UNITED STATES 

ELECTION ASSISTANCE COMMISSION 

OFFICE OF INSPECTOR GENERAL 

Administration of Payments Received 

Under the Help America Vote Act by 

the Florida Department of State

Report No. E-HP-FL-09-20
 

 

 

 

 

 

 

 

OFFICE OF THE INSPECTOR GENERAL 

US ELECTION ASSISTANCE COMMISSION 

633 3RD STREET, NW, SUITE 200 

WASHINGTON, DC 20001 

Memorandum 

To: Mona Harrington 

Executive Director 

From: Patricia L. Layfield 

Patricia L. Layfield 

Inspector General 

Date: March 26, 2021 

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

Help America Vote Act by the Florida Department of State (Assignment Number EHP-FL-09-20) 

The Office of Inspector General (OIG) engaged McBride, Lock & Associates, LLC (MLA), an 

independent certified public accounting firm, to audit the administration of payments received 

under the Help America Vote Act (HAVA) by the Florida Department of State (FLDOS). The audit 

scope covered the grant funds received and disbursed by the FLDOS, from June 5, 2018, 

through September 30, 2019. The $19.2 million in funds paid to the FLDOS represented 

Florida’s share of the appropriation of $380 million under the Consolidated Appropriations Act 

of 2018 (P.L. 115-151). FLDOS expended approximately $17.3 million of the HAVA funds 

(including state matching funds and program income) during the period covered by the audit. 

Results of Audit 

Based on the audit procedures performed, MLA concluded that, except for the matters 

discussed below, that the Office accounted for HAVA funds in accordance with the requirements 

mentioned above, and used the funds in a manner consistent with the budget plan for the 

period from June 5, 2018 through September 30, 2019. However, MLA noted FLDOS did not 

properly account for property purchased with HAVA payments. The exceptions MLA identified 

are explained below. 

1. The Office did not earn interest on the Election Security grant funds placed in the 

election fund from the date of initial receipt, June 5, 2018, until the date the Office 

Find us here: EAC OIG Website 

Toll free: 1- 866-552-0004 | e-mail: eacoig@eac.gov 
 

 

 

 

 

 

 

 

 

identified the error and made a correction in early March 2019. However, the auditors’ 

evaluation of the response further recommended that EAC verify the calculation of the 

amount that was deposited in March. 

2. Federal expenditures reported on the Federal Financial Reports (FFRs) were not 

supported in total by the documentation the state provided. 

3. Of the 136 equipment items tested, which all had a per unit cost in excess of $1,000, 

none were tracked in the state’s financial system as property. To the extent that these 

items were not recorded in an inventory listing, they were not included as part of the 

annual physical inventory of all property. 

4. The Office’s monitoring of subrecipients did not ensure that property records were 

maintained in compliance with Federal requirements. 

The Office responded on March 22, 2021 and generally agreed with the report’s findings and 

recommendations. The EAC responded on March 25, 2021 and stated they will work with the 

Florida Department of State to implement and complete appropriate corrective action on the 

findings. 

We would appreciate being kept informed of the actions taken on our recommendations as we 

will track the status of their implementation. 

Evaluation of MLA’s Audit Performance 

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

General: 

• Reviewed MLA's approach and planning of the audit; 

• Evaluated the qualifications and independence of the auditors; 

• Monitored the progress of the audit at key points; 

• Reviewed MLA’s audit report and selected work products, to ensure compliance with 

Government Auditing Standards; and 

• Coordinated issuance of the audit report. 

MLA is responsible for the attached auditor’s report and the findings and conclusions 

expressed in the report. The work the EAC OIG performed in evaluating MLA’s conduct of the 

audit was not sufficient to support an opinion on the effectiveness of internal control or 

compliance with laws and regulations, thus EAC OIG does not express any opinion on the 

internal controls or compliance of the FLDOS. 

The Inspector General Act of 1978, as amended, requires semiannual reporting to Congress on 

all reports issued, actions taken to implement recommendations, and recommendations that 

have not been implemented. Therefore, we will report the issuance of this audit report in our 

next semiannual report to Congress. The distribution of this report is not restricted and copies 

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are available for public inspection. Pursuant to the IG Empowerment Act of 2016, the EAC OIG 

will post this audit report on the OIG website within 3 days of its issuance to EAC management. 

