OFFICE OF INSPECTOR GENERAL

U.S. Election Assistance Commission

AUDIT OF THE HELP AMERICA VOTE ACT GRANTS 

AWARDED TO THE STATE OF CALIFORNIA

Report No. G22CA0009-23-01

October 4, 2022
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- -

AUDIT OF THE HELP AMERICA VOTE 

HIGHLIGHTS ACT GRANTS AWARDED TO THE STATE

OF CALIFORNIA

Report No. G22CA0009-23-01 October 4, 2022

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 California under the Help America Vote Act

(HAVA), including state matching funds and interest

earned, totaling $216.3 million.

What OIG Found

The OIG found that the California Secretary of State 

Office generally used funds for authorized purposes, 

properly accounted for and controlled property 

purchased, and used funds in a manner consistent 

with the informational plans provided to EAC. The 

audit noted no exceptions related to the SKD 

Knickerbocker contract.

However, the Office did not account for funds in 

accordance with grant requirements and (1) reported

expenditures that were not supported in total by

accounting records; (2) charged $51,012 in salary 

costs that lacked appropriate documentation and did

not provide detail on additional costs until after the

completion of the audit; and (3) did not initially

provide adequate support for services and subaward

costs, with $1.1 million remaining unresolved.

What OIG Recommended

The OIG made eight recommendations to address

the noted deficiencies:

As described in the audit's first finding, there were

variances between California's reported

expenditures and those recorded in the state's 

accounting system for each grant. This limited the 

auditors' ability to conduct a complete analysis. 

The objectives of the audit were to determine 

whether the State of California: 

(1) used funds for authorized purposes in

accordance with Section 101 and 251 of HAVA

and other applicable requirements;

(2) properly accounted for and controlled property

purchased with HAVA payments; and

(3) used funds in a manner consistent with the

informational plans provided to EAC.

California’s contract with SKD Knickerbocker was also

evaluated, in response to Congressional interest.

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

 

 

 

 

 

 

OFFICE OF INSPECTOR GENERAL 

U.S. Election Assistance Commission 

DATE: 

TO: 

FROM: 

SUBJECT: 

October 4, 2022 

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

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

Audit of the Help America Vote Act Grants Awarded to the State of California 

(Report No. G22CA0009-23-01) 

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

State of California. 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. 

Additional information on the SKD Knickerbocker contract can be found in the letter 

transmitted to Congress on February 9, 2022.

Please keep us informed of the actions taken on the report’s eight 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 California Secretary of State 

Prepared for 

The United States Election Assistance Commission (EAC) 

Office of Inspector General 

By 

McBride, Lock & Associates, LLC 

August 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 California Secretary of State 

TABLE OF CONTENTS 

Page 

EXECUTIVE SUMMARY 1 

BACKGROUND 2 

AUDIT OBJECTIVES 4 

SCOPE AND METHODOLOGY 5 

AUDIT RESULTS 7 

APPENDICES: 

Appendix A-1: Response of the California 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: Monetary Impact as of September 30, 2020 for Election Security, Section 

101 Reissued 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 California 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 

California 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 October 15, 2018 through September 30, 2020; 

Section 251 Reissued administration from inception on October 1, 2017 through September 30, 

2020; Section 101 Reissued administration from inception on October 1, 2018 through September 

30, 2020; CARES Act administration from inception on July 15, 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, we concluded that the Office generally used funds for 

authorized purposes, properly accounted for and controlled property purchased, and used the funds 

in a manner consistent with informational plans submitted during the audit period. However, the 

Office did not account for the Grant funds in accordance with Grant requirements. The exceptions 

to applicable compliance requirements are described as follows: 

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1. Federal expenditures reported on the Federal Financial Reports (FFRs) was not supported

in total by the accounting records provided by the Office.

2. Ten of the 16 charges for salary costs selected for testing ($51,012) were determined to

lack appropriate documentation. Documentation provided did not assure that charges were

accurate, allowable, and properly allocated. For the 16 charges, six of the employee time

sheets provided did not have all appropriate signatures, four of the charges did not

recalculate to the employee’s approved pay rates, and three of the charges had

discrepancies between the payroll register and the time sheet.

An additional sample of wages in the amount of $180,350 was selected for additional

substantive testing. Initial detail provided by the Office for those charges had an

unexplained variance. After fieldwork, we were provided with documentation to explain

the variance, but we were not able to perform further audit procedures on the sample. The

$180,350 was determined to be wages charged to the grant for both July and August. The

original documentation provided was only for August.

3. During fieldwork, the Office did not provide adequate documentation to support two of the

26 contractual service transactions sampled. For the two transactions, the contract detailed

that billing was to be based on hourly rates, but the invoice does not include timesheets to

support the dollar amounts billed to the Office. The total of the two unsupported

transactions was $177,124. After fieldwork was completed, the Office provided

documentation to support the two contractual service exceptions.

