OFFICE OF INSPECTOR GENERAL

U.S. Election Assistance Commission

AUDIT OF THE HELP AMERICA VOTE ACT GRANTS 

AWARDED TO THE STATE OF WASHINGTON

Report No. G22WA0015-22-04

September 6, 2022
HIGHLIGHTS

Report No. G22WA0015-22-04

What OIG Audited 

The Office of Inspector General, through the 

independent public accounting firm of McBride, 

Lock & Associates, LLC, audited funds received by 

the State of Washington under the Help America 

Vote Act (HAVA), including state matching funds 

and program income, totaling $30.3 million.

AUDIT OF THE HELP AMERICA VOTE 

ACT GRANTS AWARDED TO THE STATE 

OF WASHINGTON

What OIG Recommended

The Office of Inspector General made five 

recommendations to address the noted deficiencies:

September 6, 2022

What OIG Found

The Office of Inspector General found that the 

Washington Secretary of State generally accounted 

for HAVA funds in accordance with applicable 

requirements, accounted for and controlled property 

purchased, and used the funds in a manner 

consistent with informational plans submitted during 

the audit period. 

However, the Secretary of State (1) charged 

$190,363 in unallowable subrecipient costs to the 

CARES award; (2) may not have correctly calculated 

and reported interest earned on its financial reports; 

and (3) incorrectly cataloged some expenditures in 

its Schedule of Expenditures of Federal Awards.

The objectives of the audit were to determine 

whether the State of Washington: 

(1) Used funds for authorized purposes in

accordance with Section 101 and Section 251 of

HAVA and other applicable requirements;

(2) properly accounted for and controlled property

purchased with the HAVA payments; and

(3) used funds in a manner consistent with the

informational plans provided to EAC.

U.S. Election Assistance Commission | Office of Inspector General
 

 

 

 

 

 

 

 

OFFICE OF INSPECTOR GENERAL 

U.S. Election Assistance Commission 

DATE: September 6, 2022 

TO: U.S. Election Assistance Commission, Interim Executive Director, Mark Robbins 

FROM: U.S. Election Assistance Commission, Inspector General, Brianna Schletz 

SUBJECT: Audit of the Help America Vote Act Grants Awarded to the State of Washington 

(Report No. G22WA0015-22-04) 

This memorandum transmits the final report on Help America Vote Act grants awarded to the 

state of Washington. The Office of Inspector General contracted McBride, Lock & Associates, 

LLC, an independent certified public accounting firm, to conduct the audit. The contract 

required that the audit be performed in accordance with U.S. generally accepted government 

auditing standards. We monitored the firm’s work to ensure that it adhered to those standards. 

Please keep us informed of the actions taken on the report’s five open recommendations, as we 

will track the status of their implementation. 

We appreciate the assistance you and your staff provided to us during this audit. 

cc: Commissioner Thomas Hicks, Chair 

Commissioner Christy McCormick, Vice Chair 

Commissioner Benjamin W. Hovland 

Commissioner Donald L. Palmer 
 

 

McBRIDE, LOCK & ASSOCIATES, LLC 

Certified Public Accountants 

Established 1980 

Performance Audit Report 

Administration of Payments Received Under the Help America Vote Act by 

the Washington Secretary of State 

Prepared for 

The United States Election Assistance Commission (EAC) 

Office of Inspector General 

By 

McBride, Lock & Associates, LLC 

July 2022 

4151 N. Mulberry Drive, Suite 275 p. 816-221-4559 admin@mcbridelock.com 

Kansas City, Missouri 64116 f. 816-221-4563 www.mcbridelock.com 
 

 

 

 

 

 

 

Performance Audit Report 

Administration of Payments Received Under the Help America Vote Act by 

the Washington Secretary of State 

TABLE OF CONTENTS 

Page 

EXECUTIVE SUMMARY 1 

BACKGROUND 2 

AUDIT OBJECTIVES 4 

SCOPE AND METHODOLOGY 4 

AUDIT RESULTS 6 

APPENDICES: 

Appendix A-1: Response of the Washington 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 Scope and Methodology 

Appendix C-1: Election Security Expenditures by Budget Category and Program 

Category 

Appendix C-2: Section 251 Reissued Expenditures by Spending Category 

Appendix C-3: CARES Act Expenditures by Cost Category 

Appendix D: Monetary Impact as of September 30, 2020 for Election Security and 

Section 251 Reissued Grants and as of December 31, 2020 for CARES 

Act Grant 
 

 

 

 

 

 

 

 

 

 

U.S. Election Assistance Commission 

Performance Audit Report 

Administration of Payments Received Under the Help America Vote Act by 

the Washington 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 of the 

administration of payments received under the Help America Vote Act (HAVA or the Act) by the 

Washington Secretary of State’s Office (Office). The payments received by the Office are 

identified as Election Security, Section 251 Reissued, and the CARES Act. The scope of the audit 

includes: Election Security administration from inception on May 13, 2018 through September 30, 

2020; Section 251 Reissued administration from inception on October 1, 2018 through September 

30, 2020; CARES Act administration from inception on April 16, 2020 through December 31, 

2020, including matching fund expenditures made after December 31, 2020. The objective of the 

audit was to determine whether the Office used payments authorized by Sections 101 and 251 of 

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

requirements; properly accounted for and controlled the funds and property purchased with HAVA 

payments; and, used the funds in a manner consistent with the budget plan provided to EAC. 

