Audit of Interest Income Earned on HAVA Funds

Submitting OIG:

Report Description:

The Help America Vote Act of 2002 (HAVA) required states to establish an interest-earning election fund, in to which grant funds are deposited and maintained. OIG, through the independent public accounting firm of McBride, Lock & Associates, LLC, audited compliance with these requirements. The audit included open Election Security and Section 251 grants at 34 states and territories, as of September 30, 2022.

Date Issued:

Monday, April 15, 2024

Agency Reviewed / Investigated:

Election Assistance Commission

Submitting OIG-Specific Report Number:

G23HQ0027-24-07

Location(s):

United States

Type of Report:

Audit

Questioned Costs:

Funds for Better Use:

Number of Recommendations:

Report updated under NDAA 5274:

Yes

View Document:

Attachment	Size
G23HQ0027-24-07AuditofInterestIncomeEarned.pdf	1.25 MB

Recommendation Number	Recommendation Status	Significant Recommendation
1	Open	No
We recommend that EAC strengthen the procedures for monitoring grantees’ compliance with the applicable requirements for interest income earned on HAVA grant funds.
2	Open	No
We recommend that EAC work with Alabama to: a. Determine an adequate allocation methodology, recalculate the interest allocations from the inception of the 2018 Election Security grant using this methodology, and correct the reporting of interest income on the September 30, 2022, and any subsequently filed, Election Security and Section 251 Federal Financial Reports. b. Implement procedures to ensure that proper supporting documentation is maintained to support the amounts reported to EAC on the Federal Financial Reports. c. Ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income.
3	Open	No
We recommend that EAC work with Connecticut to: a. Correct the interest income reported on the September 30, 2022, and any subsequently filed, Election Security Federal Financial Reports. b. Implement procedures to ensure accurate reporting on future Federal Financial Reports and to ensure that supporting documentation is maintained to support the amounts reported to EAC on the Federal Financial Reports. c. Ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income. d. Implement procedures to ensure that subgrantees are properly informed of the federal requirements related to interest income and the need for subgrantees to report interest income earned, if applicable.
4	Open	No
We recommend that EAC work with Florida to ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income.
5	Open	No
We recommend that EAC work with Hawaii to: a. Determine the amount of any lost interest due to the delays in the earning of interest on the 2022 Election Security grant funds, and to ensure the amount is deposited into the election fund. b. Determine the amount of Election Security interest that was incorrectly posted to the accounting system fund for the Section 101 and Section 251 grants, move the amounts to the appropriate fund in the accounting system, and file corrected Federal Financial Reports for the September 30, 2022, and any subsequently filed, Election Security, Section 101 and Section 251 grants. c. Implement procedures to ensure that future EAC grants are deposited into an interest-bearing election fund on a timely basis.
6	Open	No
We recommend that EAC work with Illinois to ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income.
7	Open	No
We recommend that EAC work with Kansas to: a. Correct the interest income reported on the September 30, 2022, and any subsequently filed, Election Security and Section 251 Federal Financial Reports. b. Implement procedures to ensure accurate reporting on future Federal Financial Reports.
8	Open	No
We recommend that EAC work with Kentucky to: a. Determine that the September 30, 2022, and any subsequently filed, Election Security Federal Financial Reports are properly corrected to reflect the revised interest allocations. b. Ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income.
9	Open	No
We recommend that EAC work with Louisiana to implement procedures to ensure that proper supporting documentation is maintained to support the amounts reported to EAC on the Federal Financial Reports.
10	Open	No
We recommend that EAC work with Maine to: a. Determine the amount of lost interest due to the delay in establishing the funds as interest bearing with the Treasury and ensure that the amount is deposited into the election fund. b. Implement procedures to ensure that the Treasury is notified in a timely manner of the need to earn interest on future HAVA grants.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

Open

We recommend that EAC strengthen the procedures for monitoring grantees’ compliance with the applicable requirements for interest income earned on HAVA grant funds.

Open

We recommend that EAC work with Alabama to: a. Determine an adequate allocation methodology, recalculate the interest allocations from the inception of the 2018 Election Security grant using this methodology, and correct the reporting of interest income on the September 30, 2022, and any subsequently filed, Election Security and Section 251 Federal Financial Reports. b. Implement procedures to ensure that proper supporting documentation is maintained to support the amounts reported to EAC on the Federal Financial Reports. c. Ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income.

Open

We recommend that EAC work with Connecticut to: a. Correct the interest income reported on the September 30, 2022, and any subsequently filed, Election Security Federal Financial Reports. b. Implement procedures to ensure accurate reporting on future Federal Financial Reports and to ensure that supporting documentation is maintained to support the amounts reported to EAC on the Federal Financial Reports. c. Ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income. d. Implement procedures to ensure that subgrantees are properly informed of the federal requirements related to interest income and the need for subgrantees to report interest income earned, if applicable.

Open

We recommend that EAC work with Florida to ensure the implementation of proper written policies and procedures regarding the calculation and reporting of interest income.