We audited the costs claimed by the Arizona Game and Fish Department (Department), under grants awarded by the U.S. Fish and Wildlife Service (FWS). The FWS provided the grants to the State under the Wildlife and Sport Fish Restoration Program. The audit included claims totaling $70.2 million on 11 grants that were open during the State fiscal years that ended June 30, 2014, and June 30, 2015. The audit also covered the Department’s compliance with applicable laws, regulations, and FWS guidelines, including those related to collecting and using hunting and fishing license revenue and reporting program income.
We questioned costs totaling $3,948,965 due to 1) unallowable payroll charges, 2) out-of-period costs, 3) inadequate subrecipient financial management systems, 4) deficiencies in documenting in-kind contributions, and 5) inadequate competition. In addition, we determined that the Department:
- Potentially diverted license revenue by writing off $21,276 from the State’s accounting records without maintaining adequate documentation to justify this action
- Did not consistently comply with subaward requirements
- Submitted annual performance reports to the FWS that were missing key information
- Did not comply with all comprehensive management system requirements
- Inappropriately drew down $23,425 in Federal funds from the FWS
The FWS Region 2 and the Department responded to our draft report. We consider all recommendations to be resolved but not implemented