The OIG will also post the report to Oversight.gov. 

If you have any questions regarding this report, please call me at (202) 853-2760. 

cc: Commissioner Donald L. Palmer, Chair 

Commissioner Thomas Hicks, Vice-Chair 

Commissioner Christy McCormick 

Commissioner Benjamin W. Hovland 

Maria Matthews, Esq., Director, Division of Elections, Florida Division of Elections 

Attachment 

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McBRIDE, LOCK & ASSOCIATES, LLC

Certified Public Accountants

Established 1980

Performance Audit Report 

Administration of Election Security Payments Received Under the Help 

America Vote Act by the Florida Department of State 

Prepared for 

The United States Election Assistance Commission (EAC) 

Office of Inspector General 

By 

McBride, Lock & Associates, LLC 

March 2021 

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 Election Security Payments Received Under the Help 

America Vote Act by the Florida Department of State 

TABLE OF CONTENTS 

Page 

EXECUTIVE SUMMARY 1 

BACKGROUND 2 

AUDIT OBJECTIVES 3 

SCOPE AND METHODOLOGY 4 

AUDIT RESULTS 5 

APPENDICES: 

Appendix A-1: Response of the Florida Department of State to the 

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

to the Draft Report 

Appendix B: Audit Scope and Methodology 

Appendix C: Expenditures by Budget Category and Program Cat

Appendix D: Monetary Impact as of September 30, 2019 

Draft Report 

ion 

egory 
 

U.S. Election Assistance Commission 

Performance Audit Report 

Administration of Election Security Payments Received Under the Help 

America Vote Act by the Florida Department 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 election 

security funds the Florida Department of State (Office) received between June 5, 2018 and 

September 30, 2019. The objective of the audit was to determine whether the Office used payments 

authorized by Sections 101 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 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 for the period from June 5, 2018 through September 30, 2019. The 

exceptions are as follows: 

1. The Office did not earn interest on the Election Security grant funds placed in the election 

fund from the date of initial receipt, June 5, 2018, until the date the Office identified the 

error and made the correction, March 11, 2019. 

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

in total by the supporting documentation provided by the state. The total federal 

expenditures as reported by the Office for the Election Security grant was $17,240,566. 

1 
The total federal expenditures as documented on the Office’s internal records was 

$17,293,595, which is $53,029 more than what was reported on the FFR as of September 

30, 2019. 

3. Our equipment testing sample included five invoices totaling $751,738 of expenditures. 

Included in the $751,738 were 136 items with a total cost of $507,338. None of the 136 

items, which all had a per unit cost in excess of $1,000 were tracked in the state’s financial 

system as property. To the extent that these items were not recorded in an inventory listing, 

they were not included as part of the annual physical inventory of all property. 

4. The Office’s monitoring of subrecipients did not ensure that property records were 

maintained in compliance with 2 CFR 200. Five out of 67 subrecipients were randomly 

selected for physical observation of equipment. The five subrecipients were the counties 

of Palm Beach, Broward, Lafayette, Duval and Miami-Dade. These five counties 

represented $4,359,798 of the State’s reported expenditures. The property records provided 

from three of the counties (Broward County, Duval County, Miami-Dade County) did not 

include all information required by 2 CFR 200. The property purchased by Lafayette 

County was not being kept on an inventory listing. Palm Beach County had no purchases 

in excess of their capitalization threshold. Forty-one items of equipment purchased with 

$181,787 of Election Security funds was selected for observation. All items were 

determined to exist. 

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

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

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

the corrective actions described therein. 

BACKGROUND 

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

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

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

improvements. The Commission administers grants to States authorized by HAVA under Title I, 

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. 

The 2018 HAVA Election Security Grant also requires that states must: 

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 Provide matching funds equal to 5 percent of the total federal funds within two years of the 

award to be spent for activities for which Election Security Grants are made. 

 Maintain all federal funds and state cash matching funds in the state election fund, as 

described in Section 104 (d) of HAVA, along with interest earned on the award’s funds. 

States may also track eligible funds/activities from their state and local general operating 

budgets to meet the match obligations. State and local funds used for match must be 

different from funds used to meet Maintenance of Effort or state match associated with 

HAVA Requirement Payments. 

