Audit 395703

Allowable Costs/Cost Principles ALN Number and Name: 93.243 Substance Abuse and Mental Health Services-Projects of Reginal and Nation Significance Award Number and Year: 1H79SM088601-001, 09/30/2023-09/29/2024 Federal Agency: U.S. Department of Health and Human Services Condition: During our test of disbursements for allowable costs/cost principles, we discovered that the subrecipient transactions tested did not contain sufficient supporting documentation for the disbursements to the subrecipients. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E-Cost Principles Section 200.403 states that costs must be adequately documented in order to be allowable under federal awards. Cause: Management maintains the supporting documentation was originally submitted supporting the disbursements to the subrecipients, however, the vendor invoices and payroll reports with evidence of actual time spent on the grant could not be located upon request. Instances were noted where salary expense charged by the subrecipient was based on a percentage of the grant budgets as opposed to being based on actual payroll records. Effect: A total of $24,652 of subrecipient expenditures lacked sufficient supporting documentation. Recommendation: Strengthen policies and procedures to ensure all documents submitted supporting disbursements to subrecipients, including vendor invoices and payroll reports with evidence of actual time spent on the grant, are properly retained in order to support the allowability of the expenditures. Questioned Costs: $24,652 Views of responsible Officials and planned Corrective Action: The Organization agrees with the finding and will strengthen its policies and procedures to ensure all documents submitted supporting disbursements to subrecipients, including vendor invoices and payroll reports with evidence of actual time spent on the grant, are properly retained in order to support the allowability of the expenditures.

Subreceipient Monitoring ALN Number and Name: 93.243 Substance Abuse and Mental Health Services-Projects of Reginal and National Significance Award Number and Year: 1H79SM088601-01, 09/30/2023 - 09/29/2024; H79SM088601-01 M001, 09/30/2024 - 09/29/2025 Federal Agency: U.S. Department of Health and Human Services Condition: The Organization did not monitor subrecipient activities for program requirements and audit requirements at least annually. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Subpart D Subrecipient Monitoring, Section 332 (e) Requirements for Pass-through Entities states that a pass-through entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. (3) Resolve audit findings specifically related to the subaward and issue a management decision for audit findings pertaining to the federal award provided to the subrecipient. (4) Verify that a subrecipient is audited as required by 2 CFR part 200, Subpart F. Cause: The Organization does not have written policies and procedures for monitoring subrecipients. Effect: The subrecipients may not be operating the program in accordance with the terms and conditions of the subaward which could lead to the failure of the subrecipients to meet the goals and objectives of the subaward, thus leading to questioned costs. Recommendation: Establish written policies and procedures for monitoring subrecipients to ensure they are complying with the terms and conditions of the subaward. Questioned Cost: Not determinable. Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the finding and will establish written policies and procedures for monitoring subrecipients to ensure they are complying with the terms and conditions of the subaward.

FFATA Reporting ALN Number and Year: 1H79SM0888601-01, 09/30/2023-09/29/2024; H79SM088601-01 M001, 09/30/2024-09/30/2025 Federal Agency: U.S. Department of Health and Human Services Condition: The Organization failed to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Criteria: 2 CFR Part 170 Reporting Subawards and Executive Compensation requires grant recipients to report first-tier subawards resulting in an obligation of $30,000 or more in federal funds to the Federal Funding Accountablity and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Cause: Inadequate policies and procedures exist which lead to the noncompliance. Effect: Two subawards totaling $219,623 for 1H79SM088601-01 and $267,495 for H79SM088601-01 M001, respectively, both of which were greater than $30,000 were not reported in accordance with the criteria. Recommendation: Establish policies and procedures to ensure reporting of first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) on a timely basis. Questioned Cost: None Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the finding an will establish policies and procedures to ensure reporting of first-tier subawards of $30,000 or more to the Federal Funding and Transparency Act Subaward Reporting System (FSRS).

Performance Reporting ALN Number and Name: 93.243 Substance Abuse and Mental Health Services-Projects of Reginal and National Significance Award Number and Year: 1H79SM088601-01, 09/30/2023-09/29/2024 Federal Agency: U.S. Department of Health and Human Services Condition: The Organization failed to submit the Annual Programmatic Progress Report as required by the Federal agency. Criteria: 2 CFR Part 200 Subpart D Performance and Financial Monitoring and Reporting requires grant recipients to submit performance reports as required by the Federal award. According to the Federal award agreement, the Programmatic Progress Report is required to be filed on an annual basis and must be submitted as a PDF to the View Terms Tracking Details page in the eRA Commons System no later than 90 days after the end of each 12-month budget period. Cause: Inadequate policies and procedures exist which lead to the noncompliance. Effect: The Annual Programmatic Progress Report which was due on December 28, 2024 was not submitted as required by the Federal agency. Recommendation: Establish policies and procedures to ensure submission of the Annual Programmatic Progress Report an a timely basis. Questioned Cost: None. Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the finding and will establish policies and procedures to ensure submission of the Annual Programmatic Progress Report on a timely basis.

Matching, Level of Effort, Earmarking ALN Number and Name: 14.267 Continuum of Care Rapid Rehousing Program Award Number and Year: WV0124L3E012308, 08/01/2024-10/31/2025 U.S. Department of Housing and Urban Development Condition: The sources of $105,678 of matching funds required by the Continuum of Care (COC) program were not documented and tracked with a match log. Criteria: The COC Rule section 578.103 REcordkeeping Section (a)(11) Match requires that the recipient must keep records of the source and use of contributions made to satisfy the match requiredment in section 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. The records must show how the value placed on third party in-kind contributions was derived. Cause: The Organization does not have sufficient written policies and procedures to support the COC program's matching requirements. Effect: The sources and amounts of the matching funds were not verifiable to support the 25 percent matching requirement. Recommendation: Strengthen policies and procedures over documentation and tracking of matching funds to ensure that funds used to satisfy the matching requirement are verifiable under the laws governing the funds. Questioned Costs: Not Determinable Views of Responsible Official and Planned Corrective Action: The Organization agrees with the finding and will strengthen policies and procedures over documenting and tracking of matching funds to ensure that funds used to satisfy the matching requirement are verifiable under the laws governing the funds.