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

requirements, specifically: 

• Expend payments in accordance with Federal cost principles established by the Office of 

Management and Budget (OMB) – (2 CFR 200). 

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

• Maintain documents and records subject to audit to determine whether payments were used 

in compliance with HAVA. 

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 

requirements mentioned above and for the periods mentioned above. The exceptions are as 

follows: 

1. During our audit, we selected 37 subrecipient expenditures for testing totaling $3,954,622 

($3,281,392 HAVA and $673,230 match). We noted 3 expenditures of CARES Act 

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funding by subrecipients totaling $190,363 ($158,635 federal and $31,728 match) that 

were approved by the Office that appear to be unallowable per the terms and conditions of 

the award. 

2. The Federal Financial Report (FFR) for the fiscal year ended September 30, 2020 for the 

Election Security grants reported $303,369 of cumulative program income earned. 

However, the amount supported by the underlying accounting records was $262,865, a 

difference of $40,504 which is equal to the amount of program income earned and reported 

on the September 30, 2018 FFR for the Election Security grants. 

3. The Schedule of Expenditures of Federal Awards (SEFA) for the State of Washington 

reported $4,310,991 of expenditures for the year ended June 30, 2019 under Catalog of 

Federal Domestic Assistance (CFDA) 90.401, Help America Vote Act Requirements 

Payments. That amount included $3,546,342 of Election Security Grant expenditures with 

a correct CFDA of 90.404. The SEFA reported $3,908,188 of expenditures for the year 

ended June 30, 2020 under Catalog of Federal Domestic Assistance (CFDA) 90.401, Help 

America Vote Act Requirements Payments. That amount included $1,369,278 of Election 

Security Grant expenditures with a correct CFDA of 90.404. 

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 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 grants to States authorized by HAVA under Title I 

and Title 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; developing a state plan for requirements payments; 

improving, acquiring, leasing, modifying, or replacing voting systems, and methods for 

casting and counting votes; improving the accessibility and quantity of polling places; and 

establishing toll-free telephone hotlines that voters may use. 

• 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. 

The HAVA Election Security, Section 251 Reissued and CARES Act grants also require that states 

must: 

• Maintain funds in a state election fund (as described in Section 104 (d) of HAVA). 

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• Expend payments in accordance with Federal cost principles established by the Office of 

Management and Budget (OMB) – (2 C.F.R. § 200). 

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

must include a summary of expenditures aligned with budget categories in the grantee’s 

plan, a list of equipment obtained with the funds, and a description of how the funded 

activities met the goals of the plan. 

• Provide matching funds of the Federal funds within a period stipulated by the award to be 

documented on the annual SF-425 submission 

• Maintain documents and records subject to audit to determine whether payments were used 

in compliance with HAVA. 

The Awardee – The Washington Secretary of State 

The HAVA funds were awarded to the Washington Secretary of State. The mission of the Office 

of the Secretary of State is to promote public trust by safeguarding vital government records, 

documents, publications and processes; preserving the integrity of elections in Washington State; 

providing the business community and public with easy access to information about corporations 

and charities; performing public outreach to improve civic knowledge and participation; and 

leveraging technology to improve efficiency and enhance customer services. 

Responsibilities of the Secretary of State’s office include supervising state and local elections and 

certifying the results of state primaries and general elections; filing and verifying initiatives and 

referendums; and producing and distributing state voter’s pamphlet and election-notice legal 

advertising. 

Help America Vote Act State of Washington State Plans 

The Washington Secretary of State’s HAVA budget narratives were prepared by the Secretary of 

State. 

Election Security 2018 and 2020 

The main objectives of the 2018 Election Security grant was to improve the administration of elections 

for federal office by enhancing election technology and make election security improvements. The 

Office created a Security Operations Center (SOC) to address cyber vulnerabilities at the state and 

county levels. SOC personnel were tasked with regularly reviewing state and county voting equipment, 

voter registration systems, and computer system for security vulnerabilities and to ensure compliance 

with current security policies. Results from these reviews are used to create tailored training for each 

county to ensure deficiencies are addressed. Major planned expenditures included monitoring sensors, 

security and event management software, upgraded firewalls, and multi-factor authentication for all 

key personnel with access to the centralized voter registration system. 

Section 251 Reissued 

On July 15, 2019, the Office was informed of an interim administrative closeout of the HAVA 

Section 251 grant through September 30, 2018. On that date, the unexpended program income was 

carried forward and reissued as a new grant. The funds were to be spent in accordance with Section 

251. The Office expended these funds mostly for the purpose of the VoteWA voter registration 

system. 

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CARES Act 

The objective of the 2020 CARES Act was to prevent, prepare for, and respond to coronavirus, 

domestically or internationally, for the 2020 Federal election cycle. To address the impacts of 

coronavirus on the election, the Office distributed the funds to the 39 county election offices to use for 

additional staffing, facility rental, equipment needs, and personal protection equipment supplies to 

protect election workers against the virus. 

AUDIT OBJECTIVES 

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

1. Used funds for authorized purposes in accordance with Section 101 and Section 251 of 

HAVA and other applicable requirements; 

2. Properly accounted for and controlled property purchased with HAVA payments; and 

3. Used the funds in a manner consistent with the informational plans provided to EAC. 

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: 

• Expend payments in accordance with Federal cost principles established by the Office of 

Management and Budget (OMB) – (2 CFR 200). 