The Awardee – The Florida Department of State 

The HAVA funds were awarded to the Florida Department of State. The Florida Department of 

State Division of Elections provides administrative support to the Secretary of State, Florida’s 

Chief Election Officer, to ensure that Florida has fair and accurate elections. The Division consists 

of three bureaus – the Bureau of Election Records, the Bureau of Voter Registration Services, and 

the Bureau of Voting Systems Certification. Through these bureaus and the director’s office, the 

Division ensures compliance with the election laws, provides statewide coordination of election 

administration and promotes public participation in the electoral process. The Division also assists 

county Supervisors of Elections in their duties, including providing technical support. 

Help America Vote Act State of Florida State Plan 

The State of Florida’s HAVA budget narrative was prepared by the Secretary of State. The main 

objectives of the project funded by HAVA, as set forth in the budget letter, are to work in 

partnership with local Supervisors of Elections to deploy the funds as rapidly as possible to 

strengthen the implementation of cybersecurity for election systems; enhance election technology; 

facilitate cybersecurity training for the state Chief Election Official’s office and local election 

officials; implement established cybersecurity best practices for elections systems; continue 

election administration activities including, but not limited to, voter education, poll working 

training, and standardizing elections results reporting. Additionally funds will be used to upgrade 

election-related computer systems to address cyber vulnerabilities and all other election costs 

deemed necessary by the Department of State. 

AUDIT OBJECTIVES 

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

a) Used funds for authorized purposes in accordance with Section 101 of HAVA and other 

applicable requirements; 

b) Properly accounted for and controlled property purchased with HAVA payments; and 

c) Used the funds in a manner consistent with the budget plan provided to EAC. 

3 
 

 

 

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 payments. 

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

in compliance with HAVA. 

SCOPE AND METHODOLOGY 

We audited the Grant funds received and disbursed by the Office from June 5, 2018 through 

September 30, 2019. These funds are related to the appropriation of $380 million under the 

Consolidated Appropriations Act (CAA), 2018 (P.L. 115-151). The scope of activity audited is 

shown in the following table: 

Election 

Description Security Funds 

Funds Received from EAC $ 19,187,003 

State Matching Funds -

Program Income 53,820 

Total Funds $ 19,240,823 

Less Disbursements (17,293,595) 

Fund Balance $ 1,947,228 

The Office’s expenditures detailed by budget and program category are included as Appendix C. 

The Office did not provide a detail of subgrant spending by program category, so that detail is not 

presented. 

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

underlying internal control principles as significant to the audit objective: 

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1 

Objective Component Principle 

Control Activities 

Information and Communication 

2 Control Activities 

Information and Communication 

3 Control Activities 

Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

Uses Relevant Information 

Communicates Internally 

Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

Communicates Externally 

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. 

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 accounted for HAVA funds 

in accordance with the requirements mentioned above, and used the funds in a manner consistent 

with the budget plan for the period from June 5, 2018 through September 30, 2019. However, the 

Office did not properly account for property purchased with HAVA payments. The exceptions to 

applicable compliance requirements are described below. 

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Finding No. 1 – Interest Earned on Election Fund 

The Office did not earn interest on the Election Security grant funds placed in the election fund 

from the date of initial receipt, June 5, 2018, until the date the Office identified the error and made 

the correction, March 11, 2019. 

HAVA Section 254(b)(1) requires that the following monies be deposited into its election fund: 

a) Amounts appropriated or otherwise made available by the State for carrying out the 

activities for which the requirements payment is made to the State under this part. 

b) The requirements payment made to the State under this part. 

c) Such other amounts as may be appropriated under law. 

d) Interest earned on deposits of the fund. 

Election Security grant funds were not earning interest from June 5, 2018 to March 11, 2019. On 

March 11, 2019, the Office identified that interest was not being earned on the Election Security 

grant funds, and the funds were then invested and began earning interest. 

The Office performed an analysis of estimated interest earned on the grant balance from June 5, 

2018 through March 11, 2019. The Office’s estimate of unearned interest was $82,466. However, 

the Office’s analysis did not consider the additional grant funds which would have been in the fund 

from March 12, 2019 through September 30, 2019 had the fund been earning interest since June 

5, 2018. 

