Audit 304784

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Earmarking and Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Earmarking – Under Treasury’s Final Rule that became effective on April 1, 2022, recipients can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the Final Rule to determine the amount of State and Local Fiscal Recovery Funds (SLFRF) that can be used for the “provision of government services.” To calculate revenue loss at each of these dates, recipients must follow a four-step process which includes: a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue. b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date: base year revenue x (1 + growth adjustment) n/12. The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency. c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. Further, the Final Rule defines the term general revenue to include revenues collected by a recipient and generated from its underlying economy and would capture a range of different types of tax revenues, as well as other types of revenue that are available to support government services. In calculating revenue, recipients should sum across all revenue streams covered as general revenue. Reporting – Per 2 CFR 200.328 and 31 CFR section 35.4(c), States, territories, metropolitan cities, counties, and Tribal governments were required to submit one interim report and quarterly Project and Expenditure reports thereafter. A Key Line Item containing critical information, as defined by Treasury, in these reports is the Revenue Replacement section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not calculate their revenue loss in accordance with the Final Rule. As a result, amounts reported under the Revenue Replacement section of the Project and Expenditure reports were inaccurate for all quarters within the fiscal year ended June 30, 2023 Context: The County used incorrect base year revenues in their revenue loss calculation. Only general fund revenue was used in the calculation instead of summing across all revenue streams as defined by the Final Rule. Further, the County used an incorrect growth rate of 4.0% instead of 5.2% as required by the Final Rule. The Revenue Replacement section of the Project and Expenditure reports were inaccurate due to these errors. Cause: The County’s policies and procedures were not sufficient to ensure that their revenue loss calculation was in accordance with the Final Rule and that accurate information was reported in their Project and Expenditure reports under the Revenue Replacement section. Effect: The County was not in compliance with federal requirements, and failure to comply with those requirements could jeopardize future funding. Questioned costs: Undetermined. Recommendation: We recommend that the County revise the revenue loss calculation to be in accordance with the U.S. Treasury’s guidance as outlined by the Final Rule and submit a revised Project and Expenditure report to the U.S. Treasury’s SLFRF portal. Views of responsible officials: At the time that the Office of Management and Budget (OMB) calculated the revenue loss it was unclear whether it applied to only general funds or all funds. Guidance from the U.S. Treasury Department was updated frequently following enactment of the American Rescue Plan Act of 2021. Based on the finding of the audit that revenue loss calculation is not in accord with the Final Rule, OMB staff re-calculated the data using all funds.

Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Earmarking and Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Earmarking – Under Treasury’s Final Rule that became effective on April 1, 2022, recipients can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the Final Rule to determine the amount of State and Local Fiscal Recovery Funds (SLFRF) that can be used for the “provision of government services.” To calculate revenue loss at each of these dates, recipients must follow a four-step process which includes: a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue. b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date: base year revenue x (1 + growth adjustment) n/12. The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency. c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. Further, the Final Rule defines the term general revenue to include revenues collected by a recipient and generated from its underlying economy and would capture a range of different types of tax revenues, as well as other types of revenue that are available to support government services. In calculating revenue, recipients should sum across all revenue streams covered as general revenue. Reporting – Per 2 CFR 200.328 and 31 CFR section 35.4(c), States, territories, metropolitan cities, counties, and Tribal governments were required to submit one interim report and quarterly Project and Expenditure reports thereafter. A Key Line Item containing critical information, as defined by Treasury, in these reports is the Revenue Replacement section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not calculate their revenue loss in accordance with the Final Rule. As a result, amounts reported under the Revenue Replacement section of the Project and Expenditure reports were inaccurate for all quarters within the fiscal year ended June 30, 2023 Context: The County used incorrect base year revenues in their revenue loss calculation. Only general fund revenue was used in the calculation instead of summing across all revenue streams as defined by the Final Rule. Further, the County used an incorrect growth rate of 4.0% instead of 5.2% as required by the Final Rule. The Revenue Replacement section of the Project and Expenditure reports were inaccurate due to these errors. Cause: The County’s policies and procedures were not sufficient to ensure that their revenue loss calculation was in accordance with the Final Rule and that accurate information was reported in their Project and Expenditure reports under the Revenue Replacement section. Effect: The County was not in compliance with federal requirements, and failure to comply with those requirements could jeopardize future funding. Questioned costs: Undetermined. Recommendation: We recommend that the County revise the revenue loss calculation to be in accordance with the U.S. Treasury’s guidance as outlined by the Final Rule and submit a revised Project and Expenditure report to the U.S. Treasury’s SLFRF portal. Views of responsible officials: At the time that the Office of Management and Budget (OMB) calculated the revenue loss it was unclear whether it applied to only general funds or all funds. Guidance from the U.S. Treasury Department was updated frequently following enactment of the American Rescue Plan Act of 2021. Based on the finding of the audit that revenue loss calculation is not in accord with the Final Rule, OMB staff re-calculated the data using all funds.

Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Earmarking and Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Earmarking – Under Treasury’s Final Rule that became effective on April 1, 2022, recipients can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the Final Rule to determine the amount of State and Local Fiscal Recovery Funds (SLFRF) that can be used for the “provision of government services.” To calculate revenue loss at each of these dates, recipients must follow a four-step process which includes: a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue. b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date: base year revenue x (1 + growth adjustment) n/12. The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency. c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. Further, the Final Rule defines the term general revenue to include revenues collected by a recipient and generated from its underlying economy and would capture a range of different types of tax revenues, as well as other types of revenue that are available to support government services. In calculating revenue, recipients should sum across all revenue streams covered as general revenue. Reporting – Per 2 CFR 200.328 and 31 CFR section 35.4(c), States, territories, metropolitan cities, counties, and Tribal governments were required to submit one interim report and quarterly Project and Expenditure reports thereafter. A Key Line Item containing critical information, as defined by Treasury, in these reports is the Revenue Replacement section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not calculate their revenue loss in accordance with the Final Rule. As a result, amounts reported under the Revenue Replacement section of the Project and Expenditure reports were inaccurate for all quarters within the fiscal year ended June 30, 2023 Context: The County used incorrect base year revenues in their revenue loss calculation. Only general fund revenue was used in the calculation instead of summing across all revenue streams as defined by the Final Rule. Further, the County used an incorrect growth rate of 4.0% instead of 5.2% as required by the Final Rule. The Revenue Replacement section of the Project and Expenditure reports were inaccurate due to these errors. Cause: The County’s policies and procedures were not sufficient to ensure that their revenue loss calculation was in accordance with the Final Rule and that accurate information was reported in their Project and Expenditure reports under the Revenue Replacement section. Effect: The County was not in compliance with federal requirements, and failure to comply with those requirements could jeopardize future funding. Questioned costs: Undetermined. Recommendation: We recommend that the County revise the revenue loss calculation to be in accordance with the U.S. Treasury’s guidance as outlined by the Final Rule and submit a revised Project and Expenditure report to the U.S. Treasury’s SLFRF portal. Views of responsible officials: At the time that the Office of Management and Budget (OMB) calculated the revenue loss it was unclear whether it applied to only general funds or all funds. Guidance from the U.S. Treasury Department was updated frequently following enactment of the American Rescue Plan Act of 2021. Based on the finding of the audit that revenue loss calculation is not in accord with the Final Rule, OMB staff re-calculated the data using all funds.

Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.

Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.

Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-001 Prior Year Finding: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Award Number and Year: B-19-UC-24-0002 (7/31/2019 – 9/1/2027), B-20-UC-24-0002 (8/17/2020 – 9/1/2028), B-21-UC-24-0002 (10/27/2021 – 9/1/2029), B-22-UC-24-002 (7/1/2022 – 9/1/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $890,051, and $0 was reported as required by FFATA requirements. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 8 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $890,051 $890,051 $0 $0 $0 Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials:

Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Earmarking and Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Earmarking – Under Treasury’s Final Rule that became effective on April 1, 2022, recipients can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the Final Rule to determine the amount of State and Local Fiscal Recovery Funds (SLFRF) that can be used for the “provision of government services.” To calculate revenue loss at each of these dates, recipients must follow a four-step process which includes: a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue. b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date: base year revenue x (1 + growth adjustment) n/12. The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency. c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. Further, the Final Rule defines the term general revenue to include revenues collected by a recipient and generated from its underlying economy and would capture a range of different types of tax revenues, as well as other types of revenue that are available to support government services. In calculating revenue, recipients should sum across all revenue streams covered as general revenue. Reporting – Per 2 CFR 200.328 and 31 CFR section 35.4(c), States, territories, metropolitan cities, counties, and Tribal governments were required to submit one interim report and quarterly Project and Expenditure reports thereafter. A Key Line Item containing critical information, as defined by Treasury, in these reports is the Revenue Replacement section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not calculate their revenue loss in accordance with the Final Rule. As a result, amounts reported under the Revenue Replacement section of the Project and Expenditure reports were inaccurate for all quarters within the fiscal year ended June 30, 2023 Context: The County used incorrect base year revenues in their revenue loss calculation. Only general fund revenue was used in the calculation instead of summing across all revenue streams as defined by the Final Rule. Further, the County used an incorrect growth rate of 4.0% instead of 5.2% as required by the Final Rule. The Revenue Replacement section of the Project and Expenditure reports were inaccurate due to these errors. Cause: The County’s policies and procedures were not sufficient to ensure that their revenue loss calculation was in accordance with the Final Rule and that accurate information was reported in their Project and Expenditure reports under the Revenue Replacement section. Effect: The County was not in compliance with federal requirements, and failure to comply with those requirements could jeopardize future funding. Questioned costs: Undetermined. Recommendation: We recommend that the County revise the revenue loss calculation to be in accordance with the U.S. Treasury’s guidance as outlined by the Final Rule and submit a revised Project and Expenditure report to the U.S. Treasury’s SLFRF portal. Views of responsible officials: At the time that the Office of Management and Budget (OMB) calculated the revenue loss it was unclear whether it applied to only general funds or all funds. Guidance from the U.S. Treasury Department was updated frequently following enactment of the American Rescue Plan Act of 2021. Based on the finding of the audit that revenue loss calculation is not in accord with the Final Rule, OMB staff re-calculated the data using all funds.

Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Earmarking and Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Earmarking – Under Treasury’s Final Rule that became effective on April 1, 2022, recipients can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the Final Rule to determine the amount of State and Local Fiscal Recovery Funds (SLFRF) that can be used for the “provision of government services.” To calculate revenue loss at each of these dates, recipients must follow a four-step process which includes: a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue. b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date: base year revenue x (1 + growth adjustment) n/12. The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency. c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. Further, the Final Rule defines the term general revenue to include revenues collected by a recipient and generated from its underlying economy and would capture a range of different types of tax revenues, as well as other types of revenue that are available to support government services. In calculating revenue, recipients should sum across all revenue streams covered as general revenue. Reporting – Per 2 CFR 200.328 and 31 CFR section 35.4(c), States, territories, metropolitan cities, counties, and Tribal governments were required to submit one interim report and quarterly Project and Expenditure reports thereafter. A Key Line Item containing critical information, as defined by Treasury, in these reports is the Revenue Replacement section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not calculate their revenue loss in accordance with the Final Rule. As a result, amounts reported under the Revenue Replacement section of the Project and Expenditure reports were inaccurate for all quarters within the fiscal year ended June 30, 2023 Context: The County used incorrect base year revenues in their revenue loss calculation. Only general fund revenue was used in the calculation instead of summing across all revenue streams as defined by the Final Rule. Further, the County used an incorrect growth rate of 4.0% instead of 5.2% as required by the Final Rule. The Revenue Replacement section of the Project and Expenditure reports were inaccurate due to these errors. Cause: The County’s policies and procedures were not sufficient to ensure that their revenue loss calculation was in accordance with the Final Rule and that accurate information was reported in their Project and Expenditure reports under the Revenue Replacement section. Effect: The County was not in compliance with federal requirements, and failure to comply with those requirements could jeopardize future funding. Questioned costs: Undetermined. Recommendation: We recommend that the County revise the revenue loss calculation to be in accordance with the U.S. Treasury’s guidance as outlined by the Final Rule and submit a revised Project and Expenditure report to the U.S. Treasury’s SLFRF portal. Views of responsible officials: At the time that the Office of Management and Budget (OMB) calculated the revenue loss it was unclear whether it applied to only general funds or all funds. Guidance from the U.S. Treasury Department was updated frequently following enactment of the American Rescue Plan Act of 2021. Based on the finding of the audit that revenue loss calculation is not in accord with the Final Rule, OMB staff re-calculated the data using all funds.

Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Earmarking and Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Earmarking – Under Treasury’s Final Rule that became effective on April 1, 2022, recipients can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the Final Rule to determine the amount of State and Local Fiscal Recovery Funds (SLFRF) that can be used for the “provision of government services.” To calculate revenue loss at each of these dates, recipients must follow a four-step process which includes: a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue. b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date: base year revenue x (1 + growth adjustment) n/12. The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency. c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. Further, the Final Rule defines the term general revenue to include revenues collected by a recipient and generated from its underlying economy and would capture a range of different types of tax revenues, as well as other types of revenue that are available to support government services. In calculating revenue, recipients should sum across all revenue streams covered as general revenue. Reporting – Per 2 CFR 200.328 and 31 CFR section 35.4(c), States, territories, metropolitan cities, counties, and Tribal governments were required to submit one interim report and quarterly Project and Expenditure reports thereafter. A Key Line Item containing critical information, as defined by Treasury, in these reports is the Revenue Replacement section. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not calculate their revenue loss in accordance with the Final Rule. As a result, amounts reported under the Revenue Replacement section of the Project and Expenditure reports were inaccurate for all quarters within the fiscal year ended June 30, 2023 Context: The County used incorrect base year revenues in their revenue loss calculation. Only general fund revenue was used in the calculation instead of summing across all revenue streams as defined by the Final Rule. Further, the County used an incorrect growth rate of 4.0% instead of 5.2% as required by the Final Rule. The Revenue Replacement section of the Project and Expenditure reports were inaccurate due to these errors. Cause: The County’s policies and procedures were not sufficient to ensure that their revenue loss calculation was in accordance with the Final Rule and that accurate information was reported in their Project and Expenditure reports under the Revenue Replacement section. Effect: The County was not in compliance with federal requirements, and failure to comply with those requirements could jeopardize future funding. Questioned costs: Undetermined. Recommendation: We recommend that the County revise the revenue loss calculation to be in accordance with the U.S. Treasury’s guidance as outlined by the Final Rule and submit a revised Project and Expenditure report to the U.S. Treasury’s SLFRF portal. Views of responsible officials: At the time that the Office of Management and Budget (OMB) calculated the revenue loss it was unclear whether it applied to only general funds or all funds. Guidance from the U.S. Treasury Department was updated frequently following enactment of the American Rescue Plan Act of 2021. Based on the finding of the audit that revenue loss calculation is not in accord with the Final Rule, OMB staff re-calculated the data using all funds.

Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.

Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.

Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.