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

• Maintain documents and records subject to audit to determine whether payments were used 

in compliance with HAVA. 

SCOPE AND METHODOLOGY 

We audited the Election Security grant funds received and disbursed by the Office from May 13, 

2018 through September 30, 2020. These funds are related to the appropriation of $380 million 

under the Consolidated Appropriations Act (CAA), 2018 (P.L. 115-151) and $425 million under 

the CAA, 2020 (P.L. 115-141). We audited the Section 251 grant funds reissued to and disbursed 

by the Office from October 1, 2018, through September 30, 2020. We audited the CARES Act 

grant funds received and disbursed by the Office from April 16, 2020, through December 31, 2020. 

These funds are related to the $400 million authorized by the U.S. Congress under the Coronavirus 

Aid, Relief and Economic Security Act (P.L. 116-136). The scope of activity audited is shown in 

the following table: 

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Election Section 251 CARES 

Description Security Funds Reissued Funds Act Funds 

Funds Received from EAC $ 16,805,723 $ - $ 8,343,778 

State Matching Funds 143,279 - 1,138,704 

Program Income 262,865 3,572,432 43,903 

Total Funds $ 17,211,867 $ 3,572,432 $ 9,526,385 

Less Disbursements (6,307,141) (3,283,127) (6,764,797) 

Fund Balance $ 10,904,726 $ 289,305 $ 2,761,588 

Program income in the above table consists entirely of interest earned on the federal funds as 

reported in the program income section of the federal financial reports. 

The Office’s Election Security expenditures detailed by budget and program category, Section 251 

Expenditures detailed by spending category, and CARES Act expenditures detailed by cost 

category are included as Appendix C. 

In planning and performing our audit, we identified the following internal control components and 

underlying internal control principles as significant to the audit objective: 

Objective Component Principle 

1 Control Activities Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

Information and Communication Uses Relevant Information 

Communicates Internally 

Communicates Externally 

2 Control Activities Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

Information and Communication Communicates Externally 

3 Control Activities Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

We assessed the design, implementation, and operating effectiveness of these internal controls and 

identified deficiencies that we believe could affect the Office’s ability to use funds for authorized 

purposes, and properly account for and control property. The internal control deficiencies we found 

are discussed in the Audit Results section of this report. 

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Additionally, for the components and principles which we determined to be significant, we 

assessed the internal controls and compliance with laws and regulations necessary to satisfy the 

audit objective. 

However, because our review was limited to these internal control components and underlying 

principles, it may not have disclosed all internal control deficiencies that may have existed at the 

time of this audit. 

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, we concluded that the Office generally accounted for 

HAVA funds in accordance with the requirements mentioned above, accounted for and controlled 

property purchased, and used the funds in a manner consistent with informational plans submitted 

during the audit period. The exceptions to applicable compliance requirements are described 

below. 

Finding No. 1 – CARES Act Unallowable Costs 

During our audit, we selected 37 subrecipient expenditures for testing totaling $3,954,622 

($3,281,392 HAVA and $673,230 match). We noted 3 expenditures of CARES Act funding by 

subrecipients totaling $190,363 ($158,635 federal and $31,728 match) that were approved by the 

Office that appear to be unallowable per the terms and conditions of the award, as follows: 

Lewis County expended $100,000 of CARES Act funding ($83,333 federal and $16,667 match) 

for a ballot sorting system. The documentation we reviewed indicated that the County Commission 

had approved the purchase of this system in a meeting on September 16, 2019, prior to the onset 

of the COVID-19 pandemic in 2020. The County requested approval to use CARES funding for 

the purchase in April 2020 and the purchase was made in June 2020. 

Pend Oreille County expended $56,248 of CARES Act funding ($46,873 federal and $9,375 

match) for an election tabulating system. The documentation we reviewed indicated that the 

County Commission approved the purchase in a meeting on October 21, 2019, prior to the onset 

of the COVID-19 pandemic in 2020. The contract for the purchase was signed on March 16, 2020. 

In the County’s request to the office to charge the purchase to CARES Act funding on November 

30, 2020, the County stated that the purchase had already been budgeted for 2020 prior to the 

pandemic. The request was initially denied by the Office but was subsequently allowed after the 

Office received approval from EAC. 

Lincoln County expended $34,115 of CARES Act funding ($28,429 federal and $5,686 match) for 

a ballot tabulation system. The documentation we reviewed indicated that the contract for the 

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equipment was signed on February 3, 2020 and the purchase was made from a quote obtained by 

the County with an expiration date of December 31, 2019. The Office spoke to the County Auditor 

who stated that they had been working with the vendor prior to making the purchase because of 

out-of-date equipment and software. 

As stated in the Notice of Grant Award, the purpose of the HAVA CARES Act funding was to 

“prevent, prepare for, and respond to coronavirus, domestically or internationally, for the 2020 

Federal election cycle.” The EAC provided guidance on the use of CARES Act funding in the 

form of Frequently Asked Questions, which state that, “supplanting occurs when a state or local 

government reduces state or local funds for an activity specifically because federal funds are 

available or expected to be available to fund that same activity. Supplanting of state funds with 

HAVA funds is not permitted. Federal funds must be used to supplement existing state or local 

funds and may not replace state or local funding that has been appropriated or allocated for the 

same purpose or that is required by law.” 

