October 20,2011 

BACKGROUND 

EAC MANAGEMENT DECISION: 

Resolution of the OIG Audit Report on the Administration of 

Payments Received Under the Help America Vote Act by the 

Arizona Secretary of State for the Period April 28, 2003 

Through January 31, 2011 Report No. E-HP-AZ-04-11 

The EAC is an independent, bipartisan agency created by the Help America Vote Act of 

2002 (HA V A). EAC assists and guides state and local election officials in improving the 

administration of elections for Federal office. EAC distributes HA V A funds to States for 

the acquisition of voting systems, and supports the establishment of statewide voter 

registration lists, and other activities to improve the administration of elections for 

Federal office. EAC monitors State use ofHAVA funds to ensure funds distributed are 

being used for authorized purposes. To help fulfill this responsibility, the EAC 

determines the necessary corrective actions to resolve issues identified during Single 

Audit Act and Department of Inspector General (OIG) audits of state administration of 

HA V A funds. The EAC OIG has established a regular audit program to review the use 

ofHAVA funds by States. The OIG's audit plan and audit reports can be found at 

www.eac.gov. 

The EAC Audit Follow-up Policy authorizes the EAC Executive Director to issue the 

management decision for OIG audits of Federal funds to state and local governments, to 

non-profit and for-profit organizations, and for single audits conducted by state auditors 

and independent public accountants (external audits). The Executive Director has 

delegated the evaluation of final audit reports provided by the OIG and single audit 

reports to the Director of the HAVA Grants Division ofEAC. The Division provides a 

recommended course of action to the Executive Director for resolving questioned costs, 

administrative deficiencies, and other issues identified during an audit. The EAC 

Executive Director issues the EAC Management Decision that addresses the findings of 

the audit and details corrective measures to be taken by the State. 

States may appeal the EAC management decisions. The EAC Commissioners serve as 

the appeal authority. A State has 30 days to appeal the EAC management decision. All 

appeals must be made in writing to the Chair of the Commission. The Commission will 

render a decision on the appeal no later than 60 days following receipt of the appeal or, in 

the case where additional information is needed and requested, 60 days from the date that 

the information is received from the State. The appeal decision is final and binding. 

Please note, with two vacancies the Commission presently lacks a quorum to conduct 

appeals. The 30 day period to file an appeal remains in place. However, the 60 day 

period for a decision will toll until a Commission quorum is reestablished. 

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AUDIT HISTORY 

The orG issued an audit report on the administration of payments received under the 

Help America Vote Act (HA V A) by the Arizona Secretary of State (SOS) on August 22, 

2011. Except for the questionable use of HA V A funds for promotional activities, the 

lack of personnel certifications and the maintenance of adequate property records, the 

audit concluded that the SOS generally accounted for and expended HA V A funds in 

accordance with requirements mentioned for the period from April 28, 2003 through 

January 31, 2011. 

Finding 1 - Unallowable Expenses 

The State of Arizona Office of the Secretary of State (SOS) used Section 251 Help 

America Vote Act (HA V A) funds totaling $20,000 that may not be allowable since the 

program was not related to direct voter education. HA V A requires that funds be used for 

educating voters. The SOS used funds for the Kids Voting Arizona (KV A) program. 

The payment included $8,000 for the High School Civics Connection Program, $7,000 

for the Tribal Election Connection Program and $5,000 for the Destination Democracy 

After School Program. The purpose of the program was to inform school age children 

about the voting process and to increase voter turnout since the parents would be 

involved in assisting the children with the program. 

Recommendation: 

1. The auditors recommended that EAC work with the SOS to decide whether to 

allow or disallow the costs associated with the KV A program. 

SOS Response: 

The SOS disagreed with the finding that providing funds to Kids Voting Arizona would 

fall outside the scope of voter education. The SOS believes that all three programs were 

targeted to high school students, ages 16 to 18, who would be eligible to vote in the next 

general election. The SOS also believes that the programs were in line with the intent of 

HAVA Section 295, the National Student and Parent Mock Elections Section, the goals 

of which were to educate high school age students on the voting process and to also 

encourage participation in elections. 

EAC Response: 

EAC will work with the SOS to gather additional information to decide whether to allow 

or disallow the costs associated with the KV A program. 

Finding 2 - Uncertified Personnel Expenditures 

The SOS did not complete semi-annual certifications for the one full-time employee that 

worked on HA V A activities for the period of April 1, 2004 through March 31, 2007, and 

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EA C has no assurance that the salaries and fringe benefits costs of $147,141 expended 

from the HA V A fund during this period were incurred for work done solely on HA V A 

activities. However, the SOS did obtain the appropriate semi-annual certifications for the 

one full-time employee for the period of April 1, 2007 through the audit period end date 

of January 31, 2011. 

Recommendation:· . 

2. The auditors recommended that EAC work with the SOS to determine the 

appropriate corrective action regarding the lack of periodic payroll certifications. 

SOS Response: 

The SOS acknowledged that the personnel certifications were missing for the period 

April 1, 2004 through March 31, 2007, and assured EAC that the salaries and employee 

related expenses during the period were spent solely for HA V A related work. The SOS 

included retroactive certifications with this response to correct the deficiencies. 

EAC Response: 

While the SOS acknowledges that the semi-annual certification was not completed for the 

period in question, the job description for the position indicates that this was a full-time 

HA V A resource. The SOS has assured EAC that the salaries and employee-related 

expenses spent from the HAVA fund during this period were solely incurred for HAVArelated work. Additionally, the SOS has established a bi-weekly certification policy 

which exceeds the semi-annual certification requirement. EAC has reviewed the form 

currently being used by the SOS to certify hours worked. EAC is satisfied with the 

current policy and considers this matter closed. 

Finding 3 - Property Records 

The HA V A voting equipment listing received from one of the six counties visited did not 

conform to the requirements of 41 CFR 105-71.132, the Common Rule. The auditors 

identified the following discrepancies: 

• The county's accounting records showed that the county purchased 106 machines, 

and the auditors counted 106 machines on site. However, an Automark TSX 

voting machine could not be located amongst the voting machines because the 

county had not properly tagged all of the equipment. 

• A duplex printer was listed on the inventory records, but in fact was not an asset 

owned by the county. The county's property records erroneously included the 

printer. 

• A Dell personal computer was listed on the inventory records for the county 

recorder's office, but was located at the county elections office. 

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Recommendation: 

3. The auditors recommended that the SOS require the staff of both the county 

elections office and the recorder's office to conduct a physical inventory of all 

HAVA-funded equipment to ensure that the property records reflect the correct 

information. 

SOS Response: 

The SOS concurred with the finding and stated that they were requiring the staff at the 

county to conduct a full physical inventory of all HA V A funded equipment to ensure that 

the property records reflect the correct information. In addition, they are requiring that 

property tags be secured to the proper equipment and cross-referenced to the 

manufacturer's serial numbers. The SOS also stated that a follow-up audit will be 

conducted with the county to ensure compliance. 

EAC Response: 

The SOS conducted an audit of HA V A equipment on August 10, 2011. The follow up 

audit was to verify corrective action was taken. The county provided updated equipment 

inventory lists to the SOS that included serial numbers for each piece of equipment 

purchased using HA V A funds and where the equipment is located. EAC has a follow up 

letter that addresses the property record concerns. EAC considers this matter closed. 

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