Audit 364630

2024-001: Internal Control over Compliance with Subrecipient Monitoring and Noncompliance with Subrecipient Monitoring U.S. Department of Health and Human Services; Passed through the State of Tennessee Department of Health: ALN #93.558 Temporary Assistance for Needy Families Federal Award Identification: 68080 Grant Year: 10/1/2020-9/30/2024 Criteria: 2 CFR section 200.332(d) states: 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 written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200-521. Condition and context: The Organization typically requests and reviews subrecipient financial statement audits on an annual basis with annual renewals of contracts. The Temporary Assistance for Needy Families Grant has a three-year grant period. Since subrecipients weren't required to have annual renewals, the Organization did not request or review the annual financial statement audits of subrecipients of this grant. Therefore, the Organization did not comply with the monitoring required by 2CFR section 200.332(d). Cause: The Organization’s internal controls over subrecipient monitoring were not sufficiently designed and implemented to ensure that applicable audits from subrecipients were obtained and reviewed annually. Effect or potential effect: Procedures required by 2 CFR section 200.332(d) related to reviewing financial reports of the subrecipient and following-up on deficiencies pertaining to the Federal award could not completed. The Uniform Guidance audit could have noted findings related to compliance with the spending of the federal assistance that would have been unknown to the Organization. Recommendation: We recommend that the Organization track all subrecipient with federal assistance and establish a process to ensure the financial statement and Uniform Guidance audits are obtained timely and monitoring procedures required by 2 CFR section 200.332(d) are completed. Views of responsible officials: Management acknowledge this finding and will address remediation in the accompanying corrective action plan in Appendix A

2024-001: Internal Control over Compliance with Subrecipient Monitoring and Noncompliance with Subrecipient Monitoring U.S. Department of Health and Human Services; Passed through the State of Tennessee Department of Health: ALN #93.558 Temporary Assistance for Needy Families Federal Award Identification: 68080 Grant Year: 10/1/2020-9/30/2024 Criteria: 2 CFR section 200.332(d) states: 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 written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200-521. Condition and context: The Organization typically requests and reviews subrecipient financial statement audits on an annual basis with annual renewals of contracts. The Temporary Assistance for Needy Families Grant has a three-year grant period. Since subrecipients weren't required to have annual renewals, the Organization did not request or review the annual financial statement audits of subrecipients of this grant. Therefore, the Organization did not comply with the monitoring required by 2CFR section 200.332(d). Cause: The Organization’s internal controls over subrecipient monitoring were not sufficiently designed and implemented to ensure that applicable audits from subrecipients were obtained and reviewed annually. Effect or potential effect: Procedures required by 2 CFR section 200.332(d) related to reviewing financial reports of the subrecipient and following-up on deficiencies pertaining to the Federal award could not completed. The Uniform Guidance audit could have noted findings related to compliance with the spending of the federal assistance that would have been unknown to the Organization. Recommendation: We recommend that the Organization track all subrecipient with federal assistance and establish a process to ensure the financial statement and Uniform Guidance audits are obtained timely and monitoring procedures required by 2 CFR section 200.332(d) are completed. Views of responsible officials: Management acknowledge this finding and will address remediation in the accompanying corrective action plan in Appendix A