The subrecipients had planned the purchases of the equipment prior to the onset of the pandemic, 

but due to the significant costs had not finalized the purchases until 2020. The equipment was 

beneficial to the administration of the 2020 federal elections and was therefore approved by the 

Office. 

The audit noted $190,363 ($158,635 federal and $31,728 match) of questioned costs which were 

determined to not be allowable per the terms and conditions of the CARES Act award. 

Recommendation 

We recommend that the EAC require the Office to: 

1. Transfer $158,635 into the election fund for the unallowable expenditures noted. 

2. Implement procedures and training to ensure that supplanting of state and local funds with 

federal funds does not occur. 

Secretary of State’s Response: 

We disagree that the three identified approved expenditures are supplanting. None of the three 

counties had their expenditures or budgets reduced due to the grant funding. It is also important to 

note that Lewis County reported that, without the CARES funding, they would not have been able 

to successfully conduct the 2020 Federal Election. In all three cases, the narrative these counties 

provided indicates that the use of these funds absolutely was to “prevent, prepare for, and respond 

to coronavirus, domestically or internationally, for the 2020 Federal election cycle.” 

The audit indicates that identified expenditures the county had “planned the purchases of the 

equipment prior to the onset of the pandemic”. However, we also must not forget that prior to the 

pandemic, every state and local government had plans that were swiftly moved aside in favor of 

the previously unknown and often unpredictable expenditures necessary to maintain and execute 

the critical business functions. While we appreciate the quick work to pass the Coronavirus Aid, 

Relief and Economic Security Act that provided additional funding for our County Auditors in 

7 
 

 

 

 

April 2020, by that time the state and local government had already reallocated their local funding 

and adjusted their plans for their annual budget in response to the pandemic. To hold them to their 

pre-pandemic plans without consideration of the broader context is not a reasonable finding in our 

opinion. 

Auditor’s Response: 

While the items purchases were beneficial to the conduct of the 2020 elections, the evidence 

provided indicated that the three counties had already made plans to purchase the items with local 

funding prior to the availability of federal funds. 

Finding No. 2 – Financial Reporting of Program Income 

The Federal Financial Report (FFR) for the fiscal year ended September 30, 2020 for the Election 

Security grants reported $303,369 of cumulative program income earned. However, the amount 

supported by the underlying accounting records was $262,865, a difference of $40,504 which is 

equal to the amount of program income earned and reported on the September 30, 2018 FFR for 

the Election Security grants. 

The terms and conditions of the Election Security grant awards require the submission of an 

accurate and complete Federal Form 425 (Federal Financial Report) which reflect the uses of 

award funds and the interest and program income generated from those funds. HAVA Title IX, 

Section 902. AUDITS AND REPAYMENT OF FUNDS, Part (a) – Recordkeeping Requirement 

states, “Each recipient of a grant or other payment made under this Act shall keep such records 

with respect to the payment as are consistent with sound accounting principles, including records 

which fully disclose the amount and disposition by such recipient of funds, the total cost of the 

project or undertaking for which such funds are used, and the amount of that portion of the cost of 

the project or undertaking supplied by other sources, and such other records as will facilitate an 

effective audit.” 

HAVA grant activity may not be accurately reported or accounted for which may increase the 

potential of misuse of federal funds. 

Recommendation 

We recommend that the EAC work with the Office to: 

3. Determine the proper amounts of program income to be reported on the Election Security 

grant FFR’s through September 30, 2020 and revise this FFR and any subsequent FFR’s 

as necessary. 

4. Implement procedures and training in the FFR reporting process to ensure that all program 

income earned is fully disclosed in the financial reports. 

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Secretary of State’s Response: 

We disagree with the determination that we over reported interest by $40,503.72 (rounded to 

$40,504 in the audit report). A separate spreadsheet named “HAVA Interest.xlsx” we believe was 

provided to the auditor, which is different than the interest spreadsheet used in the calculation of 

post-FFY 2018 interest and noted in the audit report. However, the $303,368.83 reported on the 

FFR noted in the audit, being a cumulative amount, is inclusive of the FFY 2018 interest, and 

therefore we believe it is correct (with the exception being noted below). 

The difference between the two spreadsheets is that FFY 2018 interest was calculated using a more 

accurate method, using the known daily balances between the two comingled funds (Section 251 

and Section 101 security funds). This was made possible by large and easily identifiable single 

expenditures, which made changes in cash balances between funds possible to track to a specific 

expenditure in the state accounting system, which contained the grant information. That changed 

with the addition of more complex expenditures, particularly salaries and benefits of security staff. 

Because of the lack of linkage between the accrual-based state accounting system (Agency 

Financial Reporting System, AFRS) and the cash-based treasury system (Treasury Management 

System, TMS), which is how interest is earned and calculated, it is impossible to attribute specific 

cash changes to expenditures in AFRS. When it became impossible to identify specific 

expenditures in the cash-based system, we switched spreadsheets, which is spreadsheet noted in 

finding #2. 

However, while we believe the amount of $303,368.83 is substantially correct, during the 

investigation process we uncovered a mistake in the interest reported on both the 2018 FFR and 

the 2018 progress report. This was due to a copy/paste error in the interest earned during August 

2018. We reported earning interest in the amount of $10,313.41 on the progress report, an amount 

that also was included in the FFY 2018 FFR, but in reality, only earned $10,304.55, a difference 

of $8.86. That mistake has carried through all subsequent FFR’s to date. 