For one of twelve subaward transactions sampled, the Office reimbursed the County based

on a typewritten statement with no further price support for three amounts totaling

$1,284,611. After fieldwork was completed, the Office provided documentation to support

two of the three exceptions, leaving a remaining unsupported amount of $1,081,220. The

$1,081,220 was related to payroll charges reimbursed to one of the counties. The support

provided was password protected and as of the date of the report, the password has not

been provided.

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: 

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• 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, Section 101 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).

• 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 California Secretary of State 

The HAVA funds were awarded to the California Secretary of State’s Office. The Secretary of 

State's office comprises nearly 500 people who are dedicated to making government more 

transparent and accessible in the areas of elections, business, political campaigning, legislative 

advocacy, and historical records. 

The Elections Division oversees all federal and state elections within California. In every statewide 

election, California prepares voter information pamphlets in 10 languages for over 20 million 

registered voters. As the chief elections officer for the largest state in the nation, the California 

Secretary of State tests and approves all voting equipment for security, accuracy, reliability and 

accessibility in order to ensure that every vote is counted as it was cast. The Secretary also ensures 

election laws and campaign disclosure requirements are enforced, maintains a statewide database 

of all registered voters, certifies the official lists of candidates for elections, tracks and certifies 

ballot initiatives, compiles election returns and certifies election results, educates California 

citizens about their voting rights, and promotes voter registration and participation. 

Help America Vote Act State of California State Plans 

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

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Election Security 2018 and 2020 

The objective of the 2018 project funded by HAVA, as set forth in the budget letter, were to 

provide county support for cyber security risks and the associated infrastructure needs, county 

support for polling place accessibility and election administration improvements, county support 

for vote center implementation, county support for cyber security, security enhancements, cyber 

security training, election auditing, and personnel costs. 

The objective of the 2020 project funded by HAVA, as set forth in the budget letter, was to use 

the funds for county and state support for technical and security enhancements, security training, 

infrastructure needs, equipment costs, polling place administration, auditing, and improving the 

administration of elections. 

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, 2017. On that date, the unexpended federal share and 

program income was carried forward and reissued as a new grant. The funds were to be spent in 

accordance with Section 251. 

Section 101 Reissued 

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

Section 101 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 

101. 

CARES Act 

The objective of the 2020 CARES Act project funded by HAVA, as set forth in the budget letter, 

was to use the funds to prevent, prepare for, and respond to coronavirus domestically or 

internationally, for the 2020 Federal election cycle. The funds were to be used throughout the state 

for the additional costs associated with coronavirus including expanding vote by mail, expanding 

early voting in-person opportunities, maximizing curbside access, increasing ballot drop boxes, 

encouraging voters to verify their registration status, encouraging online registration and reregistration, expanding the use of vote by mail tracking, and providing voter assistance while 

maintain social distancing. The costs were to include but were not limited to increases in costs for: 

mailing, printing, postage, staffing, equipment, outreach, connectivity, and facilities. 

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.

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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 

Election Security, Section 251 Reissued, Section 101 Reissued, CARES Act 

We audited the Election Security grant funds received and disbursed by the Office from October 

15, 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, 2017, through September 30, 2020. We audited the Section 101 

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 July 15, 

2020, through December 31, 2020 including matching fund expenditures made after 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 California Secretary of 

State reported Grant Fund receipts as follows: 

Election Section 251 Section 101 CARES 

Description Security Funds Reissued Funds Reissued Funds Act Funds 

Funds Received from EAC $ 73,502,386 $ 48,041,612 $ - $ 36,485,465

State Matching Funds - - - 7,297,093 

Program Income 1,016,738 47,576,265 2,373,469 -

Total Funds $ 74,519,124 $ 95,617,877 $ 2,373,469 $ 43,782,558 

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. 

Based upon the accounting system records provided by the California Secretary of State, total 

expenditures of grant funds during the periods outlined above were $4,631,559, $28,179,799, 

$1,204,220 and $13,892,938 for the Election Security, Section 251 Reissued, Section 101 

Reissued, and CARES Act grants, respectively. As noted in Finding No. 1, the FFR submissions 

were not supported by the accounting records reviewed. Therefore, a complete representation of 

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expenditures incurred or claimed by the Office for these grants cannot be ensured or effectively 

audited. 

The Office’s Election Security, Section 251 Reissued, Section 101 Reissued and CARES Act 

expenditures could not be detailed by project and cost category due to the limitations noted in 

Finding No. 1. 

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 

1 Control 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 

Component 

Activities 

Principle 

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. 

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. 

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SKDK Special Requirement 

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

Commission (EAC) Office of the Inspector General to specifically evaluate the procurement and 

test invoices related to the Office’s contract with SKD Knickerbocker (SKDK) that was the subject 

of a complaint filed by three Members of Congress. 

SKD Knickerbocker submitted 24 invoices between September 30, 2020 and January 20, 2021. 

The total dollar amount of those invoices was $34,687,299 of which $9,921,668 was paid with 

CARES Act funds and $1,945,773 was paid with Election Security funds. McBride, Lock & 

Associates, LLC tested all 24 invoices. In addition to the tests needed to satisfy the overall 

objectives of the audit previously described, the audit tested the invoices from the SKDK contract 

to determine whether the State of California funded any get-out-the-vote (GOTV) activities using 

Federal or State matching funds. 