Recommendation 

1. We recommend that EAC review the Office’s calculation of lost interest and require the 

Office to deposit to the Election Security grant fund the amount of interest funds lost due 

to the delay in interest being earned. 

Department of State’s Response: 

The Department agrees with the finding and will implement the U.S. EAC recommendations. 

The Department has established procedures for the receipt of federal funds into State Treasury. In 

this instance, those procedures were not followed. Internal review at the Department suggests that 

turnover in budget staff, changes to budget plans, and tight timelines all contributed to 

noncompliance with appropriate procedures in this instance. 

In Florida, once the Department is notified of a federal grant award, the draw-down of federal 

funds should first be preceded by a budget amendment to the Governor’s Office, to include a 

request for “purchase of investment” authority to place the funds in the State Treasury. Once the 

purchase of investment authority is approved, the Department’s Finance and Accounting Office 

requests that the funds be drawn down. Thereafter, the funds are automatically deposited into an 

interest-bearing account specifically dedicated to the individual grant award. 

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Once the award is in hand, a subsequent budget amendment is required to include a request to 

spend the funds and plans for the use of the funds. Once authority to expend is approved either by 

the Governor if the request is for less than $1 million, or if $1 million or over, by the Legislature 

if in session, or the Legislative Budget Committee, if out of session, the funds can be expended. 

The Department’s Finance and Accounting (F&A) completes a “dis-investment” draw down from 

the interest bearing account to the Department’s subaccount for cash on hand in Treasury, which 

usually occurs within 1-2 business days. Once these actions are completed, F&A is able to process 

requests to expend at the state level or at the local level if part of a subgrant program. As set forth 

below, this process was not followed in its entirety. 

On May 30, 2018, the Secretary of State submitted his request to the U.S. EAC for the funds. The 

funds were automatically deposited (or drawn down) on June 6, 2018 into the cash on hand 

account. The budget amendment preceding the Secretary’s request did not include a “purchase of 

investment” as necessary to place the funds into an interest bearing account, once drawn down 

from the U.S. EAC. By the time the federal funds were requested, the Legislature had already 

adjourned its session and the interim Legislative Budget Committee (LBC) was not intending to 

meet until late fall. A revised budgetary amendment plan was prepared nonetheless in the hopes 

that the LBC might convene in time to implement a subgrant program and disburse funds. The 

LBC scheduled a meeting in late July 2018 and approved the revised budgetary plan. The funds 

were then deposited, in error, into a non-interest bearing account, as noted in the applicable finding. 

The Department began to immediately administer funds from the subgrant program for allowable 

expenses to ensure the security of the 2018 Primary Election held on August 28, and the 2018 

General Election held on November 6, 2018. In late January 2019, the Department employees 

identified the error and took immediate action to correct it. A budget amendment was submitted 

to the Governor’s Office on February 19, 2019. After a required 14-day review and consultation 

period, the budget amendment was approved on March 5, 2019. The remaining funds were placed 

in an interest-bearing account on March 7, 2019. 

Based upon our review of the timeline and facts surrounding this error, the Department concluded 

that the compressed timeline, inadequate employee training and oversight, and rapidly changing 

budget plans all contributed to failure to comply with EAC requirements and existing Department 

policy. In addition to correcting this specific error, the Department also worked to improve its 

overall compliance and review system, by adding additional checks and internal audits within the 

financial areas of the Department. 

Auditor’s Response: The Office’s response discusses the cause of the condition. The resolution 

process needs to ensure that a correct calculation of lost interest is made and deposited into the 

election fund. 

Finding No. 2 –Financial Reporting of Federal Expenditures 

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

by the supporting documentation provided by the state. The total federal expenditures as reported 

by the Office for the Election Security grant was $17,240,566. The total federal expenditures as 

documented on the Office’s internal records was $17,293,595, which is $53,029 more than what 

was reported on the FFR as of September 30, 2019. 

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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.” 

The discrepancy was caused by the Office not having a procedure to reconcile the Election Security 

grant activity reported on the FFR to the ending Fund balance per their accounting system. 

Proper reporting of all grant activity ensures that that the funds are tracked and spent in accordance 

with federal regulations. 