Auditor’s Response: 

The audit used the spreadsheets “HAVA Interest FFY2019” and “HAVA Interest FFY2020” as 

well as reports of interest earned from the Treasury Management System which were provided by 

the Office during audit fieldwork. The EAC resolution process will determine the correct amounts 

of interest income to be reported on the FFR’s. 

Finding No. 3 – SEFA Reporting 

The Schedule of Expenditures of Federal Awards (SEFA) for the State of Washington reported 

$4,310,991 of expenditures for the year ended June 30, 2019 under Catalog of Federal Domestic 

Assistance (CFDA) 90.401, Help America Vote Act Requirements Payments. That amount 

included $3,546,342 of Election Security Grant expenditures with a correct CFDA of 90.404. The 

SEFA reported $3,908,188 of expenditures for the year ended June 30, 2020 under CFDA 90.401, 

Help America Vote Act Requirements Payments. That amount included $1,369,278 of Election 

Security Grant expenditures with a correct CFDA of 90.404. 

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At the time, the Uniform Guidance at 2 CFR 200.302(b) stated that, “The financial management 

system of each non-Federal entity must provide for the following: (1) Identification, in its 

accounts, of all Federal awards received and expended and the Federal programs under which they 

were received. Federal program and Federal award identification must include, as applicable, the 

CFDA title and number, Federal award identification number and year, name of the Federal 

agency, and name of the pass-through entity, if any.” 1 Chapter 95 of the State Administrative and 

Accounting Manual provides for each state agency to complete a federal disclosure form and 

submit to the Office of Financial Management to facilitate SEFA reporting, which includes 

providing the CFDA number. 

The Election Security Grant funds were reported by the state of Washington using the original 

HAVA funds CFDA and no distinction was made for the Election Security Grant’s differing 

CFDA number. This was due to an error on the part of the Financial Services office in completing 

the annual disclosures to the Office of Financial Management. The Financial Services office has 

made note of the correct CFDA and will ensure proper reporting in future state fiscal years. 

Proper identification of a federal program’s CFDA number increases the likelihood that the entity 

complies with the requirements of that program. 

Recommendation 

5. We recommend that the EAC require the Office implement policies to ensure federal 

awards reported on the federal disclosure form to the OFM are accurate and are properly 

identified by CFDA title and number (now known as Assistance Listings) in compliance 

with Uniform Guidance. 

Secretary of State’s Response: 

We agree that there was an error in the Catalog of Federal Domestic Assistance (CFDA) that was 

used due to an internal issue. Additional quality assurance processes have already been 

implemented to prevent this type of error in the future. Now, staff in the OSOS Financial Services 

Division will review all grant reports from the Election Division prior to submission and vice 

versa. 

Auditor’s Response: 

The proposed corrective actions, if implemented, would be sufficient to resolve the findings. 

1 In 2020, the US Office of Management and Budget finalized changes to the Uniform Guidance, which changed the 

term “CFDA” to “Assistance Listing.” 

10 
 

 

The Office responded on August 29, 2022, and disagreed with the report’s Findings No. 1 and No. 

2 and agreed with Finding No. 3. The EAC responded on August 25, 2022, and stated they will 

work with the Washington Secretary of State to implement and complete appropriate corrective 

action on the findings. 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 July 7, 2021, 

and July 26, 2022. 

McBride, Lock & Associates, LLC 

Kansas City, Missouri 

July 26, 2022 

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APPENDIX A-1 

Response of the 

Washington Secretary of State 

to the Draft Report 
 

 

 

 

 

 

 

 

 

 

 

August 29, 2022 

U.S. Election Assistance Commission 

Inspector General 

Brianna Schletz 

Dear Brianna Schletz, 

The Secretary of State’s Office appreciates the opportunity to review and respond to the Office of the 

Inspector General’s (OIG) performance audit report, “Administration of Payments Received Under the 

Help America Vote Act by the Washington Secretary of State”. 

The performance audit concluded that our office accounted for HAVA funds in accordance with the 

grant requirements, accounted for and controlled purchased assets, and used the funds in a manner 

consistent our office’s submitted plan for the audit period. However, the audit does include three 

findings. 

Finding No. 1 – CARES Act Unallowable Costs – we disagree that the three identified approved 

expenditures are supplanting. None of the three counties had their expenditures or budgets reduced 

due to the grant funding. It is also important to note that Lewis County reported that, without the 

CARES funding, they would not have been able to successfully conduct the 2020 Federal Election. In all 

three cases, the narrative these counties provided indicates that the use of these funds absolutely was 

to “prevent, prepare for, and respond to coronavirus, domestically or internationally, for the 2020 

Federal election cycle.” 

The audit indicates that identified expenditures the county had “planned the purchases of the 

equipment prior to the onset of the pandemic”. However, we also must not forget that prior to the 

pandemic, every state and local government had plans that were swiftly moved aside in favor of the 

previously unknown and often unpredictable expenditures necessary to maintain and execute the 

critical business functions. While we appreciate the quick work to pass the Coronavirus Aid, Relief and 

Economic Security Act that provided additional funding for our County Auditors in April 2020, by that 

time the state and local government had already reallocated their local funding and adjusted their plans 

for their annual budget in response to the pandemic. To hold them to their pre-pandemic plans without 

consideration of the broader context is not a reasonable finding in our opinion. 

