Audit 369447

2024-002: Material Weaknesses in Internal Controls over Compliance and Noncompliance—Procurement and Suspension and Debarment, Reporting, and Subrecipient Monitoring. Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number (ALN): 21.027 Federal Agency: Department of Treasury Criteria—Non-Federal entities receiving Federal awards must establish and maintain effective internal controls over the Federal awards in compliance with federal statutes, regulations, and the terms and conditions of the Federal awards. A structured review process is a key element of any effective internal control framework designed to prevent or detect noncompliance. Condition/Context— Reporting: For 1 of the 8 quarterly reports, management could not provide evidence of the review over the quarterly report. For all 8 quarterly reports selected, while expenditure supporting documentation was readily available, management did not retain the underlying reconciliation of expenses used in preparing the quarterly reports. Procurement and Suspension and Debarment: From a sample 6 vendors/subrecipients who the Organization had contracted with, purchased from or made subawards to, under the federal award, management was unable to provide evidence that these vendors/subrecipients were checked for suspension and debarment on SAM.gov prior to entering into transactions with the respective vendors/subrecipients. While management performed these checks, management did not sufficiently retain records of performing the procedures for checking suspension and debarment. Subrecipient Monitoring: From a sample of 4 unique subrecipients in the federal program, with whom DDP entered into subaward contracts management was unable to provide sufficient audit evidence that the risk assessment procedures were performed before the subaward contracts were entered into for all 4 samples. While management performed procedures prior to entering into subaward contracts, management did not sufficiently maintain documentation of risk assessment procedures performed before entering into subaward contracts with the subrecipients. Cause—Due to staffing constraints management did not sufficiently retain records of supporting documents as required under the Uniform Guidance. Effect—The failure to maintain adequate evidence of controls over compliance could lead to noncompliance with grant requirements and cessation of future funding. Questioned Costs—N/A Recommendation—Management should design, implement, and operate controls related to compliance with the terms and conditions set forth in their grant agreements. Documentation of the operation of these controls should be retained. Views of Responsible Officials—See Corrective Action Plan