Audit 368022

Criteria or Specific Requirements: In accordance with 2 CFR §170, prime awardees awarded a federal grant are required to file a Federal Funding Accountability and Transparency Act (FFATA) subaward report by the end of the month following the month in which the prime awardee obligates any subaward equal to or greater than $30,000. This requirement also applies when a modification increases the Federal funding obligation of a subaward to an amount that equals or exceeds $30,000. Further, the Organization is subject to financial reporting requirements. In accordance with 2 CFR §200.328, Federal Financial Reports (FFR) must be submitted at the frequency required by the terms and conditions of the award. Condition: During the review of reporting compliance for the major programs, it was determined that the Organization did not file the FFATA reports for program 98.001 within the required timeframe. Specifically, there were two modifications during the year under audit that increased the Federal funding obligation of the subaward by $30,000 or more, and both reports were filed after the month following the month in which the modifications were made, contrary to FFATA requirements. We examined two of the four required federal financial reports and all required FFATA filings, and the only exceptions identified were in the FFATA filings. Cause: Internal controls over financial reporting were not operating effectively to ensure FFATA reports were filed in a timely manner. In addition, management was not fully aware of the specific FFATA reporting requirements applicable to prime awardees. Effect: Failure to submit the FFATA report by the end of the month following the obligation of a subaward of $30,000 or more results in noncompliance with 2 CFR §170. Perspective Information: None. Questioned Costs: None. Repeat Finding: None. Recommendations: We recommend that management and relevant staff participate in training specifically on FFATA reporting requirements to ensure a clear understanding of obligations and deadlines. In addition, management should formalize and document procedures for FFATA reporting, such as maintaining a calendar of due dates, assigning responsibility for preparation and review, and implementing a sign-off process to confirm timely submission. The previous audit firm did not find this to be an issue, and we were told that reporting to FFATA was needed once a year for the previous year’s disbursements and that is what we have done. Now we will report every time we pass the $30,000 disbursement to a subrecipient.