Criteria: The federal award program noted above is not subject to the Treasury-State Cash Management Improvement Act agreement and, as such, is subject to 2 CFR 200.305(b), which states:
“The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.”
2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
The State of Hawaii, Department of Budget and Finance has determined and communicated in Finance Memorandum 20-02 that their standard for an “administratively feasible time period” was 21 calendar days.
Condition: During the testing of the Department’s cash management procedures, it was determined that eight out of sixty payments tested were not distributed within 21 days of the draw down of funds. For the items tested, the time elapsed between draw down and payment ranged from 22 to 44 days.
Context: During the fiscal year ended June 30, 2024, the program expended $9,608,301 (excluding food expenditures).
Cause: The Department draws down federal funds that will be needed based on the expenditures that must be paid. However, since deposits must be posted prior to the processing of payments or disbursing of the funds, it is difficult for the Department to disburse federal funds in accordance with 2 CFR 200.305 (b). Also, the State’s payment process requires all State departments to process payments through DAGS resulting in processing delays.
Effect: Noncompliance with federal regulations could result in a loss of funding that may jeopardize the operations of the Department’s federally funded programs.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-011 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend that the Department work with DAGS and the Department of Budget and Finance to ensure compliance with established standard and timely disbursement of federal funds in accordance with 2 CFR 200.305(b).
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
Effect: Failure to report first-tier subawards of $30,000 or more to FSRS results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-005 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
2 CFR Section 200.327 states that “(financial) information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances.” Under this reporting requirement, the program must submit a Federal Financial Report (FFR) within 90 days after the close of the statutory grant period.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS. We further noted that one FFR was not timely submitted.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
The program was required to submit one FFR during the year. During the audit, we noted that the FFR was submitted 138 days after the close of the statutory grant period.
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
In addition, we noted that the delay in submitting the FFRs was caused by a lack of personnel available to monitor reporting requirements and complete reporting requirements timely.
Effect: Failure to report first-tier subawards of $30,000 or more and failure to timely submit FFRs results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-007 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management be more diligent in following Federal deadlines and grant agreements in order to ensure compliance with Federal requirements. We also recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: 42 USC 300x-9c states that “a state shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset.”
42 USC 300x states that “a state shall expend at least 5 percent of grant funds to support evidence-based programs that address the crisis care needs of individuals with serious mental illnesses (SMI) and children with serious emotional disturbances (SED), which may include individuals experiencing mental health crises demonstrating serious mental illness or serious emotional disturbance, as applicable.
Condition: We noted that the earmarking requirement was not met.
Context: The State shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset. Evidence-based programs are interventions that are guided by the best research evidence with practice-based expertise, cultural competence, and the values of the persons receiving the services that promote individual-level or population-level outcomes. Instead of expending 10 percent of the amount received for a fiscal year, a state may elect to expend not less than 20 percent of such amount by the end of the succeeding fiscal year.
During the audit, we noted that the program expended $145,953 of grant funds for carrying out evidence-based programs, which was $629,057 less than the required amount.
Cause: Based on further inquiry with Department personnel, we noted that the failure to meet earmarking requirements is due to the lack of adequate personnel.
Effect: Failure to meet the required earmarking results in noncompliance with the Earmarking requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend program management be more diligent in monitoring earmarking requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: In accordance with 2 CFR section 200.331, all pass-through entities must 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. In addition, all pass-through entities must 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. To ensure compliance with the Federal requirements, the program has documented monitoring policies and procedures.
Condition: The program did not comply with its documented monitoring procedures, which includes performing on-site visits, desk reviews and/or conducting monthly progress meetings and obtaining and reviewing single audit reports for subrecipients that expend more than $750,000 of Federal funds.
Context: Of a total 10 subrecipient contracts, we selected three contracts based on a non-statistical sample. We noted that for one of the three contracts selected, the required monitoring procedures were not performed.
Of the 10 subrecipient contracts, the program was required to obtain and review a single audit report for one subrecipient that expended more than $750,000 during the year. We noted that the program did not obtain and review a single audit report for the subrecipient.
Cause: Based on further inquiry with Department personnel, we noted that there was a lack of diligence in following the documented monitoring procedures.
Effect: Failure to follow a subrecipient monitoring policy that meets the requirements in 2 CFR section 200.331 results in noncompliance with the subrecipient monitoring requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend that program management follow its documented monitoring procedures for all subrecipient contracts.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
Effect: Failure to report first-tier subawards of $30,000 or more to FSRS results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-010 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: 42 USC 300x-9c states that “a state shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset.”
42 USC 300x states that “a state shall expend at least 5 percent of grant funds to support evidence-based programs that address the crisis care needs of individuals with serious mental illnesses (SMI) and children with serious emotional disturbances (SED), which may include individuals experiencing mental health crises demonstrating serious mental illness or serious emotional disturbance, as applicable.
Condition: We noted that the earmarking requirement was not met.
