Audit 365313

Federal Agency: United States Department of Commerce Federal Program Name: Office for Coastal Management Assistance Listing Number: 11.473 Federal Award Identification Year: 2020 Pass-Through Agency: National Fish and Wildlife Grant Agreement Award Period: 9/1/20-08/02/24 Compliance Requirement Affected: Subrecipient Suspension & Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: For two subrecipient samples that were selected, verification of subrecipient's suspension or debarment status was not verified. Context: A nonstatistical sample of 2 of 4 subrecipients were selected for testing for the Office for Coastal Management program. Condition noted above was identified during our procedures over subrecipients. Effect: CFSC did not verify suspension or debarment status, which could result in naming a subrecipient as an award recipient, which is potentially suspended or debarred. Cause: CFSC did not consistently ensure that Suspension or Debarment status was verified before naming the subrecipients tested as award recipients. Repeat Finding: The finding is a repeat finding. Recommendation: We recommend that CFSC strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for each subrecipient applicant during its pre-award subrecipient screening process. Management’s Views: See separate corrective action plan.

Federal Agency: United States Department of Commerce Federal Program Name: Office for Coastal Management Assistance Listing Number: 11.473 Federal Award Identification Year: 2020 Pass-Through Agency: National Fish and Wildlife Grant Agreement Award Period: 9/1/20-08/02/24 Compliance Requirement Affected: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria: 2 CFR 200.332(d) - establishes that the auditee 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. Condition: CFSC did not perform risk assessment for all subrecipients selected for testing. CFSC was unable to provide supporting documentation to show that they inquired with the subrecipients about any audits they had undergone or evidence that CFSC received and reviewed audit reports to ensure timely follow ups were made if any findings pertaining to the Federal Award was noted. Context: A nonstatistical sample of 2 out of 4 subrecipients were selected for testing for the Office for Coastal Management program. The condition noted above was identified during our procedures over CFSC’s subrecipients. Effect: CFSC did not perform the following, which increases the risk of noncompliance: -Required risk assessments for the subrecipients, -Review subrecipient audit reports to ensure compliance with Federal Awards or make any necessary follow-ups pertaining to any findings noted, if any. Cause: CFSC’s procedures did not consistently ensure that the required risk assessments were performed. Repeat Finding: The finding is a repeat finding. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that all required risk assessments are performed in accordance with the criteria outlined above. Management’s Views: See separate corrective action plan.

Federal Agency: United States Department of Agriculture, Forest Service Federal Program Name: Cooperative Forestry Assistance Assistance Listing Number: 10.664 Federal Award Identification Year: 2021 Pass-Through Agency: N/A Award Period: 09/01/21-08/31/26 Compliance Requirement Affected: Subrecipient Suspension & Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: For one subrecipient samples that was selected, verification of subrecipient's suspension or debarment status was not verified. Context: A nonstatistical sample of 5 out of 13 subrecipients were selected for testing for the Office for Coastal Management program. The condition noted above was identified during our procedures over CFSC’s subrecipients. Effect: CFSC did not verify suspension or debarment status, which could result in naming a subrecipient as an award recipient, which is potentially suspended or debarred. Cause: CFSC did not consistently ensure that Suspension or Debarment status was verified before naming the subrecipients tested as award recipients. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that CFSC strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for each subrecipient applicant during its pre-award subrecipient screening process. Management’s Views: See separate corrective action plan.

Federal Agency: United States Department of Agriculture, Forest Service Federal Program Name: Cooperative Forestry Assistance Assistance Listing Number: 10.664 Federal Award Identification Year: 2021 Pass-Through Agency: N/A Award Period: 09/01/21-08/31/26 Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonmaterial Noncompliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: For five hourly employees, CFSC performed a review of payroll discrepancies occurring between 2020- 2024, due to differences when comparing time recorded on time sheets to time recorded to payroll, which resulted in a non-significant payment made to back to the employees. Questioned Costs: The known questioned costs are $8,600. Context: A nonstatistical sample of 60 out of >250 employee pay periods were selected for testing for the Cooperative Forestry Assistance program. The condition noted above was identified during our procedures over CFSC’s payroll disbursements. Effect: CFSC's internal controls did not include thorough review of time entry when processing payroll, which can result in understatement of payroll expense. Cause: CFSC's internal controls did not include thorough review of time entry when processing payroll.

