Finding Number: 2025-003 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: U.S. Department of the Interior Pass-Through Entity: n/a Grant Number: F24AC01768-00 Award Project Period: July 1, 2024 through July 1, 2029 Control Deficiency Type: Material weakness Instance of Noncompliance: Yes Compliance Requirement: Cash Management Repeat Finding: No Criteria: Under 2 CFR 200.305(b), advance payments must be limited to the minimum amounts needed and timed to be in accordance with the actual, immediate cash requirements of the non Federal entity. Federal funds should not be drawn significantly in advance of when program costs will be incurred. When the non-Federal entity must be paid in advance in should maintain written procedures that minimize the time elapsing between the transfer of funds and disbursement. Further, non-federal entities must maintain advance payments in an interest-bearing account. Condition: The Council drew down a portion of the federal award amount in advance of immediate cash needs. The draw occurred in March 2025 after management determined that a potential federal funding freeze could significantly delay the project if funds were not immediately accessible. The Council typically limits drawdowns to requests for reimbursement; however, management elected to deviate from this practice due to the perceived risk. In addition, the Council does not currently have a written cash management policy compliant with 2 CFR 200, which contributed to the inconsistency. The funds were fully expended on allowable program costs over a nine-month period. The funds were not kept in an interest-bearing account in accordance with 2 CFR 200.305(b). Cause: Management was aware of cash management requirements but made a deliberate decision to draw down the funds in advance due to concerns about a potential funding freeze and the risk of project delays. Effect: Although the funds were ultimately spent on allowable program costs, drawing funds earlier than necessary resulted in noncompliance with federal cash management requirements regarding both the timing of the draws and the requirement to hold advance funds in an interest-bearing account, which may have failed to earn interest that would otherwise be payable to the federal government. Questioned Costs: None. Audit Recommendation: The Council should develop and implement written cash management policies that clearly define allowable timing of drawdowns. When unusual circumstances arise, the Council should obtain authorization from the federal awarding agency before deviating from standard practices. Draws in advance of immediate cash requirements should be kept in an interest-bearing account, and the interest should be remitted to the federal government. Management’s Response: The Rogue River Watershed Council will develop a cash management policy in compliance with 2 CFR 200 (or amend our Fiscal Management Policy to include required cash management policies and procedures). The policy/ amendment will focus on short-term cash flow needs and the need to minimize time between the transfer and disbursement of federal funds, which will guide the organization’s use of federal funding.
Finding Number: 2025-004 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: U.S. Department of the Interior Pass-Through Entity: n/a Grant Number: F24AC01768-00 Award Project Period: July 1, 2024 through July 1, 2029 Control Deficiency Type: Significant deficiency Instance of Noncompliance: Yes Compliance Requirement: Subrecipient monitoring Repeat Finding: No Criteria: Under 2 CFR 200.332 a pass-through entity must: • Evaluate each subrecipient’s risk of compliance to determine appropriate monitoring • Conduct monitoring activities based on risk, which may include reviewing financial and programmatic reports, following up on deficiencies, and verifying that subrecipients have required audits • Verify that subrecipients are not suspended or debarred prior to issuing a subaward • Ensure subrecipients submit required reports timely and comply with federal requirements • Include all applicable requirements imposed, including audit requirements under 2 CFR 200 Subpart F, the subaward • Issue management decisions for audit findings within 6 months of receiving the audit report Condition: The Council did not fully implement the required subrecipient monitoring procedures for its federal subaward. Specifically: • A formal written risk assessment was not performed prior to issuing the subaward. The Council relied on its prior working relationship with and knowledge of the subrecipient on non-federally funded projects rather than evaluating federal compliance risk. • Procurement and suspension/debarment verification were performed after the start of the subaward date. • Monitoring procedures performed were not thoroughly documented • The subaward did not include certain necessary language related the audit requirements under 2 CFR 200, Subpart F Cause: This is the Council’s first experience with awarding federal funds to a subrecipient. Staff relied on familiarity with the subrecipient rather than formalizing and documenting the required federal oversight steps. Effect: Without a documented risk assessment, timely debarment verification, documented monitoring activities, and required subaward language, the Council cannot fully demonstrate that it mitigated the risk of subrecipient noncompliance. This increases the likelihood that federal requirements may not be met or that noncompliance may go undetected. Questioned Costs: None. Audit Recommendation: The Council should strengthen its subrecipient monitoring processes by: • Developing and implementing a formal risk assessment process for all subrecipients of federal funds. • Performing and documenting suspension/debarment checks prior to issuing any subaward. • Reviewing its subaward requirements to ascertain that they include all the applicable requirements • Establishing monitoring procedures that include: • Tracking and reviewing required financial and programmatic reports for timeliness and completeness. • Obtaining and reviewing the subrecipient’s Single Audit or alternative audit documentation. • Issuing management decisions on findings within 6 months • Documenting follow up on any identified issue Management’s Response: Rogue River Watershed Council’s sub-recipient award in 2025 represents our first (and only) such award to date. While we don’t expect any sub-recipient awards in the near future, we will develop a set of procedures guiding such awards including the steps and the required timing for conducting a risk assessment, suspension/ debarment verification, required monitoring procedures, and the required language under 2 CFR 200, Subpart F. These procedures will be contained within a stand-alone policy for sub-recipient awards.