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. 

Election Security, Section 251 Reissued, Section 101 Reissued, CARES Act 

Based on the audit procedures performed, we concluded that the Office generally used funds for 

authorized purposes, properly accounted for and controlled property purchased, and used the funds 

in a manner consistent with informational plans submitted during the audit period. However, as 

mentioned above, the Office did not account for the Grant funds in accordance with Grant 

requirements. The exceptions to applicable compliance requirements are described below. 

Finding No. 1 – Financial Reporting 

Federal expenditures reported on the Federal Financial Reports (FFRs) was not supported in total 

by the accounting records provided by the Office. Federal expenditures of the Election Security, 

Section 251 reissued, Section 101 reissued and CARES Act grants had the following variances 

between the FFR and the general ledger (GL): 

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Election Section 251 Section 101 

Security Reissued Reissued CARES Act 

Expenditures per FFR $ 5,535,493 $ 39,515,012 $ 477,145 $ 5,070,078 

Expenditures per GL (A) 4,634,960 28,179,799 1,204,220 6,595,845 

Variance $ 900,533 $ 11,335,213 $ (727,075) $ (1,525,767) 

Note (A): Expenditures per accounting records provided by California in December 2021. 

The terms and conditions of the 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.” 

As a result of the Office transitioning from one state accounting system to another during the 

reporting period, the Office used an estimate drawn from the State Controller’s Office report to 

determine the federal expenditure amount. The activities associated with transitioning from one 

accounting to another meant the Office did not close its accounting fiscal year until November 

2021. Per the Office, this caused the reconciliation of each individual grant to not be performed 

prior to submission. The Office is currently taking steps to reconcile the expenditure activity to 

ensure that the reporting is accurate going forward. 

Proper and timely reporting of uses of award funds and the interest and program income generated 

by federal funds ensures that the funds are tracked and spent in accordance with federal regulations. 

The lack of financial accountability and reporting of grant funding causes significant concern with 

the capability of the audit to ensure the review of all expenditures incurred by the State of 

California during the audit period. This circumstance creates concerns with the selection of 

expenditures considered for testing since there is no representation of the Federal expenditures 

claimed by the Office for the period. Given the magnitude of the exceptions of reporting compared 

to the representations made to the audit of costs incurred, no assurance that appropriate 

consideration of all costs incurred by the grants can be made. 

Recommendation 

We recommend that the EAC require the Office: 

1. Perform a reconciliation of the grant activity for the Election Security, Section 251

reissued, Section 101 reissued, and CARES Act funds and ensure that all expenditures are

fully disclosed, and file amended FFRs, as applicable. If the Office determines that it is

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unable to perform the reconciliation of the grant activity, obtain financial services to 

support the completion of the reconciliation. 

2. Implement procedures and training to properly fill out the required Federal Financial

Reports, which reflect the uses of award funds and the interest and program income

generated from those funds for all HAVA grants.

Secretary of State’s Response: 

Finding #1 identified that federal expenditures reported on the Federal Financial Reports (FFRs) 

were not supported in total by the accounting records provided by the SOS. The finding indicated 

that Federal expenditures of the Election Security, Section 251 reissued, Section 101 reissued and 

CARES Act grants had variances between the FFR and the General Ledger (GL). 

The SOS began transitioning from a legacy statewide accounting system (CalSTARS) to a new 

mandated statewide system (FI$Cal) in 2018. The FI$Cal system modernized how the state of 

California manages its finances and is one of the largest and most dynamic IT and business 

transformation undertakings in California's history. 

During this transition, the SOS used both CalSTARS and FI$Cal simultaneously as the book of 

record and after FI$Cal full implementation, the new system became the book of record. However, 

entering all the prior transactions into the FI$Cal system caused a temporary delay in the 

reconciliation process and producing the year-end financial statements by the following: 

• FY2018 Financials were closed and submitted in September 2020

• FY2019 Financials were closed and submitted in May 2021

• FY2020 Financials were closed and submitted in November 2021

Reconciliation of Election Security Funds, CARES Act, Section 251 Reissued, and Section 101 

Reissued are now complete, and the SOS is able to report that the: 

• Election Security and CARES Act funds are fully reconciled between the current FFR and

GL

• Section 101 Reissued has a non-material variance

• Section 251 Reissued has a non-material variance

As of March 31, 2022, the California SOS has submitted to the EAC complete, accurate, and fully 

reconciled FFRs of the CARES Act and Election Security Grant expenditures. 

Regarding Section 251 Reissued and Section 101 Reissued funds, the SOS is currently taking the 

appropriate measures to fully provide the EAC Elections Grants Management team with a full 

accounting of the funds by September 30, 2022. 

