Audit 377413

Finding 2025 - 001 Lack of Subrecipient Monitoring Procedures – Subrecipient Risk Assessments Federal Agencies: U.S. Department of State and U.S. Agency for International Development Federal Programs: Bureau of Population, Refugees and Migration Overseas Refugee Assistance Programs East Asia; Foreign Assistance for Programs Overseas Assistance Listing Numbers:19.523 and 98.001 Pass-through Entities: JSI Research & Training Institute, Inc. and RTI International Award Identification Number and Year: SPRMCO24CA0083, 2024; 7200AA22CA00011, 2022 and 72066923CA00003, 2023 Criteria or Specific Requirement: According to 2 CFR § 200.332(c), pass-through entities are required to: “Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.” This risk assessment must consider factors such as the subrecipient’s prior experience with similar awards, results of previous audits, new personnel or systems, and the extent of Federal monitoring. Condition: BRAC USA did not adequately document the results of it's risk assessment procedures of its subrecipients prior to issuing subawards, as required by 2 CFR § 200.332(c). During our review of two subawards issued during the audit period, we noted that management did not formally document any evaluation of subrecipient risk related to program compliance, financial stability, or internal controls. Cause: The entity had not developed or implemented formal procedures to adequately document subrecipient risk prior to making subawards. Management was not aware of the documentation requirement or had not prioritized its implementation. Effect or Potential Effect: Without documenting subrecipient risk assessments, BRAC USA cannot ensure that the level of subrecipient monitoring is appropriate to mitigate risks of noncompliance or misuse of Federal funds. This increases the likelihood of unallowable costs, noncompliance with Federal regulations, and potential questioned costs. Questioned Costs: Costs associated with qualitative monitoring measures are not identifiable. Context: During our audit, we examined subawards for two subgrantees for which total expenditures aggregated $1,683,098 (approximately 67% of the total Federal expenditures passed through to subrecipients). Identification as a Repeat Finding, if applicable: Not a repeat findingRecommendation: The entity should establish and implement written procedures to perform and document subrecipient risk assessments prior to awarding Federal funds. The procedures should include standardized criteria—such as prior audit results, experience with similar programs, financial stability, and management capacity—to determine risk levels and guide monitoring activities.

Finding 2025 - 002 Untimely Submission of Federal Reports Federal Agencies: U.S. Agency for International Development Federal Programs: Foreign Assistance for Programs Overseas Assistance Listing Numbers: 98.001 Pass-through Entities: JSI Research & Training Institute, Inc. and RTI International Award Identification Number and Year: 7200AA22CA00011, 2022 and 72066923CA00003, 2023 Criteria or Specific Requirement: Per 2 CFR § 200.328(b)(1), recipients are required to submit performance and financial reports “no less frequently than annually and no more frequently than quarterly” and “not later than 30 calendar days after the reporting period end date for quarterly or semi-annual reports, and 90 calendar days for annual or final reports” unless otherwise specified by the Federal agency or pass-through entity. Timely submission ensures the awarding agency has current and accurate information to monitor the recipient’s financial performance and compliance. Condition: During our testing of BRAC USA's compliance with Federal reporting requirements, we noted that required Federal Financial and Programmatic Reports were not submitted to the passthrough entities within the time frames specified in the grant terms and conditions. Specifically, 3 of 4 reports tested were submitted between 8 and 10 days after the required due dates.Cause: The delinquent submissions occurred because of delays in reconciliation of financial data and support provided by BRAC USA's subrecipients which contributed to the late filings. Effect or Potential Effect: Failure to submit required financial reports on time reduces transparency and impairs the Federal awarding agency’s ability to effectively monitor grant performance. Continued noncompliance may result in sanctions, delayed payments, or other administrative actions by the Federal agency. Questioned Costs: Costs associated with qualitative monitoring measures are not identifiable. Context: During our audit, we examined three financial reports and one programmatic report. We noted 2 of the 3 financial reports and the programmatic report were late. Identification as a Repeat Finding, if applicable: Not a repeat finding Recommendation: BRAC USA should strengthen internal controls over Federal reporting to ensure timely submission of required financial reports. This should include, establishing a reporting calendar with due dates and reminders, assigning responsibility for preparation and review of reports, and implementing a secondary review process to verify timely submission and accuracy. The recommendations should also be communicated to BRAC USA's subrecipients to ensure any required financial or programmatic data is submitted in a timely manner.