Audit 387721

Finding 2025-001 Subrecipient Monitoring Federal Agency: U.S. Department of Health and Human Services Program Title: Birth Defects and Developmental Disabilities Assistance Listing Number: 93.073 Compliance Requirement: Subrecipient monitoring Criteria: Internal control surveys are to be conducted by the Foundation to evaluate and document each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the Federal Subaward for the purpose of determining the appropriate level of subrecipient monitoring required. In addition, if a subrecipient's single audit disclosed any findings, the Foundation should consider updating its risk assessment to determine if any adjustments are needed in the subrecipient's risk level and also ensure that it issues management decisions on the subrecipient’s findings within six months. Condition: The Foundation did not perform internal control surveys and did not document monitoring procedures surrounding follow up on corrective actions of subrecipients with audit findings in their respective single audit reports. Cause: Staffing challenges and other organizational changes resulted in the Foundation not completing certain subrecipient monitoring activities during the year ended June 30, 2025. Effect: Subrecipients expenditures may not be in compliance with federal or grant award provisions. Questioned Cost: None Context: Elements noted above for subrecipient monitoring were not consistently followed throughout the year as evidenced in our sample. We noted four out of five subrecipients tested did not have internal control surveys completed due to the cause noted above. None of our sample items had single audits with audit findings, however the enhanced monitoring response to any single audit findings was not found to have been completed for any subrecipients during the period of May-October 2025 due to the staffing challenges noted above. Recommendation: The Foundation should ensure that established policies and procedures are in place to ensure proper subrecipient monitoring activities are adhered to and if there are delays in performing certain key tasks that a plan with a timeline be developed to address when missed tasks will be completed. Management Response: The Foundation concurs with this finding. Corrective Action Plan: See attached management’s corrective action plan.