State. In light of these issues, Maine lacked confidence in the 

information provided by the vendor, including the validity of the voter registration numbers and the 

reported figures for expected turnout. The State was concerned that the vendor’s numbers did not provide 

a basis for accurately determining the appropriate number of ballots to procure. Absent complete 

statewide voter registration data, and in order to ensure there would be enough ballots for each registered 

voter, it was determined that more ballots than had been budgeted from general funds were necessary. The 

cost of $99,005 to print those additional ballots was charged to HAVA Title I funds. 

101 State House Station, Augusta, Maine 04333-0101 

www.Maine.gov/sos/cec; tel. 207-624-7736 
 

Before using HAVA funds to purchase the additional ballots, Maine had followed its normal process for 

procuring ballots and had met its MOE obligations. However, the extenuating circumstances created by 

the lack of accurate voter registration figures and turnout data necessitated a risk mitigation action to 

ensure that any registered voters desiring to vote would be able to. The basis for the action to purchase 

additional ballots for the elections in question was the legitimate concern for the potential impact from a 

shortage of ballots. 

In closing, we would point out three additional considerations. First, at the time the State expended the 

HAVA funds to purchase additional ballots the EAC had not issued any guidance that indicated such an 

expenditure would not be an improvement to the election process. In the absence of explicit guidance, the 

methods of compliance are left to the discretion of the State. Moreover, the Funding Advisory Opinion 

FAO-10-002 was not issued until four years after Maine’s expenditure decision. Second, neither 

previous nor subsequent to this one period has the state utilized HAVA funds for such purposes, thus 

confirming that the 2006 action was due to extenuating circumstances. Third, the State did identify the 

purchase of these ballots in its annual report to EAC for the period 1/1/2006 to 12/31/2006 in Section 101 

(b)(1)(B) - Administration of Elections for Fed Office Improvements on the line titled “Federal Election 

Ballot Costs (above MOE)” and never received any questions or comments or any guidance contrary to its 

actions. In light of all these considerations, the office does not believe it should be required to transfer 

monies back to the Election Fund and would ask the EAC to find the same. 

Finding No. 4 – Inadequate Equipment Management 

With regard to Recommendation (a), we will take action to assign and document a Property Officer. 

Additionally, although we do maintain agency inventory records, we will update the Agency inventory 

management policy to bring it into compliance with the SAAM, Chapter 30 guidance so that it calls for 

purchases meeting the applicable thresholds to be recorded as fixed assets in the state's accounting system 

in accordance with the Controller policy. 

With regard to Recommendation (b), we do recognize the requirement for an annual physical inventory, 

but we believe that the annual equipment and preparation check that we do via letter or telephone prior to 

each year's elections satisfies the requirement. We lack the personnel and budgetary resources to conduct 

annual onsite visits to over 500 municipalities and do not believe that intensive level of effort is necessary 

to achieve the objectives of the inventory requirement. We would ask that the EAC confirm whether our 

approach to performing the inventory is acceptable. 

Additionally, we realize the procedures currently utilized for retaining documentation relating to these 

inventory events needs to be strengthened and we will update the agency instruction accordingly to better 

define the process for retention of the inventory records. 

101 State House Station, Augusta, Maine 04333-0101 

www.Maine.gov/sos/cec; tel. 207-624-7736 
We have included three other documents with this response: Maine’s Manual for Federal Grants 

Management,Internal Control Policy for Business Office Practices and a copy of the FY06 Title I 

Financial Report showing the expenditure of HAVA funds to pay for additional ballots for the 2006 

Primary and General Elections. These document s are referenced in the State’s response to the applicable 

finding in the draft report. 

We would like to repeat our thanks and appreciation for the professionalism of the McBride, Lock team 

during their visits to Maine, as well as their assistance with reviewing the amended FY13 Title I and Title 

II Financial Reports that we will submit to the U.S. Elections Assistance Commission as a result of the 

audit reconciliation. We look forward to receiving the final report and response from the EAC as well as 

any feedback on the two instruction manuals we have created (i.e. Internal Control Policy) or updated (i.e. 

Grants Management manual) as a result of the audit and subsequent findings. 

Please let us know if you have any questions or need clarification regarding this resp onse. 

Sincerely, 

Matthew Dunlap, 

Secretary of State 

pc: Julie L. Flynn, Deputy Secretary of State 

101 Sta te House Station, Augusta, Maine 04333-0101 

www.Maine.gov/sos/cec; tel. 207-624-7736 
Appendix A-2
 
EAC RESPONSE TO THE DRAFT AUDIT: 

OIG Performance Audit Report on the Administration of 

Payments Received Under the Help America Vote Act by the 

Maine Secretary of State for the Period May 7, 2003 through 

September 30, 2013. 

December 16, 2014 

MEMORANDUM 

To: Curtis Crider 

Inspector General 

From: Alice P. Miller, Chief 9fJr@.1r/Je~& 

Acting Executive or 

Subject: Draft Performance Audit Report - "Administration of Payments 

Received Under the Help America Vote Act by Maine Secretary of 

State" 

Thank you for this opportunity to review and respond to the draft audit report for 

the Maine Secretary of State (SOS). 

The Election Assistance Commission (EAC) will work with the SOS to ensure 

appropriate corrective action. 
Appendix B 
 
 

 

 

 

 

 

 

 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 


 

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 and of 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 Office employees about the organization and operations of the 

HAVA program. 

•	 Reviewed prior single audit reports and other reviews related to the State’s financial 

management systems and the HAVA program for the period under review. 

•	 Reviewed policies, procedures and regulations for the Office management and 

accounting systems as they relate to the administration of the HAVA program. 

•	 Analyzed the inventory lists of equipment purchased with HAVA funds 

•	 Tested major purchases and the supporting documentation. 

•	 Tested randomly sampled payments made with HAVA funds. 

•	 Tested amounts charged as indirect costs by verifying the approved rate and the 

reasonableness of the base. 

•	 Evaluated compliance with the requirements for accumulating financial information 

reported to the Commission on the financial status reports and progress reports, 

accounting for property, purchasing HAVA related goods and services, and accounting 

for salaries. 

•	 Verified the establishment and maintenance of an election fund. 

•	 Verified the State expenditures met the Maintenance of Expenditures requirement 

•	 Conducted site visits of selected counties to observe physical security/safeguard of 

equipment purchased with HAVA funds and ensure compliance with federal regulation. 

•	 Verified that the matching requirement was timely met and matching expenditures met 

the prescribed criteria and allowability requirements of HAVA. 

•	 Verified program income was properly accounted for and not remitted to the State’s 

general fund. 

23
 
Appendix C 
 
 


 

Appendix C 

MONETARY IMPACT AS OF SEPTEMBER 30, 2013 

Additional 

Questioned Funds for 

Description Costs Program 

Unsupported Payroll Costs $ 648,099 $ -

Unallowable Ballot Costs 103,964 ­

Total $ 752,063 $ ­

24
 
 

 

OIG’s Mission 

 

Help to ensure efficient, effective, and transparent EAC operations and 

programs

 

 

 

 

 

Obtaining Copies 

of OIG Reports 

Copies of OIG reports are available on the OIG website, 

www.eac.gov/inspector_general/

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

1335 East West Highway - Suite 4300

Silver Spring, MD 20910

To order by phone: Voice: (301) 734-3104

 Fax: (301) 734-3115

 

 

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

1335 East West Highway - Suite 4300

Silver Spring, MD 20910

E-mail: eacoig@eac.gov

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

On-Line Complaint Form: www.eac.gov/inspector_general/

FAX: (301)-734-3115