Audit 405852

Criteria or Specific Requirements: In accordance with the terms and conditions of ALN 66.424 and ALN 66.446, reimbursement requests are required to be submitted by the 10th day of the month following the month in which expenditures were incurred. Effective internal controls should be designed and implemented to ensure reimbursement requests are prepared, reviewed, and submitted within the required timeframe. Condition: During testing of cash management compliance for ALN 66.424 and ALN 66.446, it was noted that the Organization did not have effective controls in place to ensure reimbursement requests subject to the agreement requirements were consistently submitted by the required deadline. Of 18 reimbursement requests tested that were required to be submitted by the 10th day of the following month, four reimbursement requests were submitted after the required deadline. Cause: The Organization had not established internal controls to ensure reimbursement requests were submitted in accordance with grant-specific reimbursement deadlines. Specifically, the Organization did not have procedures in place to monitor reimbursement due dates or ensure reimbursement requests were prepared and submitted by the required deadline. Effect: Failure to submit reimbursement requests within the required timeframe results in noncompliance with the cash management requirements established by the grant agreements. Untimely reimbursement requests may delay the receipt of federal funds and increase the risk that grant requirements are not met. Questioned Costs: Questioned costs were not identified. Perspective information: During testing of cash management compliance, 22 reimbursement requests were tested across multiple awards. Of the 22 reimbursement requests tested, 18 were subject to subrecipient agreement requirements requiring submission by the 10th day of the following month. Four of the 18 reimbursement requests subject to this requirement were submitted after the required deadline. Repeat Finding: None. Recommendations: We recommend that management establish and document procedures to ensure reimbursement requests are prepared, reviewed, and submitted by the required deadline. Such procedures should include maintaining a grant compliance calendar identifying submission due dates, assigning responsibility for preparation and review, implementing supervisory review prior to submission, and retaining documentation evidencing timely submission. Management should also periodically monitor compliance with reimbursement deadlines to ensure controls are operating effectively.

Criteria or Specific Requirements: In accordance with 2 CFR Part 180 and 2 CFR 200.214, non-Federal entities are prohibited from entering into covered transactions with parties that are suspended or debarred from participating in Federal programs. Prior to entering into a covered transaction, entities should verify that subrecipients are not suspended or debarred through SAM.gov, obtaining a certification from the subrecipient, or another method permitted by the regulations. Effective internal controls should be designed and implemented to ensure compliance with suspension and debarment requirements. Condition: The Organization did not maintain documented evidence demonstrating that suspension and debarment verification procedures were performed for covered transactions with vendors and subrecipients. Per inquiry with the Director of Finance and Operations, the Organization requires subrecipients to self-report their suspension and debarment status as part of the annual risk assessment process; however, the Organization does not perform or document independent verification procedures, such as reviewing SAM.gov, to confirm subrecipient eligibility. In addition, the Organization did not retain documentation evidencing that SAM.gov verification was performed prior to vendor selection, as management indicated such documentation had not previously been requested. Cause: Internal controls over suspension and debarment compliance were not designed and operating effectively to ensure that suspension and debarment verification procedures were independently performed and documented for covered transactions. Specifically, the Organization relied on self-certifications and informal verification procedures and did not maintain evidence demonstrating that suspension and debarment reviews were completed in accordance with Federal requirements. Effect: Failure to independently verify and document the suspension and debarment status of vendors and subrecipients increases the risk that the Organization could enter into covered transactions with ineligible entities, resulting in noncompliance with Federal requirements. Questioned Costs: Questioned costs were not identified. Perspective Information: During testing of suspension and debarment compliance, seven vendors and two subrecipients were selected for testing. The Organization was unable to provide documentation demonstrating that independent suspension and debarment verification procedures had been performed for the entities selected. As a result, we independently verified the suspension and debarment status of the vendors and subrecipients through SAM.gov and confirmed that none of the entities tested were suspended or debarred. No instances of noncompliance were identified. Repeat Finding: None. Recommendations: We recommend that management establish and document procedures requiring suspension and debarment verification for all covered transactions with vendors and subrecipients. Such procedures should include performing and retaining evidence of SAM.gov verification (or another method permitted by Federal regulations) prior to entering into covered transactions. Management should also incorporate supervisory review procedures to ensure suspension and debarment verifications are completed and documented in accordance with Federal requirements.