Finding No. 2 – Financial Reporting of Program Income - we disagree with the determination that we 

over reported interest by $40,503.72 (rounded to $40,504 in the audit report). A separate spreadsheet 

named “HAVA Interest.xlsx” we believe was provided to the auditor, which is different than the interest 

spreadsheet used in the calculation of post-FFY 2018 interest and noted in the audit report. However, 

the $303,368.83 reported on the FFR noted in the audit, being a cumulative amount, is inclusive of the 

FFY 2018 interest, and therefore we believe it is correct (with the exception being noted below). 

520 Union Avenue SE | PO Box 40229 | Olympia, WA 98504-0229 

Tel: 1-800-448-4881 | sos.wa.gov/elections 
 

 

 

 

The difference between the two spreadsheets is that FFY 2018 interest was calculated using a more 

accurate method, using the known daily balances between the two comingled funds (Section 251 and 

Section 101 security funds). This was made possible by large and easily identifiable single expenditures, 

which made changes in cash balances between funds possible to track to a specific expenditure in the 

state accounting system, which contained the grant information. That changed with the addition of 

more complex expenditures, particularly salaries and benefits of security staff. Because of the lack of 

linkage between the accrual-based state accounting system (Agency Financial Reporting System, AFRS) 

and the cash-based treasury system (Treasury Management System, TMS), which is how interest is 

earned and calculated, it is impossible to attribute specific cash changes to expenditures in AFRS. When 

it became impossible to identify specific expenditures in the cash-based system, we switched 

spreadsheets, which is spreadsheet noted in finding #2. 

However, while we believe the amount of $303,368.83 is substantially correct, during the investigation 

process we uncovered a mistake in the interest reported on both the 2018 FFR and the 2018 progress 

report. This was due to a copy/paste error in the interest earned during August 2018. We reported 

earning interest in the amount of $10,313.41 on the progress report, an amount that also was included 

in the FFY 2018 FFR, but in reality, only earned $10,304.55, a difference of $8.86. That mistake has 

carried through all subsequent FFR’s to date. 

Finding No. 3 – SEFA Reporting – We agree that there was an error in the Catalog of Federal Domestic 

Assistance (CFDA) that was used due to an internal issue. Additional quality assurance processes have 

already been implemented to prevent this type of error in the future. Now, staff in the OSOS Financial 

Services Division will review all grant reports from the Election Division prior to submission and vice 

versa. 

In conclusion, we appreciate the time the United States Election Assistance Commission (EAC) Office of 

the Inspector General staff spent learning about our grant management operation and extensive 

internal controls while performing the performance audit. The Office of the Secretary of State remains 

committed to continuous improvement and will implement and complete any recommendations set by 

the EAC. 

Sincerely, 

Stuart Holmes 

Acting Election Director 

Office of the Secretary of State 

520 Union Ave 

Olympia WA 98501 

(360) 725-5794 

stuart.holmes@sos.wa.gov 

520 Union Avenue SE | PO Box 40229 | Olympia, WA 98504-0229 

Tel: 1-800-448-4881 | sos.wa.gov/elections 
APPENDIX A-2 

Response of the 

U.S. Election Assistance Commission 

to the Draft Report 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. ELECTION ASSISTANCE COMMISSION 

633 3rd Street, NW. Suite 200 

Washington, DC 20001 

TO: Brianna Schletz, Inspector General 

FROM: Kinza Ghaznavi, Grants Director 

DATE: August 25, 2022 

RE: Response to Draft Audit Report of Grants Awarded to the Washington 

Secretary of State 

This is the EAC’s response to the OIG draft audit of HAVA funds awarded to the 

Washington Secretary of State (Office) and serves as the EAC’s management decision. 

The scope of the audit included HAVA Sections 251, 101 Election Security and 101 

CARES grants. The EAC generally agrees with the recommendations and describes our 

management decisions related to each one below. 

Finding and Recommendations #1 and #2, Unallowable CARES Act Costs: The 

auditors questioned $190,363 ($158,635 federal and $31,728 match) in costs expended by 

three counties as unallowable because they viewed the purchases as supplanting state and 

local funds. The purchases were approved prior to the receipt of the CARES funds, thus 

using federal funds instead of the state funds already approved for the purchase. The 

auditors recommend that the EAC require the Office to: 

1. Transfer $158,635 into the election fund for the unallowable expenditures noted. 

2. Implement procedures and training to ensure that supplanting of state and local funds 

with federal funds does not occur. 

Management Decision: The EAC considers the costs unallowable because they 

were expenditures not directly related to the pandemic. The purchases were planned 

prior to the March 2022 pandemic declaration and, therefore, were not in response to 

the pandemic. The funds will be returned or other allowable costs can be found. The 

EAC determines supplanting occurs when a state or local government reduces state or 

local funds for an activity specifically because federal funds are available or expected 

to be available to fund that same activity. States have the flexibility to use federal 

funds as needed for planned activities but cannot decrease overall funding as a result 

of federal support. This can include cases in which state or local funds planned for 

one activity are needed to cover other costs. The Office has confirmed that funding 

did not decrease as a result of the CARES funding the counties received. To address 

Recommendation #2, the EAC Grants staff will review the Office’s planned actions 

and determine if they have sufficient systems in place to ensure supplanting does not 

occur. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finding #2 and Recommendations #3 and #4, Financial Reporting of Program 

Income and Federal Expenditures: The auditors found that interest earned on the 

federal funds, as reported in the program income section of the FFR, was not accurately 

reported. The auditors recommend that the EAC require the Office to: 

3. Determine the proper amounts of interest earned and expended to be reported on the 

Election Security grant FFR’s through September 30, 2020 and revise this FFR and 

any 

subsequent FFR’s as necessary. 