Context: The State shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset. Evidence-based programs are interventions that are guided by the best research evidence with practice-based expertise, cultural competence, and the values of the persons receiving the services that promote individual-level or population-level outcomes. Instead of expending 10 percent of the amount received for a fiscal year, a state may elect to expend not less than 20 percent of such amount by the end of the succeeding fiscal year.
During the audit, we noted that the program expended $145,953 of grant funds for carrying out evidence-based programs, which was $629,057 less than the required amount.
Cause: Based on further inquiry with Department personnel, we noted that the failure to meet earmarking requirements is due to the lack of adequate personnel.
Effect: Failure to meet the required earmarking results in noncompliance with the Earmarking requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend program management be more diligent in monitoring earmarking requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: In accordance with 2 CFR section 200.331, all pass-through entities must 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. In addition, all pass-through entities must 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. To ensure compliance with the Federal requirements, the program has documented monitoring policies and procedures.
Condition: The program did not comply with its documented monitoring procedures, which includes performing on-site visits, desk reviews and/or conducting monthly progress meetings and obtaining and reviewing single audit reports for subrecipients that expend more than $750,000 of Federal funds.
Context: Of a total 10 subrecipient contracts, we selected three contracts based on a non-statistical sample. We noted that for one of the three contracts selected, the required monitoring procedures were not performed.
Of the 10 subrecipient contracts, the program was required to obtain and review a single audit report for one subrecipient that expended more than $750,000 during the year. We noted that the program did not obtain and review a single audit report for the subrecipient.
Cause: Based on further inquiry with Department personnel, we noted that there was a lack of diligence in following the documented monitoring procedures.
Effect: Failure to follow a subrecipient monitoring policy that meets the requirements in 2 CFR section 200.331 results in noncompliance with the subrecipient monitoring requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend that program management follow its documented monitoring procedures for all subrecipient contracts.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
Effect: Failure to report first-tier subawards of $30,000 or more to FSRS results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-010 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: The federal award program noted above is not subject to the Treasury-State Cash Management Improvement Act agreement and, as such, is subject to 2 CFR 200.305(b), which states:
“The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.”
2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
The State of Hawaii, Department of Budget and Finance has determined and communicated in Finance Memorandum 20-02 that their standard for an “administratively feasible time period” was 21 calendar days.
Condition: During the testing of the Department’s cash management procedures, it was determined that eight out of sixty payments tested were not distributed within 21 days of the draw down of funds. For the items tested, the time elapsed between draw down and payment ranged from 22 to 44 days.
Context: During the fiscal year ended June 30, 2024, the program expended $9,608,301 (excluding food expenditures).
Cause: The Department draws down federal funds that will be needed based on the expenditures that must be paid. However, since deposits must be posted prior to the processing of payments or disbursing of the funds, it is difficult for the Department to disburse federal funds in accordance with 2 CFR 200.305 (b). Also, the State’s payment process requires all State departments to process payments through DAGS resulting in processing delays.
Effect: Noncompliance with federal regulations could result in a loss of funding that may jeopardize the operations of the Department’s federally funded programs.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-011 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend that the Department work with DAGS and the Department of Budget and Finance to ensure compliance with established standard and timely disbursement of federal funds in accordance with 2 CFR 200.305(b).
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
Effect: Failure to report first-tier subawards of $30,000 or more to FSRS results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-005 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
2 CFR Section 200.327 states that “(financial) information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances.” Under this reporting requirement, the program must submit a Federal Financial Report (FFR) within 90 days after the close of the statutory grant period.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS. We further noted that one FFR was not timely submitted.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
The program was required to submit one FFR during the year. During the audit, we noted that the FFR was submitted 138 days after the close of the statutory grant period.
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
In addition, we noted that the delay in submitting the FFRs was caused by a lack of personnel available to monitor reporting requirements and complete reporting requirements timely.
Effect: Failure to report first-tier subawards of $30,000 or more and failure to timely submit FFRs results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-007 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management be more diligent in following Federal deadlines and grant agreements in order to ensure compliance with Federal requirements. We also recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: 42 USC 300x-9c states that “a state shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset.”
42 USC 300x states that “a state shall expend at least 5 percent of grant funds to support evidence-based programs that address the crisis care needs of individuals with serious mental illnesses (SMI) and children with serious emotional disturbances (SED), which may include individuals experiencing mental health crises demonstrating serious mental illness or serious emotional disturbance, as applicable.
Condition: We noted that the earmarking requirement was not met.
Context: The State shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset. Evidence-based programs are interventions that are guided by the best research evidence with practice-based expertise, cultural competence, and the values of the persons receiving the services that promote individual-level or population-level outcomes. Instead of expending 10 percent of the amount received for a fiscal year, a state may elect to expend not less than 20 percent of such amount by the end of the succeeding fiscal year.
During the audit, we noted that the program expended $145,953 of grant funds for carrying out evidence-based programs, which was $629,057 less than the required amount.