Recommendation 

We recommend that the EAC review and resolve the following recommendations that the Office: 

2. Perform a reconciliation of the grant activity for the Election Security funds and ensure 

that all expenditures and program income earned are fully disclosed. 

3. Prepare and submit a revised financial report to the EAC for Election Security funds and 

the prior HAVA fund activities as of September 30, 2019. 

Department of State’s Response: 

The Department agrees with the finding and will take the necessary steps to implement the U.S. 

EAC recommendations. The Department has already taken the steps to modify its past reporting 

methodology to conform with the recent changes in U. S. Election Assistance Commission’s 

HAVA reporting requirements. This includes reporting the balance invested in the interest-bearing 

State Treasury account, reporting the funds drawn down but not yet spent at the reporting end date, 

and reporting all federal expenditures and transactions, such as refunds, that decrease expenditures. 

This change in reporting methodology will more accurately align the balances calculated by the 

Department and the U.S. EAC. 

Auditor’s Response: The resolution process needs to ensure that an accurate revised financial 

report is submitted for Election Security grant funds. 

Finding No. 3 – Property Records and Annual Physical Inventory 

Our equipment testing sample included five invoices totaling $751,738 of expenditures. Included 

in the $751,738 were 136 items with a total cost of $507,338. None of the 136 items, which all had 

a per unit cost in excess of $1,000, were tracked in the state’s financial system as property. To the 

8 
extent that these items were not recorded in an inventory listing, they were not included as part of 

the annual physical inventory of all property. 

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal 

Awards (Uniform Guidance) at 2 CFR 200.313(b) states that, “A state must use, manage and 

dispose of equipment acquired under a Federal award by the state in accordance with state laws 

and procedures.” Rule Chapter 69I-72.002, Florida Administrative Code (FAC) states that, “All 

tangible personal property with a value or cost of $1,000 or more and having a projected useful 

life of one year or more shall be recorded in the state’s financial system as property for inventory 

purposes.” Further, 69I-72.006, FAC states that “Each custodian shall ensure that a complete 

physical inventory of all property is taken at least once each fiscal year.” 

The Office states that these property items should have been tagged when originally invoiced by 

the Information Technology department. However, these property records were not maintained 

and a physical inventory was not performed for the purchase of items in excess of the capitalization 

threshold. The Office is currently working with General Services to appropriately tag all applicable 

items. 

Proper tracking of property purchased with federal funds ensures that equipment is being used and 

disposed of in accordance with federal regulations and state laws and procedures. 

Recommendation 

We recommend that the EAC require the Office to: 

4. Include all items purchased with federal funds on an inventory listing that is compliant 

with state laws and procedures. 

5. Implement policies and procedures to ensure items purchased with federal funds that have 

a value or cost over $1,000 are included in the state’s financial system as property and 

included in an annual physical inventory as required by state laws and procedures. 

Department of State’s Response: 

The Department agrees with the finding and will take the necessary steps to implement the U.S. 

EAC recommendations. The Department has also already initiated steps to identify property 

purchased with HAVA funds that meet the inventory threshold requirement and record the 

property into FLAIR: 

1. Review and identify applicable vouchers (current and archived). 

2. Obtain locations and accurate accounting codes for FLAIR input, 

3. Process FLAIR transactions to add to Property Pending File (this is an overnight process) 

4. Issue tag numbers within the General Services Office 

5. Process FLAIR transactions to transfer property to Property Master File 

Additionally, it has already reviewed and updated its policies and procedures as needed to meet 

the recommendations including the formal designation of property custodians within the 

Department. 

9 
 

 

Auditor’s Response: The proposed corrective actions, if implemented, will be sufficient to 

resolve the finding. 

Finding No. 4 – Subrecipient Monitoring 

The Office’s monitoring of subrecipients did not ensure that property records were maintained in 

compliance with 2 CFR 200. Five out of 67 subrecipients were randomly selected for physical 

observation of equipment. The five subrecipients were the counties of Palm Beach, Broward, 

Lafayette, Duval and Miami-Dade. These five counties represented $4,359,798 of the State’s 

reported expenditures. The property records provided from three of the counties (Broward County, 

Duval County, Miami-Dade County) did not include all information required by 2 CFR 200. The 

property purchased by Lafayette County was not being kept on an inventory listing. Palm Beach 

Countyhad no purchases in excess of their capitalization threshold. Forty-one items of equipment 

purchased with $181,787 of Election Security funds was selected for observation. All items were 

determined to exist. 

