Overview
During the audit period, the Massachusetts Emergency Management Agency (MEMA) did not develop or implement internal controls to ensure its compliance with reporting requirements outlined in its intergovernmental service agreements (ISAs).
Specifically, MEMA did not have controls to ensure its compliance with the reporting requirements of its four ISAs with the Executive Office for Administration and Finance (ANF) and the one ISA with the Department of Public Health (DPH).
The four ISAs executed with ANF covered the period March 10, 2020 through June 30, 2022. According to these ISAs, MEMA was required to submit biweekly expenditure reports (approximately 55 for the audit period) detailing ISA-related expenditures to ANF. However, MEMA could not provide evidence that it submitted any biweekly reports to ANF during the audit period.
The one ISA MEMA executed with DPH covered the period December 7, 2020 through June 30, 2021. This ISA required MEMA to submit a final report upon completion of the ISA. No evidence was provided to confirm that MEMA complied with this requirement.
MEMA’s failure to submit the required biweekly reports to ANF and the required final report to DPH constitutes noncompliance with contractual obligations and regulatory requirements. This lack of reporting undermines transparency and accountability in tracking ISA-related expenditures and performance and may have hindered effective oversight by both ANF and DPH.
Authoritative Guidance
Section 8 of Attachment A—Terms of Performance and Justifications of the ISA between MEMA and ANF states the following:
[REQUIRED] Identify the format and timing of ISA reports to the Buyer/Parent Department. Include the type of reports (e.g., progress or status, data, etc.), timing of reports (e.g., weekly, monthly, final) and the medium for submission of reports (e.g., e-mail, Excel spreadsheet, paper, telephone):
MEMA shall report to ANF on a bi-weekly basis costs and activities related to this ISA.
Section 8 of Attachment A—Terms of Performance and Justifications of the ISA between MEMA and DPH states the following:
[REQUIRED] Identify the format and timing of ISA reports to the Buyer/Parent Department. Include the type of reports (e.g., progress or status, data, etc.), timing of reports (e.g., weekly, monthly, final) and the medium for submission of reports (e.g., e-mail, Excel spreadsheet, paper, telephone):
Final report of the expenditures was to be sent through email at the [completion] of the ISA to DPH.
Reasons for Issue
MEMA stated that the reason for a lack of internal controls over the reporting requirements was because MEMA relied on collaboration activities and informal communication with the two agencies with which it executed ISAs. MEMA stated that it relied on strong relationships with these two agencies and had never encountered a case where a funding agency expressed concern over a lack of information from MEMA.
Regarding the ISAs with ANF, MEMA officials informed us that MEMA was periodically providing ANF with reports of COVID-19 fund expenditures at ANF’s request. Because of this, MEMA officials considered that MEMA was in compliance with the ISA. However, we noted that the evidence of MEMA’s periodic reporting to ANF was not done on a biweekly basis as required by the ISA, and, therefore, MEMA did not comply with the terms of the ISA.
MEMA was unable to provide evidence that it had sent the required final report to DPH.
Recommendation
MEMA should develop and implement internal controls or procedures to ensure that it submits all required reports in a timely manner. MEMA should also designate responsible employees to monitor compliance with reporting obligations.
Auditee’s Response
MEMA agrees that it failed to submit biweekly reports to ANF and a final report to DPH as required by the applicable ISAs. Accordingly, MEMA was not in strict compliance with the ISAs and [Section 6 of Title 815 of the Code of Massachusetts Regulations]. That said, MEMA responded to all of ANF’s requests to fill out spreadsheets concerning spending as described in the 11/20/2020 email from ANF to MEMA. In addition, the Massachusetts Management and Reporting System (MMARS) is the official accounting system used by the State to record and report on the State’s accounting and financial activity. As the “parent” in the ISAs with MEMA, it is MEMA’s understanding that ANF had access to costs and activities associated with its ISAs via MMARS. Similarly, it is MEMA’s understanding that DPH had the ability to run the expenditure report requested at the termination of its ISA with MEMA.
Despite transparency via MMARS, MEMA agrees that it must strictly comply with ISAs and regulations. To that end, prompted by the Comptroller’s annual Internal Control Certification (ICC) requirement, MEMA formed an internal team led by the [chief financial officer], to update its written policies and procedures, and create a system of written internal controls to ensure compliance with the Comptroller’s published guidance, and prevent fraud, waste, and abuse of Commonwealth resources. These updated policies and procedures will include a tracking system or procedure to ensure contract terms are identified and complied with, to include ensuring all reports are submitted in a timely manner and documentation is properly stored and retrievable. Finally, MEMA understands the need for a designated compliance officer and is actively weighing its options in this regard, subject to fiscal and [full-time equivalent] limitations.
Auditor’s Reply
Based on MEMA’s response, it is taking measures to address our concerns regarding this matter. We will follow up on this matter in approximately six months as part of our post-audit review process.
| Date published: | June 11, 2025 |
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