Audit 363920

Subrecipient Monitoring – Material Weakness Federal Program: AL 11.307 – Economic Adjustment Assistance Criteria: A good system of internal controls allows for the compliance with Uniform Guidance to monitor funds that are passed through to subrecipients and the continued stewardship of those federal dollars. Condition: For the four-month period from September 1, 2024 through December 31, 2024, we discussed the policies and procedures in effect for the Chamber Foundation employees to adequately monitor the subrecipients under the Economic Adjustment Assistance Grant. Although the policies and procedures in effect during the four-month period from September 1, 2024 through December 31, 2024 were appropriately designed, they were not completed throughout the year. Cause: There was a general misunderstanding on the process of completing subrecipient monitoring controls throughout the year. Effect: Noncompliance will not be prevented, or detected and corrected in a timely manner. Questioned costs: None Recommendation: The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over EDA policies and procedures would allow for better clarity and understanding. Views of Responsible Officials: Management recognizes the deficiency and plans to implement the auditor’s recommendations. Indication of Repeat finding: This is a repeat finding of August 31, 2024 - 002 from the prior year.

Federal Program: AL 11.307 – Economic Adjustment Assistance Criteria: Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (The Chamber Foundation) must perform certain activities to ensure that the subrecipient uses funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes review of independent audits of subrecipients and response to deficiencies detected through audits (2 CFR section 200.331(f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition: For the four-month period from September 1, 2024 through December 31, 2024, we reviewed the Foundation’s subrecipient internal controls, requesting supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Unform Guidance for subrecipient monitoring and per the Foundation’s internal controls could not be substantiated or were determined to not have occurred during the year under audit. Cause: Due to internal control deficiency noted in 2024-001, the subrecipient monitoring requirement was not in compliance during the year. Context: Of the federal expenditures under the program noted, $91,125 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with the Chamber Foundation staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the four subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the four subawards awarded to pass-through entities, one was missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient’s unique entity identifier. Effect: Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Questioned costs: None Recommendation: The Foundation should request yearly audit reports as determined by 2 CFR 200. Additionally, the entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials: Management recognizes the deficiency and plans to implement the auditor’s recommendations. Indication of Repeat Finding: This is a repeat finding of August 31, 2024 - 003 from the prior year.

Subrecipient Monitoring – Material Weakness Federal Program: AL 11.307 – Economic Adjustment Assistance Criteria: A good system of internal controls allows for the compliance with Uniform Guidance to monitor funds that are passed through to subrecipients and the continued stewardship of those federal dollars. Condition: For the four-month period from September 1, 2024 through December 31, 2024, we discussed the policies and procedures in effect for the Chamber Foundation employees to adequately monitor the subrecipients under the Economic Adjustment Assistance Grant. Although the policies and procedures in effect during the four-month period from September 1, 2024 through December 31, 2024 were appropriately designed, they were not completed throughout the year. Cause: There was a general misunderstanding on the process of completing subrecipient monitoring controls throughout the year. Effect: Noncompliance will not be prevented, or detected and corrected in a timely manner. Questioned costs: None Recommendation: The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over EDA policies and procedures would allow for better clarity and understanding. Views of Responsible Officials: Management recognizes the deficiency and plans to implement the auditor’s recommendations. Indication of Repeat finding: This is a repeat finding of August 31, 2024 - 002 from the prior year.

Federal Program: AL 11.307 – Economic Adjustment Assistance Criteria: Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (The Chamber Foundation) must perform certain activities to ensure that the subrecipient uses funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes review of independent audits of subrecipients and response to deficiencies detected through audits (2 CFR section 200.331(f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition: For the four-month period from September 1, 2024 through December 31, 2024, we reviewed the Foundation’s subrecipient internal controls, requesting supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Unform Guidance for subrecipient monitoring and per the Foundation’s internal controls could not be substantiated or were determined to not have occurred during the year under audit. Cause: Due to internal control deficiency noted in 2024-001, the subrecipient monitoring requirement was not in compliance during the year. Context: Of the federal expenditures under the program noted, $91,125 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with the Chamber Foundation staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the four subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the four subawards awarded to pass-through entities, one was missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient’s unique entity identifier. Effect: Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Questioned costs: None Recommendation: The Foundation should request yearly audit reports as determined by 2 CFR 200. Additionally, the entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials: Management recognizes the deficiency and plans to implement the auditor’s recommendations. Indication of Repeat Finding: This is a repeat finding of August 31, 2024 - 003 from the prior year.