Also, the SOS is taking the necessary steps to fully implement the Auditor's recommendations to 

ensure Section 251 Reissued and Section 101 Reissued funds comply with the terms and conditions 

of the Federal Form 425. This includes the review and revision of policies and procedures as it 

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relates to the day-to-day transaction level and the monthly reconciliation process. This should 

provide the EAC with confidence the SOS is ensuring that accountability is a central tenant being 

promoted enterprise wide. The SOS will continue with its due-diligence and ensure all future FFRs 

are accurate, fully represent expenditures, and comply with the relevant section(s) of the HAVA 

Recordkeeping Requirements. 

Auditor’s Response: 

The resolution process should ensure that the revised FFRs are accurate and in agreement with the 

records from the Office’s accounting system and that procedures have been implemented to ensure 

accurate financial reports going forward. 

Finding No. 2 – Payroll Documentation 

Ten of the 16 charges for salary costs selected for testing ($51,012) were determined to lack 

appropriate documentation. Documentation provided did not assure that charges were accurate, 

allowable, and properly allocated. For the 16 charges, six of the employee time sheets provided 

did not have all appropriate signatures, four of the charges did not recalculate to the employee’s 

approved pay rates, and three of the charges had discrepancies between the payroll register and the 

time sheet. 

An additional sample of wages in the amount of $180,350 was selected for additional substantive 

testing. Initial detail provided by the Office for those charges had an unexplained variance. After 

fieldwork, we were provided with documentation to explain the variance, but we were not able to 

perform further audit procedures on the sample. The $180,350 was determined to be wages charged 

to the grant for both July and August. The original documentation provided was only for August. 

The Uniform Guidance at 2 CFR 200.430(i)(1) states that, “Charges to Federal awards for salaries 

and wages must be based on records that accurately reflect the work performed. These records 

must: (i) Be supported by a system of internal control which provides reasonable assurance that 

the charges are accurate, allowable, and properly allocated; (v) Comply with the established 

accounting policies and practices of the non-Federal entity.” The Office’s Secretary of State Help 

America Vote Act (HAVA) Desk Manual requires “individuals will log time as appropriate to 

HAVA, the supervisors will review and approve/disapprove as appropriate, and the Deputy 

Secretary, HAVA Activities will review and approve/disapprove as appropriate.” 

In response to the ten charges, the Office stated that the time keeping system only allows approvals 

for up to three days after the close of the pay period, and if the approvals are not made during that 

time, then the system will not allow the Office to make the approval. A cause has not been provided 

for the difference between the time sheet and the payroll register nor the difference between the 

calculated salary and the approved salary. 

During fieldwork, the Office stated that due to how the charges to the grant were recorded in the 

financial system, a reconciliation to the $180,350 was not possible. However, after fieldwork a 

reconciliation was provided. 

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Proper documentation of payroll ensures that charges to the grant are accurate, allowable, and 

properly allocated. 

Recommendation 

We recommend that the EAC require the Office: 

3. Transfer into the election fund $51,012 and any related fringe benefits and indirect costs

for the unsupported payroll costs cited above.

4. Implement procedures or provide additional training to ensure that payroll costs are

adequately supported with appropriate signature approvals, pay rates, and timesheets when

being allocated to the HAVA grants.

We recommend that the EAC: 

5. Perform detailed testing on the $180,350 of additional wages selected for substantive

testing to determine what amount, if any, remains unsupported.

Secretary of State’s Response: 

Finding #2 identified charges for salary costs that were determined by the Auditor to lack 

appropriate documentation. Specifically, SOS time sheets sometimes lacked all relevant 

signatures, charges did not recalculate to the employee's approved pay rates, and charges had 

discrepancies between the payroll register and the time sheet. 

The SOS uses an online timesheet system that provides for the electronic tracking and approval of 

employees' time. All HAVA charged time is entered, reviewed, and approved by the employee, 

the employee's supervisor and the SOS HAVA Director. These timesheets have been reviewed and 

hours worked have been confirmed both at the time of creation and subsequently. The missing 

signatures are noted, and the SOS is requesting that all costs associated with the timesheets 

identified as missing signatures be allowed, as the HAVA Director has subsequently given 

assurance that those employees accurately accounted for all work performed on HAVA approved 

activities for the time periods in question. The SOS currently has internal controls in place to 

ensure all time charged to HAVA is accurate, allowable, and properly allocated. Furthermore, to 

ensure strict accountability, the SOS will review policies and procedures to allow two signatures 

in the case of employee separation prior to payroll period ending and allow for backup approvals 

in the case where an approver is out of office and perform periodic internal audits of HAVA 

expenditures. 

With regard to payroll charges, the SOS disagrees that the payroll charges did not recalculate to 

the employee's approved pay rate. Payroll charges did recalculate to the employee's approved 

monthly pay rate when the appropriate hours were used as a basis in the calculation. MLA applied 

an analysis that would not allow for the correct recalculation of the employees pay rate based on 

the differences in the hours noted in the state's accounting system instead of the hours displayed 

in the SOS internal timekeeping system. The internal timekeeping system reflects all hours 

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allowable on a monthly basis, including time off, overtime, etc. whereas the state's accounting 

system only reflects time worked. Accordingly, this SOS deems this to be fully supported, a 

nonissue, with no corrective action required. 

