Audit 408826

Significant Deficiency – Lack of risk assessment over subrecipient Agency: Department of Health and Human Services ALN# 93.592 - Family Violence Prevention and Services/Discretionary Grants Grant Year: 2025 Grant Numbers: 90EV054301C6; 90EV052301C6; 90EV056003; 90EV0459-04 Criteria: Per 2 CFR §200.332(b), pass-through entities are required to evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. This evaluation is necessary to determine the appropriate level of monitoring. Risk factors may include prior experience, results of previous audits, personnel or system changes, and results of federal monitoring. Condition: The Organization passed-through funding to two subrecipients without documenting a risk assessment over the entities’ possible noncompliance. Cause: Management has not established or implemented formal policies and procedures to ensure subrecipient risk assessments are performed in accordance with Uniform Guidance requirements. Additionally, there is a lack of oversight controls to verify completion and documentation of the risk assessment process. Possible Effect: Without performing and documenting subrecipient risk assessments, the Organization runs the risk that monitoring procedures are not appropriately tailored to the level of risk. This increases the likelihood that noncompliance with Federal requirements may occur and remain undetected. Questioned Costs: None. Perspective: Statistical sampling was not used, however, sampling methodology followed AICPA guidelines. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization develop and implement formal policies and procedures to ensure that risk assessments are performed for all subrecipients at the time of subaward and updated as necessary. The process should include documented consideration of required risk factors in accordance with 2 CFR §200.332(b) and should be used to determine the appropriate level and frequency of monitoring activities. Management’s Response (unaudited): See Corrective Action Plan.

Significant Deficiency – Unsupported use of sole source procurement Agency: Department of Justice ALN# 16.582 - Crime Victim Assistance/Discretionary Grants Grant Year: 2025 Grant Numbers: 15POVC-22-GK-01804-NONF; 15POVC-25-GK-00736-NONF; 15POVC-25-GK-00728-NONF; 15POVC-23-GK-02220-NONF Agency: Department of Health and Human Services ALN# 93.592 - Family Violence Prevention and Services/Discretionary Grants Grant Year: 2025 Grant Numbers: 90EV054301C6; 90EV052301C6; 90EV056003; 90EV0459-04 Criteria: Under 2 CFR 200.320(c), noncompetitive (sole source) procurement is only permitted when at least one of the following federally allowable circumstances exists: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section;) (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. Condition: During testing of procurement transactions, two of the three tested were procured using a noncompetitive (sole source) method without documentation supporting any of the allowable criteria under 2 CFR 200.320(c). Cause: The auditee indicated the following reasons for using a noncompetitive (sole source) procurement method: • Management based the sole source decision on the consultant’s extensive professional experience, subject matter expertise, and prior leadership roles in nonprofit training, technical assistance, and organizational development. • Management concluded that the consultant’s depth and breadth of experience, familiarity with federal technical assistance systems, and proven effectiveness could not be easily replicated by another individual. The justification emphasized the consultant’s ability to respond immediately to complex technical assistance needs without additional onboarding, citing efficiency and continuity of service delivery as key considerations However, while these operational considerations explain the decision, they do not meet the specific federally allowable justifications for noncompetitive procurement under 2 CFR 200.320(c). This indicates a lack of understanding of federal sole source rules and insufficient procurement controls to ensure federal criteria are evaluated and documented prior to vendor selection. Potential Effect: The absence of federally required justification increases the risk of unfair vendor selection, creates the appearance of partiality, and exposes federal funds to risk of disallowance. Questioned Costs: None. Perspective: Statistical sampling was not used, however, sampling methodology followed AICPA guidelines. Repeat Finding: Not a repeat finding. Recommendation: Strengthen procurement controls, including documentation requirements and provide training on procurement regulations to ensure all noncompetitive procurements meet 2 CFR 200.320(c) criteria. Management’s Response (unaudited): See Corrective Action Plan.