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal 

Awards (Uniform Guidance) at 2 CFR 200.331 (d) states that all pass-through entities must: 

“Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for 

authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions 

of the subaward; and that subaward performance goals are achieved.” 2 CFR 200.313(d)(1) 

requires that “property records must be maintained that include a description of the property, a 

serial number or other identification number, the source of funding for the property (including the 

FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal 

participation in the project costs for the Federal award under which the property was acquired, the 

location, use and condition of the property, and any ultimate disposition data including the date of 

disposal and sale price of the property.” 

The Office did not perform activity monitoring sufficient to ensure that subrecipients were 

maintaining property records in compliance with Federal statutes and the terms and conditions of 

the subaward resulting in the following: 

 Broward County’s inventory listing is limited to the item description, serial number, and 

location. 

 Duval County’s inventory listing included item description, serial number and location. 

 Miami-Dade County kept two sets of property records, one included item description, serial 

number and cost of the property, and the other included item description, serial number, 

and location. 

 Lafayette County’s inventory listing did not include any items purchased with the Election 

security grant funds. 

Proper monitoring of subrecipients ensures that equipment purchased with federal funds is being 

used and disposed of in accordance with federal regulations. 

10 
Recommendation 

6. We recommend that the EAC address and resolve the following recommendations that the 

Office implement procedures to ensure that all subrecipients are properly monitored and 

all property purchased with federal funds is placed on a compliant property record. 

Department of State’s Response: 

The Department agrees with the finding and will take the necessary steps to implement the U.S. 

EAC recommendations. 

The Department recently send an email reminder (March 15, 2021) to all 67 county Supervisors 

of Elections to remind them of the continuing requirement under 2 C.F.R. 200.313(d)(1) to 

inventory items purchased with federal funds whose value or cost meet or exceed the applicable 

threshold for inventory. Additionally, the email provided a sample property inventory form that 

could be used to keep track of the required information. The Department has already begun to 

review its current template for subgrant agreements and will involve the Inspector General and the 

General Counsel’s office to ensure that provisions therein are consistent with federal and state 

audit requirements. The Department will be implementing a more robust post-grant monitoring 

effort of subgrant awards to include a random sample of 10% of the subrecipients. 

Auditor’s Response: The proposed corrective actions, if implemented, will be sufficient to 

resolve the finding. 

The Office responded on March 22, 2021 and generally agreed with the report’s findings and 

recommendations. The EAC responded on March 25, 2021 and stated they will work with the 

Florida Department 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 December 13, 

2019 and March 22, 2021. 

McBride, Lock & Associates, LLC 

Kansas City, Missouri 

March 22, 2021 

11 
APPENDIX A-1 

Response of the 

Florida Department of State 

to the Draft Report 
 

 

 

 

 

RON DESANTIS LAUREL M. LEE 

Governor Secretary of State 

March 22, 2021 

(via email as scanned attachment) 

Patricia Layfield, Inspector General 

Office of the Inspector General 

U.S. Election Assistance Commission 

633 3rd Street, NW Suite 200 

Washington, DC 20001 

Dear Inspector Layfield: 

We have reviewed the draft report entitled Performance Audit Report-Administration of 

Payments Received Under the Help America Vote Act by the Florida Department of State, 

dated March 2021. We thank you for the opportunity to provide the Florida 

Department of State (“the Department”) the written responses to findings and 

recommendations made pursuant to the audit conducted on behalf of the U.S. Election 

Assistance Commission. 

EAC Finding No. 1 

Response: The Department agrees with the finding and will implement the U.S. EAC 

recommendations. 

The Department has established procedures for the receipt of federal funds into State 

Treasury. In this instance, those procedures were not followed. Internal review at the 

Department suggests that turnover in budget staff, changes to budget plans, and tight 

timelines all contributed to noncompliance with appropriate procedures in this 

instance. 