Cause: Based on further inquiry with Department personnel, we noted that the failure to meet earmarking requirements is due to the lack of adequate personnel.
Effect: Failure to meet the required earmarking results in noncompliance with the Earmarking requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend program management be more diligent in monitoring earmarking requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: In accordance with 2 CFR section 200.331, all pass-through entities must 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. In addition, all pass-through entities must 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. To ensure compliance with the Federal requirements, the program has documented monitoring policies and procedures.
Condition: The program did not comply with its documented monitoring procedures, which includes performing on-site visits, desk reviews and/or conducting monthly progress meetings and obtaining and reviewing single audit reports for subrecipients that expend more than $750,000 of Federal funds.
Context: Of a total 10 subrecipient contracts, we selected three contracts based on a non-statistical sample. We noted that for one of the three contracts selected, the required monitoring procedures were not performed.
Of the 10 subrecipient contracts, the program was required to obtain and review a single audit report for one subrecipient that expended more than $750,000 during the year. We noted that the program did not obtain and review a single audit report for the subrecipient.
Cause: Based on further inquiry with Department personnel, we noted that there was a lack of diligence in following the documented monitoring procedures.
Effect: Failure to follow a subrecipient monitoring policy that meets the requirements in 2 CFR section 200.331 results in noncompliance with the subrecipient monitoring requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend that program management follow its documented monitoring procedures for all subrecipient contracts.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
Effect: Failure to report first-tier subawards of $30,000 or more to FSRS results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-010 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: 42 USC 300x-9c states that “a state shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset.”
42 USC 300x states that “a state shall expend at least 5 percent of grant funds to support evidence-based programs that address the crisis care needs of individuals with serious mental illnesses (SMI) and children with serious emotional disturbances (SED), which may include individuals experiencing mental health crises demonstrating serious mental illness or serious emotional disturbance, as applicable.
Condition: We noted that the earmarking requirement was not met.
Context: The State shall expend not less than 10 percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset. Evidence-based programs are interventions that are guided by the best research evidence with practice-based expertise, cultural competence, and the values of the persons receiving the services that promote individual-level or population-level outcomes. Instead of expending 10 percent of the amount received for a fiscal year, a state may elect to expend not less than 20 percent of such amount by the end of the succeeding fiscal year.
During the audit, we noted that the program expended $145,953 of grant funds for carrying out evidence-based programs, which was $629,057 less than the required amount.
Cause: Based on further inquiry with Department personnel, we noted that the failure to meet earmarking requirements is due to the lack of adequate personnel.
Effect: Failure to meet the required earmarking results in noncompliance with the Earmarking requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend program management be more diligent in monitoring earmarking requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: In accordance with 2 CFR section 200.331, all pass-through entities must 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. In addition, all pass-through entities must 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. To ensure compliance with the Federal requirements, the program has documented monitoring policies and procedures.
Condition: The program did not comply with its documented monitoring procedures, which includes performing on-site visits, desk reviews and/or conducting monthly progress meetings and obtaining and reviewing single audit reports for subrecipients that expend more than $750,000 of Federal funds.
Context: Of a total 10 subrecipient contracts, we selected three contracts based on a non-statistical sample. We noted that for one of the three contracts selected, the required monitoring procedures were not performed.
Of the 10 subrecipient contracts, the program was required to obtain and review a single audit report for one subrecipient that expended more than $750,000 during the year. We noted that the program did not obtain and review a single audit report for the subrecipient.
Cause: Based on further inquiry with Department personnel, we noted that there was a lack of diligence in following the documented monitoring procedures.
Effect: Failure to follow a subrecipient monitoring policy that meets the requirements in 2 CFR section 200.331 results in noncompliance with the subrecipient monitoring requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: Not applicable
Recommendation: We recommend that program management follow its documented monitoring procedures for all subrecipient contracts.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Criteria: Under 2 CFR Appendix A to Part 170, recipients (i.e., 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). For subaward information, recipients of grants or cooperative agreements are required to report no later than the end of the month following the month in which the obligation was made.
Condition: We noted the program did not report first-tier subawards of $30,000 or more to FSRS.
Context: During the audit, we were informed by Department personnel that required information on first-tier subawards of $30,000 or more were not reported to FSRS, a requirement that is included in the program’s notice of awards. The following table summarizes our findings:
Cause: Due to the timing of when the program was made aware of the prior year finding and the fiscal year end, there was insufficient time to properly implement corrective action. Based on inquiry with Department personnel, we noted that the failure to report first-tier subawards to FSRS was caused by a lack of time and inadequate understanding of FSRS due dates and reporting requirements.
Effect: Failure to report first-tier subawards of $30,000 or more to FSRS results in noncompliance with the reporting requirement.
Questioned Costs: None
Identification as a Repeat Finding, if applicable: See finding 2023-010 included in the Summary Schedule of Prior Audit Findings.
Recommendation: We recommend program management complete the implementation of the policies and procedures related to reporting subawards to FSRS to ensure compliance with Federal requirements.
Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.