See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined the Benefit Accuracy Measurement (BAM) summary report and identified minimum cases and timeliness requirements were not met regarding paid and denied claims. Criteria Pursuant to 20 CFR Part 602, the BAM system requires the State department to complete a minimum number of unemployment cases timely in order to maintain a current database. The required number of cases and the timeliness percentages for completing paid and denied claims are as follows: Paid Claims Minimum cases: 480 paid cases Timeliness percentages: Complete 70% within 60 days, 95% within 90 days, and 98% within 120 days Denied Claims Minimum cases: 450 denied cases (150 cases for each category: monetary, separation and non separation) Timeliness percentages: Complete 60% within 60 days, 85% within 90 days, and 98% within 120 days Effect Failure to meet timeliness requirements prevents the granting agency from maintaining a current database. Cause and View of Responsible Officials Due to the COVID 19 pandemic, the department was significantly impacted with an increase in unemployment claims. Furthermore, the department experienced a staffing shortage and was unable to process the minimum number of cases and/or investigate cases within a timely manner. Recommendation We recommend that the State department develop new policies and procedures to handle the increase in unemployment claims and follow existing policies and procedures established to comply with claim handling requirements.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we selected a non statistical sample of fifty benefit payments made during the year and identified three payments where the recipients did not make the minimum number of work search contacts. Criteria Pursuant to State Handbook of Unemployment Benefits, the following requirements must be met to become eligible for benefit payments: 1) Be totally or partially unemployed; 2) File an application to establish an unemployment insurance claim; 3) File a claim certification on a weekly or bi-weekly basis to request payment of benefits; 4) Register for work with the State Workforce Development Division; 5) Participate in re employment services; 6) Be physically and mentally able to work; 7) Be ready and willing to seek and accept work by making three or more work search contacts every week; 8) Serve a one week waiting period; and 9) Report for interviews. Effect Failure to comply with the eligibility requirements results in noncompliance with the terms of the award and may result in recapture of funds by the awarding agency. Cause and View of Responsible Officials The department experienced a staffing shortage and was unable to investigate cases within a timely manner. Recommendation We recommend that the State department follow the policies and procedures established to comply with eligibility requirements. Furthermore, we recommend that the department formalize any modifications to the work search requirements used in practice as allowed under HRS Section 12 5 34.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined the Benefit Accuracy Measurement (BAM) summary report and identified minimum cases and timeliness requirements were not met regarding paid and denied claims. Criteria Pursuant to 20 CFR Part 602, the BAM system requires the State department to complete a minimum number of unemployment cases timely in order to maintain a current database. The required number of cases and the timeliness percentages for completing paid and denied claims are as follows: Paid Claims Minimum cases: 480 paid cases Timeliness percentages: Complete 70% within 60 days, 95% within 90 days, and 98% within 120 days Denied Claims Minimum cases: 450 denied cases (150 cases for each category: monetary, separation and non separation) Timeliness percentages: Complete 60% within 60 days, 85% within 90 days, and 98% within 120 days Effect Failure to meet timeliness requirements prevents the granting agency from maintaining a current database. Cause and View of Responsible Officials Due to the COVID 19 pandemic, the department was significantly impacted with an increase in unemployment claims. Furthermore, the department experienced a staffing shortage and was unable to process the minimum number of cases and/or investigate cases within a timely manner. Recommendation We recommend that the State department develop new policies and procedures to handle the increase in unemployment claims and follow existing policies and procedures established to comply with claim handling requirements.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we selected a non statistical sample of fifty benefit payments made during the year and identified three payments where the recipients did not make the minimum number of work search contacts. Criteria Pursuant to State Handbook of Unemployment Benefits, the following requirements must be met to become eligible for benefit payments: 1) Be totally or partially unemployed; 2) File an application to establish an unemployment insurance claim; 3) File a claim certification on a weekly or bi-weekly basis to request payment of benefits; 4) Register for work with the State Workforce Development Division; 5) Participate in re employment services; 6) Be physically and mentally able to work; 7) Be ready and willing to seek and accept work by making three or more work search contacts every week; 8) Serve a one week waiting period; and 9) Report for interviews. Effect Failure to comply with the eligibility requirements results in noncompliance with the terms of the award and may result in recapture of funds by the awarding agency. Cause and View of Responsible Officials The department experienced a staffing shortage and was unable to investigate cases within a timely manner. Recommendation We recommend that the State department follow the policies and procedures established to comply with eligibility requirements. Furthermore, we recommend that the department formalize any modifications to the work search requirements used in practice as allowed under HRS Section 12 5 34.