In addition, likewise, the payroll charges do not appear to have discrepancies between the payroll 

register and the time sheet. It appears MLA was again applying the state's accounting system 

record instead of the SOS' internal timekeeping system. All employee hours worked for each 

program are accounted for and the total salary shown. In this manner, the differences between the 

payroll charges and the time sheets are fully reconciled. Accordingly, this should be deemed fully 

supported and the SOS does not anticipate any corrective action required at this time. 

Auditor’s Response: 

The resolution process should determine the allowability of the $51,012 that was deemed by the 

audit to be unsupported and the $180,350 sample that was unable to be tested during the audit. The 

personnel testing was performed with the documentation provided by the Office and the 

discrepancies were provided to the Office for explanation during the audit. 

Finding No. 3 – Unsupported Costs 

During fieldwork, the Office did not provide adequate documentation to support two of the 26 

contractual service transactions sampled. For the two transactions, the contract detailed that billing 

was to be based on hourly rates, but the invoice does not include timesheets to support the dollar 

amounts billed to the Office. The total of the two unsupported transactions was $177,124. After 

fieldwork was completed, the Office provided documentation to support the two contractual 

service exceptions. 

For one of twelve subaward transactions sampled, the Office reimbursed the County based on a 

typewritten statement with no further price support for three amounts totaling $1,284,611. After 

fieldwork was completed, the Office provided documentation to support two of the three 

exceptions, leaving a remaining unsupported amount of $1,081,220. The $1,081,220 was related 

to payroll charges reimbursed to one of the counties. The support provided was password protected 

and as of the date of the report, the password has not been provided. 

The Uniform Guidance at 2 CFR 200.403 states that, “Except where otherwise authorized by 

statute, costs must meet the following general criteria in order to be allowable under Federal 

awards: (g) Be adequately documented.” 

The Office has not provided adequate documentation to support the allowability of expenditures 

charged to the HAVA grant. 

Proper documentation of purchases ensures that expenses charged to Federal awards are allowable, 

allocable and reasonable. 

12 
 

 

 

 

 

 

Recommendation 

6. We recommend that the EAC work with the Office to resolve the one remaining

unsupported County reimbursement.

7. We recommend that the EAC require the Office to transfer into the election fund any

amount which remains unsupported.

8. We recommend that the EAC require the Office to develop and implement policies and

procedures and provide training to ensure adequate documentation is maintained to support

the allowability of expenditures charged to the HAVA grant.

Secretary of State’s Response: 

Finding # 3 identified a documentation deficiency where a contractual reimbursement was made 

to a County related to payroll charges without full payroll documentation. 

The County reimbursement documentation was provided in summary format by the County. As a 

general practice, the SOS does not request payroll documentation as it often contains Personal 

Identifiable Information (PII) and is required to be redacted prior to providing the requested 

support. Furthermore, the information technology system employed at the County demands a great 

deal of time and effort to produce large quantities of data that still require a thoughtful and careful 

review for PII. The SOS has provided MLA with the supporting documentation and asks that this 

expenditure be determined to be fully supported, thus, this finding be deemed a non-issue with no 

corrective action required. 

Auditor’s Response: 

The resolution process should determine the allowability of the remaining unsupported amount. 

As of the date of the report, the password has not been provided to us to allow us to evaluate the 

documentation provided. 

The Office responded on September 6, 2022, and generally agreed with the report’s findings and 

recommendations regarding financial reporting and generally disagreed with the findings 

regarding unsupported costs. The EAC responded on September 6, 2022, and stated they will work 

with the California 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 20, 2021, 

and August 23, 2022. 

13 
SKDK Special Requirement 

Based on the audit procedures performed, we took no exceptions to the Office’s procurement of 

the SKDK contract and did not note any instances in which Federal or State matching funds were 

Kansas City, Missouri 

August 23, 2022 

used for ineligible GOTV or voter registration activities. 

McBride, Lock & Associates, LLC 

14 
 

 

APPENDIX A-1 

Response of the 

California Secretary of State 

to the Draft Report 
SHIRLEY N. WEBER , PH.D. 

CALIFORNIA SECRETARY OF STATE 

September 6, 2022 Via Electronic Transmission 

Ms. Brianna Schletz 

U.S. Election Assistance Commission 

Office ofInspector General 

633 3rd Street, NW, Second Floor 

Washington, DC 2000 I 

Dear Inspector General Schletz: 

The California Secretary ofState's Office has received the U.S. Election Assistance Commission's 

(EAC) Performance Audit Report - Administration ofPayments Received Under the Help America 

Vote Act by the California Secretary of State dated July 2022, prepared by McBride, Lock & 

Associates, LLC (MLA) regarding the Secretary of State's administration of the Help America 

Vote Act of2002 (HA VA) program. The objective ofthe review is to determine whether California 

spent HAVA funds in accordance with the Act and related administrative requirements for HAVA 

Requirement Payments, Election Administration, and Election Security funds from the date of 

award through September 30, 2020. The audit covered funds appropriated under the Coronavirus 

Aid, Relief, and Economic Security Act (CARES Act) and expended through December 31, 2020, 

including eligible expenses paid for with State matching funds. 

