Audit 367244

Federal Program – American Rescue Plan Technical Assistance Investment Program – Assistance Listing No. 10.234 – Award No. 2023-70504-40441 – Program Year 2024– U.S. Department of Agriculture Criteria or specific requirement – Cash Management, 2 CFR 200.305 Condition – The organization is required to minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient or the subrecipients in accordance with 2 CFR 200.305. If the organization cannot meet the requirements for advance payment, they must use the reimbursement method. The organization, as a pass-through entity, is also responsible for implementing procedures to ensure the time elapsing between the transfer of Federal funds to the subrecipient and the disbursement of such funds for program purposes by the subrecipient is minimized in accordance with 2 CFR section 200.305(b)(1). Cause – The organization did not have appropriate controls in place to ensure compliance with federal requirements to minimize the time elapsing between receiving and disbursing the federal funds. The organization also did not have appropriate controls in place to ensure the time elapsing between the transfer of federal funds to the subrecipient and the disbursement of funds by the subrecipient for program purposes was minimized. Effect – The organization drew funds, but did not disburse them in a timely manner. Additionally, they passed funds to subrecipients and did not ensure the subrecipients spent those funds timely. Questioned costs – Assistance Listing No. 10.234, FAIN No. 20237050440441: $2,855,333. The amount calculated represents the total federal funding the organization received in advance that had not been expensed for program purposes by the end of the reporting period. Assistance Listing No. 10.234: $741,517. The amount calculated represents the total amount of federal funds passed through to subrecipients for the reporting period. Context – There were no cash draws for the reporting period as the majority of the funding awarded was received in advance in the prior year. Out of a population of 8 subrecipients, 2 subrecipients were selected for testing. Of these subrecipients, both received funding in advance; however, both did not disburse funds under the program purposes within a timely manner. Our sample was not, and was not intended to be, statistically valid. Identification as a repeat finding, if applicable – N/A Recommendation – The organization should put controls in place to ensure that funds are requested and spent timely or move to the reimbursement basis. The organization should put controls in place to ensure that funds passed through to subrecipients are disbursed by the subrecipient for the program within a timely manner. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. Management plans to revise internal procedures to include verification of expenditures for eligible and allowable expenses before initiating a draw request, develop a drawdown checklist and require supporting documentation for incurred costs, retain supporting documentation for all drawdowns, require Executive Director approval prior to all federal drawdowns, and conduct training on federal reimbursement protocols for program and finance staff.

Federal Program – American Rescue Plan Technical Assistance Investment Program – Assistance Listing No. 10.234 – Award No. 2023-70504-40441 – Program Year 2024 – U.S. Department of Agriculture Criteria or specific requirement – Subrecipient Monitoring, 2 CFR 200.332(b), (c) and (e) Condition – The pass-through entity is responsible for identifying the award and applicable requirements to the subrecipient at the time of the subaward providing information described in 2 CFR section 200.332 to ensure the subrecipient uses the federal award in accordance with federal statues, regulations, and the terms and conditions of the award. The pass-through entity is responsible for evaluating each subrecipient’s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. The pass-through entity is responsible for monitoring the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Cause – While the organization did perform certain monitoring procedures, the organization did not have sufficient controls in place to ensure agreements with subrecipients were in compliance with requirements as well as to ensure appropriate monitoring of the subrecipients’ use of funding in accordance with 2 CFR section 200.332. Effect – The organization failed to have agreements with subrecipients that were inclusive of all applicable requirements outlined within 2 CFR section 200.332. The organization did not have sufficient procedures to appropriately monitor the subrecipients’ use of funds within the reporting period. Questioned costs – N/A Context – Out of a population of 8 subrecipients, 2 subrecipients were selected for testing. For the 2 subrecipients, the agreement with the subrecipient was missing information that is required to be communicated with the subrecipient to ensure compliance with federal requirements. Additionally, for the 2 subrecipients, audit reports were not obtained by the pass-through entity during the reporting period to ensure proper use of funding received and proper monitoring of the subaward. Our sample was not and was not intended to be statistically valid. Identification as a repeat finding, if applicable – N/A Recommendation – The organization should ensure agreements with subrecipients include all information required to be communicated to the subrecipient for the subaward. The organization should put controls in place to ensure that monitoring activities are tailored to this risk of each subrecipient and appropriately followed in alignment with what is required. Views of Responsible Officials and Planned Corrective Actions – Management agrees with finding. Management plans to develop a subrecipient monitoring policy aligned with 2 CFR 200.331-333. Management will also standardize agreement templates to include all required clauses for federal award subrecipient agreements, implement a subrecipient risk assessment tool to determine monitoring frequency and risk level identification, and assign staff for annual subrecipient desk reviews or site visits based on risk levels.

Federal Program – American Rescue Plan Technical Assistance Investment Program – Assistance Listing No. 10.234 - Award No. 2023-70504-40441 – Program Year 2024 – U.S. Department of Agriculture Criteria or specific requirement – Reporting, 2 CFR 170 Condition – The organization is responsible for completing reports under the Federal Funding Accountability and Transparency Act (FFATA) for all first-tier subawards. Cause – The organization did not have appropriate controls in place to ensure the required reports to be submitted under FFATA were completed and submitted timely. Effect – The organization failed to complete and submit reports for each sub-award that is required under the Federal Funding Accountability and Transparency Act. Questioned costs – N/A Context – Out of a population of 8 subrecipients, 2 subrecipients were selected for testing. No support was able to be provided for the reports required to be submitted under FFATA for each sub-award. Our sample was not, and was not intended to be, statistically valid. Identification as a repeat finding, if applicable – N/A Recommendation – The organization should put controls and policies in place to ensure that the reports for subawards required under the Federal Funding Accountability and Transparency Act are being completed and submitted within the applicable timeframe. Views of Responsible Officials and Planned Corrective Actions – Management agrees with finding. Management plans to designate a responsible party to oversee FFATA compliance. Management will update award tracking system to recognize and implement procedures for all first-tier subawards for FFATA reporting, incorporate FFATA reporting deadlines into grants calendar, and provide FFATA compliance training and ensure timely access to the reporting website.