4. Implement procedures and training in the FFR reporting process to ensure that all 

program income earned and expenditures incurred are fully disclosed in the financial 

reports. 

Management Decision: The Office reviewed the auditor’s working papers and 

compared their calculations to state accounting records. They determined the 2018 

interest was not counted twice and the audit working papers may have calculated 

cumulative interest earned based on State Treasury initial calculations that had not 

been adjusted for expenditures between the 101 and 251 grants. The Office has 

provided its calculations for interest earned and allocated to the EAC Grants office. 

The EAC Grants staff will review both the audit working papers and the state 

calculations to determine if interest was reported accurately. We anticipate 

completing that process by October 31, 2022. 

Finding #3 and Recommendation #5, SEFA Reporting: The auditors found the 

Election Security grant was reported under Assistance Listing #90.401 instead of under 

the correct number, 90.404. The auditors recommend that the EAC require the Office to 

implement policies to ensure federal awards reported on the federal disclosure form to the 

OFM are accurate and are properly identified by CFDA title and number (now known as 

Assistance Listings) in compliance with Uniform Guidance. 

Management Decision: The Office has corrected the number going forward and is 

implementing a new grants management system that will associate various 

components with the Assistance Listing number. Full implementation of the system 

is expected by early December 2022. 

The EAC expects to review the actions and documentation provided by the state by 

December 31, 2022. 

2 
 

 

Appendix B 

AUDIT SCOPE AND 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. 

As part of our audit, we gained an overall understanding of the internal control environment at the 

Office. Based on this understanding, we identified certain internal controls that we considered to 

be significant (or key controls) to achieving each objective. All components of internal control are 

relevant, but not all may be significant. Significance is defined as the relative importance of a 

matter within the context in which it is being considered, and is a matter of professional judgment. 

We made the following determination as to the significance of the underlying internal control 

principles: 

16 
 

 

Objective 

1 2 3 

Control Environment 

1 Demonstrates Commitment to integrity and ethical values No No No 

2 Exercises oversight responsibility No No No 

3 Establishes structure, authority, and responsibility No No No 

4 Demonstrates commitment to competence No No No 

5 Enforces accountability. No No No 

Risk Assessment 

6 Specifies suitable objectives No No No 

7 Identifies and analyzes risk No No No 

8 Assesses fraud risk No No No 

9 Identifies and analyzes significant change No No No 

Control Activities 

10 Selects and develops control activities Yes Yes Yes 

11 Selects and develops general controls over technology Yes Yes Yes 

12 Deploys through policies and procedures Yes Yes Yes 

Information and Communication 

13 Uses relevant information Yes No No 

14 Communicates internally Yes No No 

15 Communicates externally Yes Yes No 

Monitoring 

16 Conducts ongoing and/or separate evaluations No No No 

17 Evaluates and communicates deficiencies No No No 

The significance was determined as follows: 

Objective 1: Control Activities and its underlying principles were deemed to be significant to our 

determination of the awardee’s compliance with the objective. The Control Activities component 

includes the design and implementation of specific tasks performed by individuals within the entity 

to fulfill their duties and responsibilities and to respond to identified risks. These principles address 

the design and implementation of activities related to management review, segregation of duties 

(including restriction of access with the information system), and documentation of internal 

controls and transactions. We determined these principles to be the most significant to the state’s 

proper use of funds and compliance with award requirements. 

The Information and Communication principles of Use Relevant Information, Communicate 

Internally and Communicate Externally were deemed to be significant to our determination of the 

awardee’s compliance with the federal financial reporting portion of this objective. These 

principles address the relevance of the information, the internal communication processes used to 

compile the data necessary to meet the state’s reporting objectives and the external communication 

processes used to inform the counties about grant requirements. 

17 
 

 

 

 

 

 

 

 

Objective 2: Control Activities and its underlying principles were deemed to be significant to our 

determination of the awardee’s compliance with the objective. The Control Activities component 

includes the design and implementation of specific tasks performed by individuals within the entity 

to fulfill their duties and responsibilities and to respond to identified risks. These principles address 

the design and implementation of activities related to management review, segregation of duties 

(including restriction of access with the information system), and documentation of internal 

controls and transactions. We determined these principles to be the most significant to the state’s 

proper accounting and control over equipment purchased with HAVA funds. 

The Information and Communication principle of Communicate Externally was deemed to be 

significant to our determination of the awardee’s compliance with the objective because the state 

communicated with and relied on information from the counties where the equipment is located as 

part of the control system for accounting and controlling equipment purchased with HAVA funds. 

Objective 3: Control Activities and its underlying principles were deemed to be significant to our 

determination of the awardee’s compliance with the objective. The Control Activities component 

includes the design and implementation of specific tasks performed by individuals within the entity 

to fulfill their duties and responsibilities and to respond to identified risks. These principles address 

the design and implementation of activities related to management review, segregation of duties 

(including restriction of access with the information system), and documentation of internal 

controls and transactions. We determined these principles to be the most significant to the state’s 

use of funds in a manner consistent with the plans provided to EAC. 

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. 

• Tested major purchases and the supporting documentation. 