Federal Agency: United States Department of Commerce Federal Program Name: Office for Coastal Management Assistance Listing Number: 11.473 Federal Award Identification Year: 2020 Pass-Through Agency: National Fish and Wildlife Grant Agreement Award Period: 9/1/20-08/02/24 Compliance Requirement Affected: Subrecipient Suspension & Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: For two subrecipient samples that were selected, verification of subrecipient's suspension or debarment status was not verified. Context: A nonstatistical sample of 2 of 4 subrecipients were selected for testing for the Office for Coastal Management program. Condition noted above was identified during our procedures over subrecipients. Effect: CFSC did not verify suspension or debarment status, which could result in naming a subrecipient as an award recipient, which is potentially suspended or debarred. Cause: CFSC did not consistently ensure that Suspension or Debarment status was verified before naming the subrecipients tested as award recipients. Repeat Finding: The finding is a repeat finding. Recommendation: We recommend that CFSC strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for each subrecipient applicant during its pre-award subrecipient screening process. Management’s Views: See separate corrective action plan.

Federal Agency: United States Department of Commerce Federal Program Name: Office for Coastal Management Assistance Listing Number: 11.473 Federal Award Identification Year: 2020 Pass-Through Agency: National Fish and Wildlife Grant Agreement Award Period: 9/1/20-08/02/24 Compliance Requirement Affected: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria: 2 CFR 200.332(d) - establishes that the auditee 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. Condition: CFSC did not perform risk assessment for all subrecipients selected for testing. CFSC was unable to provide supporting documentation to show that they inquired with the subrecipients about any audits they had undergone or evidence that CFSC received and reviewed audit reports to ensure timely follow ups were made if any findings pertaining to the Federal Award was noted. Context: A nonstatistical sample of 2 out of 4 subrecipients were selected for testing for the Office for Coastal Management program. The condition noted above was identified during our procedures over CFSC’s subrecipients. Effect: CFSC did not perform the following, which increases the risk of noncompliance: -Required risk assessments for the subrecipients, -Review subrecipient audit reports to ensure compliance with Federal Awards or make any necessary follow-ups pertaining to any findings noted, if any. Cause: CFSC’s procedures did not consistently ensure that the required risk assessments were performed. Repeat Finding: The finding is a repeat finding. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that all required risk assessments are performed in accordance with the criteria outlined above. Management’s Views: See separate corrective action plan.

Federal Agency: United States Department of Agriculture, Forest Service Federal Program Name: Cooperative Forestry Assistance Assistance Listing Number: 10.664 Federal Award Identification Year: 2021 Pass-Through Agency: N/A Award Period: 09/01/21-08/31/26 Compliance Requirement Affected: Subrecipient Suspension & Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.403(a) - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: For one subrecipient samples that was selected, verification of subrecipient's suspension or debarment status was not verified. Context: A nonstatistical sample of 5 out of 13 subrecipients were selected for testing for the Office for Coastal Management program. The condition noted above was identified during our procedures over CFSC’s subrecipients. Effect: CFSC did not verify suspension or debarment status, which could result in naming a subrecipient as an award recipient, which is potentially suspended or debarred. Cause: CFSC did not consistently ensure that Suspension or Debarment status was verified before naming the subrecipients tested as award recipients. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that CFSC strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for each subrecipient applicant during its pre-award subrecipient screening process. Management’s Views: See separate corrective action plan.

Federal Agency: United States Department of Agriculture, Forest Service Federal Program Name: Cooperative Forestry Assistance Assistance Listing Number: 10.664 Federal Award Identification Year: 2021 Pass-Through Agency: N/A Award Period: 09/01/21-08/31/26 Compliance Requirement Affected: Allowable Costs & Activities (Payroll) Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonmaterial Noncompliance Criteria: 2 CFR 200.403(a) - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Condition: For five hourly employees, CFSC performed a review of payroll discrepancies occurring between 2020- 2024, due to differences when comparing time recorded on time sheets to time recorded to payroll, which resulted in a non-significant payment made to back to the employees. Questioned Costs: The known questioned costs are $8,600. Context: A nonstatistical sample of 60 out of >250 employee pay periods were selected for testing for the Cooperative Forestry Assistance program. The condition noted above was identified during our procedures over CFSC’s payroll disbursements. Effect: CFSC's internal controls did not include thorough review of time entry when processing payroll, which can result in understatement of payroll expense. Cause: CFSC's internal controls did not include thorough review of time entry when processing payroll.