Audit 368873

Criteria or Specific Requirement: 2 CFR 200.303(a) states that a nonfederal entity must "Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the term and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Proper review and approval of reimbursement requests submitted to SPDA and financial as well as progress report submitted to all funders were not retained. Questioned Costs: None Context: In statistically valid samples, CliftonLarsonAllen LLP (CLA) tested eight reimbursement requests for cash management testing, five reimbursement request for indirect cost testing, four quarterly financial reports for matching, four performance reports for reporting, and five quarterly financial reports for reporting testing. Context: (Continued) All five reimbursement requests tested for cash management testing related to the funder SPDA and lacked sufficient documentation of review, although there was substantiating evidence of review, including meeting invite emails. One of five reimbursement requests tested for indirect costs testing related to the funder SPDA and lacked sufficient documentation of review, although there was substantiating evidence of review, including meeting invite emails. All reports tested for matching and reporting testing lacked sufficient documentation of review, although substantiating evidence, including meeting invite emails, were retained. Cause: Lack of adequate knowledge about what is considered sufficient review documentation. Effect: Without adequate controls in place to ensure reimbursement requests and financial/progress reports are accurate, there is an increased risk in inaccurate reimbursement requests as well as reports, which could result in misappropriation of funds. Repeat Finding: No Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence obtained and retained by SFP as proof of oversight of expenditure of federal funds. This could include: signatures on reports, emails indicating review and approval from appropriate individuals, retention of meeting agendas and minutes to corroborate that review occurred during the meetings, etc. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Per 2 CFR 200.332(b), Pass-through entities are responsible for identifying all the information in the subaward agreement to the subrecipients to provide reasonable assurance that subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Condition: The sole subaward issued under the federal program lacked key information identifying the recipient as a subrecipient of federal funding. Questioned Costs: None Context: There was only one subrecipient and subaward agreement lacking the key information outlined in 2 CFR 200.332(b). This subrecipient was started by former SFP employees and contractors and was only later split off as a separate legal entity. The intermingled nature of the original relationship of the subrecipient’s projects lead to the lack of formalized information in the subaward. Cause: Lack of adequate knowledge about the information required to be included in subaward agreements, per Uniform Guidance requirements. Effect: A lack of clear identification of federal funding in a subaward could lead to a subrecipient misunderstanding the nature of the funding sources it receives and the corresponding single audit requirements. Repeat Finding: No Recommendation: CLA recommends amending existing subaward agreements to include the award information required by CFR 200.332(b) and to verify all future subawards agreements include all necessary information prior to issuance. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: 2 CFR Part 200 Sections 200.212 and 200.318(h) and per 2 CFR Section 180.300 and 48 CFR Section 52.209-6, organizations must have procedures for verifying that an entity with which hit plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: There was a lack of evidenced to support that a suspension and debarment check was performed prior to entering into a covered transaction. Questioned Costs: None Context: Out of five covered transactions tested, for one vendor, documentation was not retained showing selected entity was checked for suspension and debarment prior to entering into the covered transactions. However, CLA checked the vendor in SAM.gov and noted the vendor is not federally suspended nor debarred. Cause: Inconsistent application of internal policies related to suspension and debarment, and inconsistent retention of supporting documentation. Effect: Inconsistent application of internal suspension and debarment policies could lead to the selection of vendors that are federally suspended and debarred. Repeat Finding: Recommendation: CLA recommends SFP perform suspension and debarment checks prior to entering into the covered transactions paid for with federal funding and to retain documentation evidencing that those checks were performed timely. Increased training may help reinforce the policies and requirements regarding suspension and debarment checks and documentation retention. Views of Responsible Officials: There is no disagreement with the audit finding.