Finding Number: 2022-002 ? Subrecipient Monitoring Evaluation of Finding: Material Weakness. Federal Program: Community Services Block Grant Federal Assistance No.: 93.569 Title: CSBG-CV Federal Grantor: U.S. Department of Health and Human Services Pass-Through Entity: State of California, Health and Human Services Agency Grant number: 20F-3684 Criteria or specified requirement: 2 CFR sections 200.332 requires that pass-through entities evaluate each subrecipients risk of noncompliance with federal awards and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes in compliance with the conditions of the subaward; and that subaward performance goals are achieved. Condition: The Authority has procedures in place to comply with certain subrecipient monitoring requirements, however, the procedures do not include all requirements under 2 CFR sections 200.332. The Authority is required to evaluate risk, monitor the activities of the subrecipient and ensure accountability of subrecipients. The primary activity being performed is ensuring accountability of subrecipients whereby the Authority reviews reimbursement request details to ensure that the subrecipient?s expenditures are eligible under the federal program. However, the following activities are also required and are not being performed: ? Evaluate Risk?Evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: o The subrecipient?s prior experience with the same or similar subawards; o The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR part 200, subpart F, and the extent to which the same or similar subaward has been audited as a major program; o Whether the subrecipient has new personnel or new or substantially changed systems; and o The extent and results of federal awarding agency monitoring (e.g., if the subrecipient also receives federal awards directly from a federal awarding agency). ? Monitor?Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: o Reviewing financial and programmatic (performance and special reports) required by the PTE. o Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, onsite reviews, and other means. o Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. In addition, in 2022 the Authority underwent a desk review by the State of California, Health and Human Services Agency who found that the Authority did not conduct onsite monitoring reviews of subrecipients for fiscal year 2021-22. While the deviation from the policy was due to the COVID-19 pandemic, the policy still required site visits and the COVID-19 restrictions were lifted prior to the end of the fiscal year. Cause: Not all of the requirements for subrecipient monitoring were known to the Authority, therefore some of the procedures were not built into their policy and therefore, were not performed. In person monitoring was paused during the COVID-19 pandemic and did not begin again once the restrictions were lifted. Effect: The subrecipients were not sufficiently monitored as required under Uniform Guidance. Questioned Costs: None Context: The Authority?s policy did not include all of the required monitoring activities resulting in a systemic deficiency in subrecipient monitoring. Recommendation: We recommends that the Authority update its policy to include all subrecipient monitoring activities and consider including alternative procedures for onsite reviews when in person monitoring cannot take place.
Finding Number: 2022-003 ? Reporting Evaluation of Finding: Significant Deficiency. Federal Program: Community Services Block Grant Federal Assistance No.: 93.569 Title: CSBG-CV Federal Grantor: U.S. Department of Health and Human Services Pass-Through Entity: State of California, Health and Human Services Agency Grant number: 22F-5045 Criteria or specified requirement: The Authority did not submit monthly expenditures for open contracts on or before the 25th calendar day following the report period in accordance with current reporting requirements. (CPN-C-22-01, 1.0 CSBG Reimbursement Policies and Procedures, 1.1 Financial Reporting - EARS Invoice Due Date). Condition: In 2022 the Authority underwent a desk review by the State of California, Health and Human Services Agency who found that the Authority did not submit expenditure reports for the periods of March 1, 2022 through June 30, 2022 timely. Cause: Unknown. Effect: The untimely submission of reports prevented the State from performing testing on expenditures for the grant. Questioned Costs: None Context: This appears to be a systemic deficiency in the design of internal controls as it was all months under the grant, not just one. Recommendation: The Authority should perform an evaluation of its internal accounting and expenditure reporting practices to determine the cause for the untimely submission of monthly expenditure reports and identify efficiencies that will allow for the timely submission of future expenditure reporting.
Finding Number: 2022-002 ? Subrecipient Monitoring Evaluation of Finding: Material Weakness. Federal Program: Community Services Block Grant Federal Assistance No.: 93.569 Title: CSBG-CV Federal Grantor: U.S. Department of Health and Human Services Pass-Through Entity: State of California, Health and Human Services Agency Grant number: 20F-3684 Criteria or specified requirement: 2 CFR sections 200.332 requires that pass-through entities evaluate each subrecipients risk of noncompliance with federal awards and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes in compliance with the conditions of the subaward; and that subaward performance goals are achieved. Condition: The Authority has procedures in place to comply with certain subrecipient monitoring requirements, however, the procedures do not include all requirements under 2 CFR sections 200.332. The Authority is required to evaluate risk, monitor the activities of the subrecipient and ensure accountability of subrecipients. The primary activity being performed is ensuring accountability of subrecipients whereby the Authority reviews reimbursement request details to ensure that the subrecipient?s expenditures are eligible under the federal program. However, the following activities are also required and are not being performed: ? Evaluate Risk?Evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: o The subrecipient?s prior experience with the same or similar subawards; o The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR part 200, subpart F, and the extent to which the same or similar subaward has been audited as a major program; o Whether the subrecipient has new personnel or new or substantially changed systems; and o The extent and results of federal awarding agency monitoring (e.g., if the subrecipient also receives federal awards directly from a federal awarding agency). ? Monitor?Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: o Reviewing financial and programmatic (performance and special reports) required by the PTE. o Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, onsite reviews, and other means. o Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. In addition, in 2022 the Authority underwent a desk review by the State of California, Health and Human Services Agency who found that the Authority did not conduct onsite monitoring reviews of subrecipients for fiscal year 2021-22. While the deviation from the policy was due to the COVID-19 pandemic, the policy still required site visits and the COVID-19 restrictions were lifted prior to the end of the fiscal year. Cause: Not all of the requirements for subrecipient monitoring were known to the Authority, therefore some of the procedures were not built into their policy and therefore, were not performed. In person monitoring was paused during the COVID-19 pandemic and did not begin again once the restrictions were lifted. Effect: The subrecipients were not sufficiently monitored as required under Uniform Guidance. Questioned Costs: None Context: The Authority?s policy did not include all of the required monitoring activities resulting in a systemic deficiency in subrecipient monitoring. Recommendation: We recommends that the Authority update its policy to include all subrecipient monitoring activities and consider including alternative procedures for onsite reviews when in person monitoring cannot take place.
Finding Number: 2022-003 ? Reporting Evaluation of Finding: Significant Deficiency. Federal Program: Community Services Block Grant Federal Assistance No.: 93.569 Title: CSBG-CV Federal Grantor: U.S. Department of Health and Human Services Pass-Through Entity: State of California, Health and Human Services Agency Grant number: 22F-5045 Criteria or specified requirement: The Authority did not submit monthly expenditures for open contracts on or before the 25th calendar day following the report period in accordance with current reporting requirements. (CPN-C-22-01, 1.0 CSBG Reimbursement Policies and Procedures, 1.1 Financial Reporting - EARS Invoice Due Date). Condition: In 2022 the Authority underwent a desk review by the State of California, Health and Human Services Agency who found that the Authority did not submit expenditure reports for the periods of March 1, 2022 through June 30, 2022 timely. Cause: Unknown. Effect: The untimely submission of reports prevented the State from performing testing on expenditures for the grant. Questioned Costs: None Context: This appears to be a systemic deficiency in the design of internal controls as it was all months under the grant, not just one. Recommendation: The Authority should perform an evaluation of its internal accounting and expenditure reporting practices to determine the cause for the untimely submission of monthly expenditure reports and identify efficiencies that will allow for the timely submission of future expenditure reporting.