• Tested randomly sampled payments made with HAVA funds. 

• 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 using funds in a manner 

consistent with the budget plan provided to EAC. 

• Verified the establishment and maintenance of an election fund. 

• Observed the physical security/safeguards of selected equipment purchased with HAVA 

funds and ensure compliance with federal regulation. 

• Verified whether the matching requirement was met and, if so, that matching expenditures 

met the prescribed criteria and allowability requirements of HAVA. 

• Verified program income and interest income was properly accounted for and not remitted 

to the State’s general fund. 

18 
 

 

Program Categories 

Voter 

Voting Election Registration Cyber 

Budget Categories 

Personnel (Including Fringe) 

E

$ 

quipment 

-

Auditing 

$ 99,159 

S

$ 

ystems 

99,159 

Security 

$ 99,159 

Comm

$ 

unications 

- $ 

Other 

753,365 $ 

Total 

1,050,842 

Equipment - - - 2,429,411 - - 2,429,411 

Subgrants 284,581 - - 180,415 1,831 - 466,827 

Training - 3,449 - 73,266 - 239,961 316,676 

All Other Costs - - - 1,898,737 - 1,369 

$ 

1,900,106 

Total Direct Costs $ 284,581 $102,608 $ 99,159 $ 4,680,988 $ 1,831 $ 994,695 6,163,862 

Indirect Costs (if applied) 

Total Federal Expenditures 

 

$ 

-

284,581 

 -

$102,608 

 

$ 

-

99,159 

 -

$ 4,680,988 

 

$ 

-

1,831 

 

$ 

-

994,695 

 

$ 

-

6,163,862 

Non-Federal Match 81,309 - - 51,547 523 9,900 

$ 

143,279 

Total Program Expenditures $ 365,890 $102,608 $ 99,159 $ 4,732,535 $ 2,354 $ 1,004,595 6,307,141 

Appendix C-1 

ELECTION SECURITY EXPENDITURES BY BUDGET CATEGORY AND PROGRAM CATEGORY 

MAY 13, 2018 TO SEPTEMBER 30, 2020 

19 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subgrant Spending By Program Categories 

Election Registration Cyber 

County Equipment Auditing Systems Security Communications Other Total 

ADAMS $ - $ - $ - $ 984 $ - $ - $ 984 

ASOTIN 24,313 - - - - - 24,313 

BENTON 59,366 - - 1,594 - - 60,960 

CHELAN - - - 4,293 - - 4,293 

COLUMBIA 9,422 - - 457 - - 9,879 

DOUGLAS - - - 35,864 - - 35,864 

FERRY - - - 16,892 - 9,551 26,443 

FRANKLIN - - - 2,795 - 3,330 6,125 

GARFIELD - - - 14,260 - - 14,260 

GRANT - - - 1,684 - - 1,684 

JEFFERSON 424 - - - - - 424 

KITTITAS - - - 1,027 - - 1,027 

LEWIS - - - 15,334 - - 15,334 

LINCOLN - - - 3,284 - - 3,284 

MASON - - - 7,046 - - 7,046 

OKANOGAN 25,297 - - - - - 25,297 

PACIFIC - - - 8,806 1,704 - 10,510 

PEND OREILLE - - - 8 - 676 684 

PIERCE - - - 108,217 - - 108,217 

SAN JUAN 5,902 - - 3,022 - - 8,924 

SKAGIT - - - 45,328 127 - 45,455 

THURSTON - - - 37,822 - - 37,822 

WAHKIAKUM - - - 1,747 - - 1,747 

WALLA WALLA - - - 3,926 - - 3,926 

WHATCOM - - - 10,018 - - 10,018 

WHITMAN - - - 2,307 - - 2,307 

Total Direct Costs $ 124,724 $ - $ - $ 326,715 $ 1,831 $ 13,557 $ 466,827 

Indirect Costs (if applied) - - - - - - -

Total Federal Expenditures $ 124,724 $ - $ - $ 326,715 $ 1,831 $ 13,557 $ 466,827 

20 
 

 

Appendix C-2 

SECTION 251 EXPENDITURES BY SPENDING CATEGORY 

OCTOBER 1, 2018 TO SEPTEMBER 30, 2020 

Section 251 

Spending Category Funds 

Voter Registration System 3,283,127 

Total Direct Costs $ 3,283,127 

Total Program Expenditures $ 3,283,127 

21 
 

 

 

 

Appendix C-3 

CARES ACT EXPENDITURES BY COST CATEGORY 

APRIL 16, 2020 TO DECEMBER 31, 2020 

Expenditure Type 

Cost Categories Federal Match Total 

Voting Processes $ 3,258,778 $ 610,279 $ 3,869,057 

Staffing 339,786 59,683 399,469 

Security and Training 446,598 83,995 530,593 

Communications 205,965 117,014 322,979 

Supplies 1,374,966 267,733 1,642,699 

Total CARES Expenditures $ 5,626,093 $1,138,704 $ 6,764,797 

22 
Appendix D 

MONETARY IMPACT AS OF SEPTEMBER 30, 2020 FOR ELECTION 

SECURITY AND SECTION 251 REISSUED GRANTS AND AS OF 

DECEMBER 31, 2020 FOR CARES ACT GRANT 

Additional 

Questioned Unsupported Funds for 

Description Costs Costs Program 

CARES $ 158,635 $ - $ -

Total $ 158,635 $ - $ -

23 
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