Finding Number: 2025-005 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: U.S. Department of the Interior Pass-Through Entity: n/a Grant Number: F24AC01768-00 Award Project Period: July 1, 2024 through July 1, 2029 Control Deficiency Type: Significant deficiency Instance of Noncompliance: Yes Compliance Requirement: Reporting Repeat Finding: No Criteria: Under 2 CFR Part 170, direct recipients of federal funds must report first tier subawards of $30,000 or more to the Federal Service and Financial Reporting System in SAM.GOV, in accordance with Federal Funding Accountability and Transparency Act (FFATA), no later than the end of the month following the month in which the subaward was made. Required information includes subrecipient identifying data, award amount, and other elements specified by FFATA. Condition: The Council did not submit the required FFATA first tier subaward report for its federal subaward. The subaward met the reporting threshold, but no report was filed in SAM.GOV. Cause: This was the Council’s first year receiving direct federal funding, and staff was not yet familiar with FFATA reporting requirements. The Council did not have written procedures in place to identify when FFATA reporting is required or to ensure timely submission. Effect: Failure to submit the required FFATA report results in incomplete public reporting of federal spending and does not comply with 2 CFR Part 170. This increases the risk of reduced transparency. Questioned Costs: None. Audit Recommendation: The Council should establish procedures to identify when FFATA reporting is required and ensure that all first tier subawards are reported in SAM.GOV within the required timeframe. Staff responsible for federal grants management should receive training on FFATA requirements and incorporate FFATA checks into the federal subaward workflow. Management’s Response: Rogue River Watershed Council’s sub-recipient award in 2025 represents our first (and only) such award to date. We were not aware of the FFATA first-tier subaward report requirements for federal subawards in excess of $30,000. The Sub-Recipient Award Policy that we will develop to address audit finding 2025-004 will include a procedure (or set of procedures) to ensure the reporting of qualifying first-tier subawards to the Federal Service and Financial Reporting System in SAM.gov in accordance with Federal Funding Accountability and Transparency Act (FFATA).
Finding Number: 2025-006 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: The U.S. Department of Interior Pass-Through Entity: n/a Grant Number: F24AC01768-00 Award Project Period: July 1, 2024 through July 1, 2029 Control Deficiency Type: Significant deficiency Instance of Noncompliance: Yes Compliance Requirement: Procurement, suspension and debarment Repeat Finding: No Criteria: A non-federal organization must follow its own documented procurement procedures, provided they comply with applicable state and local laws and align with the federal standards outlined in 2 CFR 200.318–200.327. Specifically, 2 CFR 200.318(i) requires entities to maintain records sufficient to detail the history of the procurement, including but not limited to the rationale for the procurement method chosen, the basis for selecting or rejecting contractors, and the justification for the contract price. In addition, all procurement transactions must be conducted in a manner providing full and open competition. Furthermore, federal requirements prohibit grant recipients from contracting with, or purchasing from, contractors who are suspended and debarred from doing business with the federal government. Whenever the organization enters into contracts or purchases goods or services with federal funds that it expects to equal or exceed $25,000, it must verify that the contractor or vendor has not been suspended, debarred or otherwise excluded. Finally, the organization must ensure that all federal programs comply with Section 70914 of the Build America, Buy America (BABA) Act for infrastructure projects. Condition: The Council has enacted a written procurement policy, which management believed met all the standards required under 2 CFR 200.318 through 200.327. However, the policy failed to include some of the most stringent requirements included in the Uniform Guidance. The organization did not comply with all the documentation requirements laid out in its procurement policy. In addition, the suspension and debarment verification occurred after the contract was entered into, and there was no documentation maintained to demonstrate the monitoring of contract compliance with BABA. Cause: This was the Council’s first year receiving direct federal funding and its first Single Audit. The organization is very small and has limited prior experience with federal procurement requirements. Effect: The absence of aligned written procurement policies and timely documentation increases the risk of non-compliance with federal procurement standards. While no unallowable costs were identified and the contractor was not suspended or debarred, the issues reflect a control deficiency in procurement documentation, suspension and debarment procedures, and monitoring of federal award requirements. Questioned Costs: None. Audit Recommendation: We recommend the Council: • Update its procurement policy to align with federal procurement methods, thresholds, and requirements. • Develop written procedures for technical evaluations, contractor selection, and documentation of procurement decisions. • Perform suspension and debarment verification prior to contract award. • Establish monitoring procedures for contractor compliance with federal award provisions, including Build America, Buy America Act requirements. Management’s Response: Rogue River Watershed Council will review 2 CFR 200.318 through 200.327 and update our Procurement Policy to meet the necessary standards. We will strengthen our policy by setting out procedures related to, when required: (1) suspension/ debarment verification of contractors (including the timing of such verification) and (2) required agreement language related to grant-required stipulations such as BABA requirements, monitoring, compliance, and documentation.