Audit 408447

Finding No. 2025-001: Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency over Major Program and Compliance. Federal Program Name: Juvenile Mentoring Program Pass-through Entity: None Federal Assistance Listing Number: 16.726 Criteria Title 2 U.S. Code of Federal Regulations Part 200 includes the requirement that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives. Condition The Partnership allocates employees’ payroll costs to grants based on an estimate. Although the payroll allocation is periodically reviewed and revised, differences from actual time and effort can result due to an estimate being used. Cause Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Documentation of personnel expenses should support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Effect The employee time and payroll costs that are charged to the grant could differ from the actual time and payroll costs expended in support of the grant activities. Questioned Costs Unknown. Context The recipient's system of internal controls should include processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Recommendation We recommend that the Partnership develop, implement and maintain a system of internal controls to support the proper tracking and allocation of wages to federal awards. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.

Finding No. 2025-002: Subrecipient Monitoring and Procurement and Suspension and Debarment – Noncompliance Federal Program Name: Juvenile Mentoring Program Pass-through Entity: None Federal Assistance Listing Number: 16.726 Criteria Uniform Guidance requires that non-Federal entities ensure that they do not make subawards to entities that are suspended or debarred from participating in Federal programs. Recipients and subrecipients are subject to the non-procurement suspension and debarment regulations set forth in 2 CFR §200.214 and 2 CFR Part 180, which restrict the issuance of Federal awards and subawards to excluded parties. Condition During the audit period, the Partnership issued subawards to subrecipients; however, the Partnership’s current subrecipient policies are missing several critical elements, including procedures to verify that subrecipients are not suspended or debarred by the federal government, requirements to pass applicable federal special conditions down to subrecipient awards, methods to track the total amount of funding provided to subrecipients under each federal program, processes to ensure that payments to subrecipients minimize the time between the transfer of federal funds from the grantee and disbursement to the subrecipient, a risk-based monitoring approach, and an on-site monitoring process that includes reviews of financial and administrative aspects of the program, among other areas. Cause The Partnership had not previously developed or updated its subrecipient monitoring policies to fully align with the requirements of Uniform Guidance. Management relied on informal practices and staff knowledge rather than comprehensive, documented procedures to address suspension and debarment verification, subaward compliance requirements, cash management, and risk-based monitoring. In addition, limited compliance resources and the absence of a centralized compliance review process contributed to gaps in policy development and implementation during the audit period. Effect Without verification of suspension and debarment status, the Partnership is at risk of making subawards to entities that are ineligible to receive Federal funds. This could result in questioned costs, required repayment of Federal funds, or other sanctions imposed by the Federal awarding agency or pass-through entity. Questioned Costs None noted. Context Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR 200.318 through 200.327 and must follow the subrecipient monitoring and management standards set out at 2 CFR 200.331 through 200.333. They must use their own documented procurement and subrecipient monitoring procedures, which reflect applicable state and local laws and regulations, provided that the procurements and subawards conform to applicable federal statutes and the procurement and subrecipient monitoring requirements identified in 2 CFR Part 200. Recommendation We recommend that the Partnership implement written policies and procedures to ensure that all subrecipients are verified as not suspended or debarred prior to the execution of subawards. Acceptable methods of verification include reviewing SAM.gov exclusion listings, obtaining written certifications from subrecipients, or incorporating suspension and debarment representations into subaward agreements. Documentation of the verification should be retained in accordance with record retention requirements. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.

Finding No. 2025-003: Period of Performance – Noncompliance Federal Program Name: Juvenile Mentoring Program Pass-through Entity: None Federal Assistance Listing Number: 16.726 Type of Finding Significant Deficiency in Internal Controls over Compliance Other Matters Criteria Uniform Guidance requires that only costs incurred during the approved period of performance are allowable and chargeable to a federal award set forth in 2CFR §200.403, Factors Affecting Allowability of Costs, and §200.309, Period of Performance. Costs incurred prior to the final approval of the program budget must have appropriate written authorization from the awarding agency to be considered allowable. The Department of Justice requires receipt of final approved program and budget documentation before costs can be charged to the award. Condition The Partnership incurred and charged program costs to the federal award prior to receiving final program budget approval from the Department of Justice. Specifically, $25,706 in program costs were incurred from October 1, 2022 through April 25, 2023, as the final budget approval was granted on April 26, 2023. Cause The Partnership did not have adequate internal controls to ensure that program expenditures were incurred during the approved time frame. Program and fiscal staff did not verify the award and budget approval status prior to authorizing or charging costs to the award. Effect The Partnership charged costs to the federal award outside of the approved period of performance, resulting in noncompliance with Uniform Guidance and award requirements. This resulted in questioned or disallowed costs, required repayment of federal funds, and potential impacts on future federal funding. Questioned Costs Costs charged to the grant during fiscal year 2023 prior to the final approval of the program budget on April 26, 2023 are considered disallowed and amount to $25,706. Context Uniform Guidance requirements set forth in 2CFR §200.403, Factors Affecting Allowability of Costs, and §200.309, Period of Performance, state that only costs incurred during the approved period of performance are allowable and chargeable to a federal award. The Partnership must obtain formal budget approval from the federal agency prior to incurring costs to the program. Repeat Finding No