Audit 399165

2023-004 Material Weakness in Internal Control over Subrecipient Monitoring Compliance and Noncompliance – Repeat Identification of federal program: 64.033 VA Support Services for Veteran Families Program Award 20-AK-152 Department of Veterans Affairs Criteria: Per Part 3 of the Uniform Guidance Compliance Supplement, A pass-through entity (PTE) must: - Identify the Award and Applicable Requirements- clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award. - Evaluate Risk - evaluate each subrecipient's risk of noncompliance for the purpose of determining the appropriate subrecipient monitoring related to the subaward. - Monitor - monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Condition: In fiscal year ended March 31, 2022 as well as the 15 month period ended June 30, 2023, the Organization was able to provide invoices submitted that were reviewed in order for payments to be made to the subrecipients providing monitoring of the activities of the subrecipients but still were not evaluating the risk related to debarment of the subrecipients. Cause: The Organization has had turnover in all management positions since the fiscal year ended March 31, 2021 and into 2022; where they began making changes that took time to implement. Prior management did not maintain complete or accurate files and current management was working on addressing the issues as they became known. Effect or potential effect: The Organization’s current management was unable to provide records showing that the evaluation of subrecipients was performed. Questioned Costs: None Context: The Organization entered into 3 subawards during the period under audit. The sub awardees were approved in the SSVF program budget by the federal agency. During the current period the auditor reviewed the agreements and noted there was no supporting documentation showing that the Organization had evaluated the risk of the sub awardees. Identification of Repeat Finding: 2022-005 Recommendation: We recommend that as a part of the Organization’s internal control structure over compliance subrecipients that the Organization is entering into agreements with, they establish procedures to ensure federal subrecipient risk evaluation is completed and maintained. Views of Responsible Officials: Management agrees with finding. See Corrective Action Plan