Audit 394320

2025-001 Finding – Federal Award Type: Special Reporting - Federal Funding Accountability and Transparency Act (FFATA) – Material Non- Compliance and Material Weakness in Internal Controls over Compliance. (Repeat of finding 2024-002) Identification of Federal Program: AL Number: 64.033 Supportive Services for Veteran Families Criteria / Requirement: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subawards meeting the above definition are to be reported no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition / Context: During the year June 30, 2025, CAT entered into three first-tier subawards greater than $30,000 under AL number 64.033. The auditor tested one of these subawards, noting that the award was reported four days late under the Federal Funding Accountability and Transparency Act to the Federal Subaward Reporting System(FSRS). Per further inquiry, all of the first-tier subawards were reported late, by four days, to FSRS. Cause: CAT was aware of the FFATA reporting requirements, but corrective action was not taken quickly enough to correct the FFATA filing requirement for the year ended June 30, 2025. Procedures were not in place at the beginning of the year, when subawards are entered into, to track and report first-tier subawards within the time frame required by federal requirements. Effect: Failure to maintain sufficient internal controls and proper procedures, related to tracking over reporting firsttier subawards may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures for first-tier subawards including tracking and proper internal control procedures. Management’s Response: Management concurs with the finding and has defined corrective action to address it. We have identified gaps in our reporting processes and worked to implement changes to ensure compliance with special reporting requirements. Policies and procedures will be updated regarding special reporting requirements. The Fiscal department will also be responsible for reviewing all contracts to identify all compliance requirements. Tracking procedures will be implemented to ensure reports are filed timely. The above identified corrective action has been fully implemented for the year ended June 30, 2026. Stacey Wilson, Fiscal Director, has implemented a tracking system for the FFATA.