The Secretary of State would like to thank MLA for their thoroughness and professionalism 

demonstrated while performing this important oversight function on behalf of the EAC's Office 

oflnspector General (OIG). 

Dr. Shirley N. Weber was sworn in as the California Secretary of State on January 29, 2021 and 

has made "accountability and quality results" primary goals of this administration. Although the 

review period ofthis Audit covers HAVA activities between 2017 through 2020, it is our intent to 

ensure that robust processes and procedures for HAVA activities in California are in place, 

including but not limited to state legislative authority and oversight, all of which have been in 

place for many years. The current Administration is dedicated to resolving any concerns set forth 

in order to comply with HAVA's statutory and administrative requirements and welcomes the 

opportunity to receive any opportunities to further build "due diligence" around these program 

activities. 

Additional Coronavirus Review 

As a part of the review, MLA reviewed expenditures made by the Secretary ofState (SOS) during 

the coronavims global pandemic. Specifically, MLA reviewed expenditures made pursuant to 

1500 11TH STREET, SACRAMENTO, CA 95814, (916) 653-7244 

WWW.SOS.CA.GOV 

-~ .. 
Ms. Brianna Schletz 

September 6, 2022 

Page2 

Elections Code section 1604 and the California Budget Act for 2020-2021, for the SOS' Vote Safe 

California education and outreach effort that helped millions of Californians - voters, election 

officials and their staff -- safely navigate numerous changes to the election process during a global 

pandemic. As you indicated in your February 9, 2022, correspondence: 

After receiving EAC funding authorized to prevent, prepare for, and respond to 

coronavirus for the 2020 Federal election, SOS executed the SKDK contract using state 

regulations for administering contracts during an emergency. The contract was not a sole 

source acquisition. 

Based on sampled testing, the funds spent on the SKDK education campaign were 

allowable, no instances oflobbying were found, and SKDK did not receive inappropriate 

access to voter information. The Vote Safe California messaging was intended to help 

voters understand the vote by mail and registration processes and did not meet the 

definition of a registration drive or Get-Out-the-Vote activity. As a result, we have no 

recommendations related to the SKDK contract for the California Secretary of State 

Office at this time. 

Additionally, as indicated in your July Report: 

Based on the audit procedures performed, we took no exceptions to the Office's 

procurement of the SKDK contract and did not note any instances in which Federal or 

State matching funds were used for ineligible GOTV or voter registration activities. 

The Office of the SOS appreciates the level of scrutiny these expenditures were subjected to and 

will continue to remain diligent on the application ofthese funds. 

Report Findings 

As the July 2022 Report indicates, there are three findings. The findings and the California 

Secretary of State's explanation and response to those findings are detailed below. 

Finding #1- Financial Reporting 

Finding #1 identified that federal expenditures reported on the Federal Financial Reports (FFRs) 

were not supported in total by the accounting records provided by the SOS. The finding indicated 

that Federal expenditures of the Election Security, Section 251 reissued, Section 101 reissued and 

CARES Act grants had variances between the FFR and the General Ledger (GL). 

The SOS began transitioning from a legacy statewide accounting system (CalSTARS) to a new 

mandated statewide system (FI$Cal) in 2018. The FI$Cal system modernized how the state of 

California manages its finances and is one of the largest and most dynamic IT and businesstransformation undertakings in California's history. 
Ms. Brianna Schletz 

September 6, 2022 

Page3 

During this transition, the SOS used both CalSTARS and FI$Cal simultaneously as the book of 

record and after FI$Cal full implementation, the new system became the book ofrecord. 

However, entering all the prior transactions into the FI$Cal system caused a temporary delay in 

the reconciliation process and producing the year-end financial statements by the following: 

• FY2018 Financials were closed and submitted in September 2020 

• FY2019 Financials were closed and submitted in May 2021 

• FY2020 Financials were closed and submitted in November 2021 

Reconciliation ofElection Security Funds, CARES Act, Section 251 Reissued, and Section 101 

Reissued are now complete, and the SOS is able to report that the: 

• Election Security and CARES Act funds are fully reconciled between the current FFR 

andGL 

• Section 101 Reissued has a non-material variance 

• Section 251 Reissued has a non-material variance 

As ofMarch 31, 2022, the California SOS has submitted to the EAC complete, accurate, and fully 

reconciled FFRs of the CARES Act and Election Security Grant expenditures. 

Regarding Section 251 Reissued and Section 101 Reissued funds, the SOS is currently taking the 

appropriate measures to fully provide the EAC Elections Grants Management team with a full 

accounting of the funds by September 30, 2022. 

Also, the SOS is taking the necessary steps to fully implement the Auditor's recommendations to 

ensure Section 251 Reissued and Section 101 Reissued funds comply with the terms and conditions 

of the Federal Form 425. This includes the review and revision of policies and procedures as it 

relates to the day-to-day transaction level and the monthly reconciliation process. This should 

provide the EAC with confidence the SOS is ensuring that accountability is a central tenant being 

promoted enterprise wide. The SOS will continue with its due-diligence and ensure all future FFRs 

are accurate, fully represent expenditures, and comply with the relevant section(s) of the RAVA 

Recordkeeping Requirements. 