In Florida, once the Department is notified of a federal grant award, the draw-down of 

federal funds should first be preceded by a budget amendment to the Governor’s 

Division of Elections 

R.A. Gray Building, Suite 316 • 500 South Bronough Street • Tallahassee, Florida 32399 

850.245.6200 • 850.245.6217 (Fax) • DOS.MyFlorida.com/elections 
 

 

 

 

 

 

FL DOS Response to U.S. EAC Audit 

22 March 2021 

Office, to include a request for “purchase of investment” authority to place the funds in 

the State Treasury. Once the purchase of investment authority is approved, the 

Department’s Finance and Accounting Office requests that the funds be drawn down. 

Thereafter, the funds are automatically deposited into an interest-bearing account 

specifically dedicated to the individual grant award. 

Once the award is in hand, a subsequent budget amendment is required to include a 

request to spend the funds and plans for the use of the funds. Once authority to expend 

is approved either by the Governor if the request is for less than $1 million, or if $1 

million or over, by the Legislature if in session, or the Legislative Budget Committee, if 

out of session, the funds can be expended. The Department’s Finance and Accounting 

(F&A) completes a “dis-investment” draw down from the interest bearing account to 

the Department’s subaccount for cash on hand in Treasury. which usually occurs 

within 1-2 business days. Once these actions are completed, F&A is able to process 

requests to expend at the state level or at the local level if part of a subgrant program. 

As set forth below, this process was not followed in its entirety. 

On May 30, 2018, the Secretary of State submitted his request to the U.S. EAC for the 

funds. The funds were automatically deposited (or drawn down) on June 6, 2018 into 

the cash on hand account. The budget amendment preceding the Secretary’s request did 

not include a “purchase of investment” as necessary to place the funds into an interest 

bearing account, once drawn down from the U.S. EAC. By the time the federal funds 

were requested, the Legislature had already adjourned its session and the interim 

Legislative Budget Committee (LBC) was not intending to meet until late fall. A revised 

budgetary amendment plan was prepared nonetheless in the hopes that the LBC might 

convene in time to implement a subgrant program and disburse funds. The LBC 

scheduled a meeting in late July 2018 and approved the revised budgetary plan. The 

funds were then deposited, in error, into a non-interest bearing account, as noted in the 

applicable finding. The Department began to immediately administer funds from the 

subgrant program for allowable expenses to ensure the security of the 2018 Primary 

Election held on August 28, and the 2018 General Election held on November 6, 2018. 

In late January 2019, the Department employees identified the error and took 

immediate action to correct it. A budget amendment was submitted to the Governor’s 

Office on February 19, 2019. After a required 14-day review and consultation period, the 

budget amendment was approved on March 5, 2019. The remaining funds were placed 

in an interest-bearing account on March 7, 2019. 

Based upon our review of the timeline and facts surrounding this error, the Department 

concluded that the compressed timeline, inadequate employee training and oversight, 

and rapidly changing budget plans all contributed to failure to comply with EAC 

requirements and existing Department policy. In addition to correcting this specific 

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FL DOS Response to U.S. EAC Audit 

22 March 2021 

error, the Department also worked to improve its overall compliance and review 

system, by adding additional checks and internal audits within the financial areas of the 

Department. 

EAC Finding No. 2 

Response: The Department agrees with the finding and will take the necessary steps to 

implement the U.S. EAC recommendations. The Department has already taken the 

steps to modify its past reporting methodology to conform with the recent changes in 

U. S. Election Assistance Commission’s HAVA reporting requirements. This includes 

reporting the balance invested in the interest-bearing State Treasury account, reporting 

the funds drawn down but not yet spent at the reporting end date, and reporting all 

federal expenditures and transactions, such as refunds, that decrease expenditures. This 

change in reporting methodology will more accurately align the balances calculated by 

the Department and the U.S. EAC. 

EAC Finding No. 3 

Response: The Department agrees with the finding and will take the necessary steps to 

implement the U.S. EAC recommendations. The Department has also already initiated 

steps to identify property purchased with HAVA funds that meet the inventory 

threshold requirement and record the property into FLAIR: 

1. Review and identify applicable vouchers (current and archived. 

2. Obtain locations and accurate accounting codes for FLAIR input, 

3. Process FLAIR transactions to add to Property Pending File (this is an 

overnight process) 

4. Issue tag numbers within the General Services Office 

5. Process FLAIR transactions to transfer property to Property Master File 

Additionally, it has already reviewed and updated its policies and procedures as 

needed to meet the recommendations including the formal designation of property 

custodians within the Department. 

