Audit 326681

Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass-through Entity - Michigan Department of Health and Human Services (MDHHS) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The Organization should have internal controls in place to ensure subrecipient agreements are executed prior to distribution of funds to a subrecipient to ensure proper compliance with the requirements of 2 CFR 200 and as a condition of the grant agreement with MDHHS. Additionally, uniform grant guidance requires a pass-through entity to conduct a formal risk assessment of subrecipient candidates prior to the commencement of a subrecipient relationship. Condition - The Organization has engaged a subrecipient as part of this grant program, which was subsequently determined, but did not have an executed agreement with the subrecipient and as a result did not meet the requirements of having performed formal risk assessment procedures. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Organization identified the subrecipient in the grant application submitted to MDHHS; however, at the time of the grant application submission, the relationship with the subrecipient was not fully determined. A subsequent evaluation of the relationship revealed that the subrecipient met the requirements as a subrecipient and therefore, the Organization failed to execute a formal subrecipient award agreement or conduct a formal risk assessment, as required of identified subrecipients. In addition, although the Organization has an informal process to monitor the subrecipient for costs being charged to the grant, the Organization could not produce documentation to support these process and controls in place. Cause and Effect - The Organization did not have controls in place to ensure these criteria were met. In addition to non compliance with 2 CFR 200 and the terms and conditions of the grant agreement, the monthly Financial Status Reports (FSRs) being filed monthly with MDHHS did not denote any subrecipient dollars being passed through to another entity. Recommendation - The Organization should execute a subrecipient agreement that is in accordance with 2 CFR 200. Views of Responsible Officials and Corrective Action Plan - Management will formalize an executed agreement with the identified subrecipient, and implement formalized policies and procedures to ensure no risk factors for non compliance exist and to properly monitor the subrecipient activity. Management is working with the granting agency to amend the appropriate reporting and budget submissions related to the grant program.

Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass through Entity - Michigan Department of Health and Human Services (MDHHS) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The Organization should have internal controls in place to ensure all reporting requirements in accordance with the uniform grant guidance and terms of the grant agreement with MDHHS are completed timely during the year. Condition - The Organization is required to submit a quarterly narrative report within 30 days following the end of the calendar quarter to the granting agency. The Organization was awarded the grant funds in September 2023 and did not complete the one required narrative reporting requirement due in January 2024. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Organization did not completed required non financial reporting to the granting agency. The Organization has since contact the granting agency and been in discussion with them regarding reporting requirements during fiscal year 2024. Cause and Effect - The Organization did not have controls in place to ensure this criteria was met. The effect is non compliance with 2 CFR 200 and the grant agreement in place with MDHHS. Recommendation - The Organization should implement additional internal controls to ensure all reporting requirements are completed going forward. Views of Responsible Officials and Planned Corrective Actions - Management will implement an update to its review process in order to ensure all required reporting is completed timely, specifically focused on non financial reporting, and has been in communication with the granting agency related to any missing reports related to the narrative reporting requirement.

Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass-through Entity - Michigan Department of Health and Human Services (MDHHS) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The Organization should have internal controls in place to ensure subrecipient agreements are executed prior to distribution of funds to a subrecipient to ensure proper compliance with the requirements of 2 CFR 200 and as a condition of the grant agreement with MDHHS. Additionally, uniform grant guidance requires a pass-through entity to conduct a formal risk assessment of subrecipient candidates prior to the commencement of a subrecipient relationship. Condition - The Organization has engaged a subrecipient as part of this grant program, which was subsequently determined, but did not have an executed agreement with the subrecipient and as a result did not meet the requirements of having performed formal risk assessment procedures. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Organization identified the subrecipient in the grant application submitted to MDHHS; however, at the time of the grant application submission, the relationship with the subrecipient was not fully determined. A subsequent evaluation of the relationship revealed that the subrecipient met the requirements as a subrecipient and therefore, the Organization failed to execute a formal subrecipient award agreement or conduct a formal risk assessment, as required of identified subrecipients. In addition, although the Organization has an informal process to monitor the subrecipient for costs being charged to the grant, the Organization could not produce documentation to support these process and controls in place. Cause and Effect - The Organization did not have controls in place to ensure these criteria were met. In addition to non compliance with 2 CFR 200 and the terms and conditions of the grant agreement, the monthly Financial Status Reports (FSRs) being filed monthly with MDHHS did not denote any subrecipient dollars being passed through to another entity. Recommendation - The Organization should execute a subrecipient agreement that is in accordance with 2 CFR 200. Views of Responsible Officials and Corrective Action Plan - Management will formalize an executed agreement with the identified subrecipient, and implement formalized policies and procedures to ensure no risk factors for non compliance exist and to properly monitor the subrecipient activity. Management is working with the granting agency to amend the appropriate reporting and budget submissions related to the grant program.

Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass through Entity - Michigan Department of Health and Human Services (MDHHS) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The Organization should have internal controls in place to ensure all reporting requirements in accordance with the uniform grant guidance and terms of the grant agreement with MDHHS are completed timely during the year. Condition - The Organization is required to submit a quarterly narrative report within 30 days following the end of the calendar quarter to the granting agency. The Organization was awarded the grant funds in September 2023 and did not complete the one required narrative reporting requirement due in January 2024. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Organization did not completed required non financial reporting to the granting agency. The Organization has since contact the granting agency and been in discussion with them regarding reporting requirements during fiscal year 2024. Cause and Effect - The Organization did not have controls in place to ensure this criteria was met. The effect is non compliance with 2 CFR 200 and the grant agreement in place with MDHHS. Recommendation - The Organization should implement additional internal controls to ensure all reporting requirements are completed going forward. Views of Responsible Officials and Planned Corrective Actions - Management will implement an update to its review process in order to ensure all required reporting is completed timely, specifically focused on non financial reporting, and has been in communication with the granting agency related to any missing reports related to the narrative reporting requirement.