Finding #2 - Payroll Documentation 

Finding #2 identified charges for salary costs that were determined by the Auditor to lack 

appropriate documentation. Specifically, SOS time sheets sometimes lacked all relevant 

signatures, charges did not recalculate to the employee's approved pay rates, and charges had 

discrepancies between the payroll register and the time sheet. 

The SOS uses an online timesheet system that provides for the electronic tracking and approval of 

employees' time. All HAVA charged time is entered, reviewed, and approved by the employee, 

the employee's supervisor and the SOS HAVA Director. These timesheets have been reviewed 
 

 

Ms. Brianna Schletz 

September 6, 2022 

Page4 

and hours worked have been confirmed both. at the time ofcreation and subsequently. The missing 

signatures are noted, and the SOS is requesting that all costs associated with the timesheets 

identified as missing signatures be allowed, as the HAVA Director has subsequently given 

assurance that those employees accurately accounted for all work performed on HAVA approved 

activities for the time periods in question. The SOS currently has internal controls in place to 

ensure all time charged to HAVA is accurate, allowable, and properly allocated. Furthermore, to 

ensure strict accountability, the SOS will review policies and procedures to allow two signatures 

in the case of employee separation prior to payroll period ending and allow for backup approvals 

in the case where an approver is out of office and perform periodic internal audits of HAVA

expenditures.

With regard to payroll charges, the SOS disagrees that the payroll charges did not recalculate to 

the employee's approved pay rate. Payroll charges did recalculate to the employee's approved 

monthly pay rate when the appropriate hours were used as a basis in the calculation. MLA applied 

an analysis that would not allow for the correct recalculation of the employees pay rate based on 

the differences in the hours noted in the state's accounting system instead of the hours displayed 

in the SOS internal timekeeping system. The internal timekeeping system reflects all hours 

allowable on a monthly basis, including time off, overtime, etc. whereas the state's accounting 

system only reflects time worked. Accordingly, this SOS deems this to be fully supported, a nonissue, with no corrective action required. 

In addition, likewise, the payroll charges do not appear to have discrepancies between the payroll 

register and the time sheet. It appears MLA was again applying the state's accounting system 

record instead of the SOS' internal timekeeping system. All employee hours worked for each 

program are accounted for and the total salary shown. In this manner, the differences between the 

payroll charges and the time sheets are fully reconciled. Accordingly, this should be deemed fully 

supported and the SOS does not anticipate any corrective action required at this time. 

Finding #3 - Unsupported Costs 

Finding # 3 identified a documentation deficiency where a contractual reimbursement was made 

to a County related to payroll charges without full payroll documentation. 

The County reimbursement documentation was provided in summary format by the County. As a 

general practice, the SOS does not request payroll documentation as it often contains Personal 

Identifiable Information (PII) and is required to be redacted prior to providing the requested 

support. Furthermore, the information technology system employed at the County demands a 

great deal of time and effort to produce large quantities of data that still require a thoughtful and 

carefully review for PII. The SOS has provided MLA with the supporting documentation and 

asks that this expenditure be determined to be fully supported, thus, this finding be deemed a 

non-issue with no corrective action required. 
Ms. Brianna Schletz 

September 6, 2022 

Page 5 

We appreciate the opportunity to review and comment on the draft audit report. Please contact 

Susan Lapsley, Deputy Secretary ofState, Help America Vote Act Director and Counsel, at (916) 

695-1662 ifthere is a need to discuss this response. 
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: September 6, 2022 

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

Office of the Secretary of State 

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

California Office of the Secretary of State (Office) and serves as the EAC’s management 

decision. The scope of the audit included HAVA Sections 251, 101, 101 Election 

Security and 101 CARES grants. The EAC agrees with the recommendations and 

describes our management decisions related to each one below. The auditors also 

conducted a specific evaluation of the procurement contract with SKD Knickerbocker 

(SKDK) that was the subject of a complaint filed with the EAC. The EAC notes that their 

testing of the SKDK contract found no evidence the procurement was inappropriate and 

did not find any instances in which federal or state matching funds were used for 

ineligible “Get Out the Vote” or voter registration activities. 

Finding #1 and Recommendations #1 and #2, Financial Reporting: The auditors 

found that federal expenditures and earned interest as reported on the Federal Financial 

Reports (FFRs) were not supported in total by the accounting records provided by the 

Office. They also found that earned interest per the general ledger did not agree to the 

FFR for the Section 251 reissued funds. The auditors recommend that the EAC require 

the Department to: 

1. Perform a reconciliation of the grant activity for the Election Security, Section 251 

reissued, Section 101 reissued, and CARES Act funds and ensure that all 

expenditures and program income are fully disclosed, and file amended FFRs, as 

applicable. If the Office determines that it is unable to perform the reconciliation of 

the grant activity, obtain financial services to support the completion of the 

reconciliation. 