EAC Finding No. 4 

Response: The Department agrees with the finding and will take the necessary steps to 

implement the U.S. EAC recommendations. 

3 
 

FL DOS Response to U.S. EAC Audit 

22 March 2021 

The Department recently send an email reminder (March 15, 2021) to all 67 county 

Supervisors of Elections to remind them of the continuing requirement under 2 C.F.R. 

200.313(d)(1) to inventory items purchased with federal funds whose value or cost meet 

or exceed the applicable threshold for inventory. Additionally, the email provided a 

sample property inventory form that could be used to keep track of the required 

information. The Department has already begun to review its current template for 

subgrant agreements and will involve the Inspector General and the General Counsel’s 

office to ensure that provisions therein are consistent with federal and state audit 

requirements. The Department will be implementing a more robust post-grant 

monitoring effort of subgrant awards to include a random sample of 10% of the 

subrecipients. 

Again, we look forward to continue to work with the U.S. Election Assistance 

Commission as to the recommendations. 

Respectfully, 

Maria Matthews, Esq. 

Director, Division of Elections 

Pc: Secretary of State Laurel M. Lee 

Assistant Secretary of State Jennifer Kennedy 

Candie Fuller, Inspector General 

John Boynton, Chief Operating Officer 

4 
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: Patricia Layfield 

Inspector General 

FROM: Mona Harrington 

Executive Director 

DATE: March 25, 2021 

RE: Response to the Draft Performance Audit Report, Administration of 

Payments Received under the Help America Vote Act by the Florida 

Department of State 

Thank you for the opportunity to respond to the draft performance audit report of EAC’s 

grant funds to Florida. 

We appreciate the auditor’s findings and recommendations and note that the state 

described its planned and completed actions in its response to the draft audit. We are 

requesting a revised 2019 Federal Financial Report and will work with the state to 

implement and complete appropriate corrective action on the remaining findings. 
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: 

17 
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 No 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 and Communicate 

Internally 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 and the internal communication processes used to compile the data necessary to 

meet the state’s reporting objectives. 

18 
 

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 equipment vendor and 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 was properly accounted for and not remitted to the State’s 

general fund. 

19 
EXPENDITURES BY BUDGET CATEGORY AND PROGRAM CATEGO

JUNE 5, 2018 TO SEPTEMBER 30, 2019 

Voting 

Equipment 

Election 

Auditing 

Voter 

Registration 

Systems 

Cyber 

Security Communications Other 

$ - $ - $ - $ - $ - 

$ 

- - - 969,474 - 

- - - - - 15,166,6- - - - 236,078 

- - - 921,396 - 

$ - $ - $ - $ 236,078 1,890,870 $ $ 15,166,6

- - - - - 

$ - $ - $ - $ 236,078 1,890,870 $ $ 15,166,6

- - - - - 

$ - $ - $ - $ 236,078 1,890,870 $ $ 15,166,6

Program Categories 

Budget Categories 

Personnel (Including Fringe) Equipment Subgrants Training All Other Costs Total Direct Costs Indirect Costs (if applied) Total Federal Expenditures Non-Federal Match Total Program Expenditures 

20 
Appendix D 

MONETARY IMPACT AS OF SEPTEMBER 30, 2019 

Additional 

Questioned Unsupported Funds for 

Description Costs Costs Program 

Lost Interest Earnings $ - $ - $ 82,466 

Total $ - $ - $ 82,466 

Note: The lost interest earnings calculation was determined by the Office and should be verified 

in accordance with the recommendation identified in Finding No. 1. 

21 
 

 

 

 

 

 

 

 

 

 

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management to help ensure effective government operations.

Retrieve OIG reports on the OIG website, https://www.eac.gov/inspectorgeneral/ 

Request copies by e-mail to: eacoig@eac.gov 

Send mail orders to: 

U.S. Election Assistance Commission 

Office of Inspector General 

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Washington, DC 20001 

To order by phone: Voice: 1-866-552-0004 

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Washington, DC 20001 

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