2. Implement procedures and training to properly fill out the required Federal Financial 

Reports, which reflect the uses of award funds and the interest and program income 

generated from those funds for all HAVA grants. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management Decision: As noted in the audit report, the 2020 FFR was prepared 

from estimates because the Office was transitioning to a new accounting system as 

the fiscal year ended. The Office provided cumulative spreadsheets for the period 

ending 9/30/21 which reconcile the CARES and Election Security grants through that 

date and agree with the FFRs submitted to the EAC. The EAC Grants staff reviewed 

the reconciliation reports and confirmed they are inclusive of previous periods and 

cumulative through 9/30/21. The state is continuing to work on the reconciliation of 

the 251 and 101 grants and expects to complete the process by October 31. If they 

cannot complete the reconciliation, the EAC is recommending the Office obtain 

financial services to support the completion of the reconciliation. Concerning 

Recommendation #2, the EAC also expects to review the Office’s procedures by 

October 31, 2022. 

Finding #2 and Recommendations #3, #4 and #5, Payroll Documentation: The 

auditors found that ten of the sixteen charges for salary costs selected for testing 

($51,012) lacked appropriate documentation. Documentation provided did not assure that 

charges were accurate, allowable, and properly allocated. For the sixteen charges, six of 

the employee time sheets provided did not have all appropriate signatures, four of the 

charges did not recalculate to the employee’s approved pay rates, and three of the charges 

had different hours charged per the payroll register than hours worked per the time sheet. 

An additional sample of wages in the amount of $180,350 was selected for additional 

substantive testing. The detail provided by the Office to support those charges totaled 

$88,937, an unexplained variance of $91,413. The auditors recommended the EAC 

require the Office to: 

3. Transfer into the election fund $231,362 and any related fringe benefits and indirect 

costs for the unsupported payroll costs cited above. 

4. Implement procedures or provide additional training to ensure that payroll costs are 

adequately supported when being allocated to the HAVA grants. 

5. The auditors also recommended that EAC perform detailed testing on the $180,350 of 

additional wages selected for substantive testing to determine what amount, if any, 

remains unsupported. 

Management Decision: The Office provided extensive data related to the 

timekeeping system and the procedures used to calculate payroll amounts to charge to 

the grants. Initial review by EAC Grants staff indicates that, with the exception of the 

approval process, the procedures are appropriate and the amounts charged are 

accurate. Procedures are in place in the on-line system that support amounts allocated 

to HAVA grants. However, the payroll system allocates time both by funding source 

and by specific activity within the funding source that may appear not to be related. In 

addition, the approval process is very time-limited and subject to missed approvals if 

supervisors or the HAVA coordinator are not available within the window for 

approval before the payroll system is closed for the month. We are recommending the 

Office establish exceptions policies and procedures to maintain certification 

exception documentation when all three approvals are not completed within the 

required three-day window. We expect to complete our review of the data provided 

by the state by September 30, 2022 and anticipate many of the costs questioned as 

unsupported will be allowed. 

2 
 

 

 

 

 

 

 

 

Concerning Recommendation #5, based on Grants staff review of the payroll system 

and its functions, we will require the Office to sample an additional 20 payroll 

transactions from fiscal year 2020. We expect that sampling to confirm the exception 

related to the approval process which will be addressed through development of 

exceptions policies. We expect the state to complete that process by November 30, 

2022. 

Finding #3 and Recommendations #6, #7 and #8, Unsupported Costs: The auditors 

found that the Office did not provide adequate documentation to support one of the 26 

contractual service transactions sampled. For one of the sampled subaward transactions, 

the Office reimbursed the County based on a typewritten statement with no further price 

support for one three amount totaling $1,081,220. The auditors recommend that the EAC 

require the Department to: 

6. Resolve the one remaining the one remaining unsupported County reimbursement. 

7. Transfer into the election fund any amount which remains unsupported. 

8. Develop and implement policies and procedures and provide training to ensure 

adequate documentation is maintained to support the allowability of expenditures 

charged to the HAVA grant. 

Management Decision: The Office is working with the County to provide the 

appropriate documentation and expects to complete that process by September 30. 

The EAC will review the supporting documentation and determine amounts that are 

supported after we do so. Concerning Recommendation #8, we will work with the 

Office to review existing policies and procedures and determine if training or updates 

to procedures are needed. 

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

December 31, 2022. 

3 
 

 

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. 

23 
 

 

 

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

principles: 

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 

24 
 

 

 

 

 

 

 

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

processes used to inform the counties about grant requirements. 

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 Office’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. 

25 
• Verified program income and interest income was properly accounted for and not remitted 

to the State’s general fund. 

26 
 

 

 

 

Appendix C 

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 

Payroll Costs $ - $ 231,362 $ -

Unsupported Costs - 1,081,220 -

Total $ - $ 1,312,582 $ -

Note - The lack of adequate financial reporting and expenditure tracking as discussed in Finding 

No. 1 limits the capability of the audit to ensure that a complete analysis of expenditures claimed 

under the grants has been considered. The monetary impact is therefore limited to those items 

made available for audit. 

27 
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