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of three subawards and noted untimely evaluation of the subrecipients? risk of noncompliance for two subawards. Criteria 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints in Office of Federal Awards Management (OFAM), the program personnel were unable to perform the subrecipients? risk of noncompliance in a timely manner. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of two subawards and found no evidence of evaluation of the subrecipients? risk of noncompliance at the time of the subawards. Criteria 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints in OFAM, the program personnel were unable to perform the subrecipients? risk of noncompliance in a timely manner. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we tested a non statistical sample of two subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (?FFATA?) was completed. See Schedule of Findings and Questioned Costs for chart/table. Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials Program personnel were unable to file the FFATA reports due to the Federal Award Identification Number (FAIN) not being available on the FFATA Subaward Reporting System (FSRS), a federal government website. Recommendation As the error appears to be caused by the FSRS, we recommend that program management continue to monitor the status of the FSRS and file the necessary FFATA reports when enabled.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined three haphazardly selected cash disbursements and identified two instances totaling approximately $15,500,000 in which the time elapsing between the receipt of federal award and the disbursement was greater than 25 days. While the expenditures were allowable costs under the grant, it does not appear the State disbursed these federal advances as soon as administratively feasible. Criteria 31 CFR Section 205.33 requires the State to minimize the time between the receipt of federal funds from the federal government and the State?s disbursement of the funds for federal program purposes. Therefore, the timing and amount of funds being requested and received must be as close as administratively feasible to the State?s actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. Based on our testing, we determined 25 days to be a reasonable period of time to disburse cash after receipt from the federal government. Effect Without minimizing time between the drawdown and disbursement of federal funds, the State is not in compliance with federal requirements. Cause and View of Responsible Officials The lag in disbursing the funds was attributed to the U.S. Department of the Treasury providing the State an upfront lump sum advance to administer the program. Recommendation As the exceptions were caused by a lump sum advance provided from the U.S. Department of the Treasury, we recommend that program management contact the awarding agency to obtain best practices for cash management.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of seven subawards and found no evidence of evaluation of the subrecipients? risk of noncompliance at the time of the subaward for one of the subawards tested. Criteria 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints within OFAM, program personnel were unable to perform the subrecipient?s risk of noncompliance in a timely matter. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200, which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State department?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we tested a non statistical sample of seven subawards and found no evidence indicating that program personnel verified whether any of the contractors were not federally suspended or debarred. Criteria According to 2 CFR 200.214, regulations restrict awards, subawards and contracts with certain parties that are debarred, suspended, or otherwise excluded from, ineligible from, or ineligible for participation in federal assistance programs or activities. Therefore, verification is required that either checks the System for Award Management (SAM), an official website for the U.S. Government, collects a certification from the contractor, or adds a clause or condition to the contract. Effect Without evaluating the contractors? status on the SAM before executing agreements, the State may pass through federal funding to ineligible entities. Cause and View of Responsible Officials Program personnel responsible for procurement indicated that a review for the federal SAM website was performed prior to the execution of the contract, however, no formal documentation of the review was retained. Recommendation We recommend that program management retain evidence of the suspension and debarment review, including who performed the procedure and the date performed, prior to entering into the agreement.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of two subawards and found no evidence that evaluations of the subrecipients? risk of noncompliance and applicable federal award information was communicated to the subrecipients at the time of the subawards. Criteria 2 CFR Section 200.332(a) requires subawards to clearly identify information, such as the FAIN, identification of whether the award is R&D, period of performance, and indirect cost. 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related the subaward. Effect By not including the required information in the subaward, subrecipients may have trouble complying with federal grant requirements. Furthermore, without evaluating the subrecipient?s risk of noncompliance and determining appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Program personnel improperly determined first-tier subrecipients resulting in applicable federal award information not being communicated in the subawards and not assessing the subrecipients? risk of noncompliance not being performed. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State?s responsibilities as a pass-through entity are fulfilled, including providing subrecipients all applicable federal award information and performing a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. The risk evaluation may include consideration of the following factors: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of two subawards and found no evidence of consultation with private school officials. Criteria Section 1117(a)(4)(A) of the Elementary and Secondary Education Act requires that a recipient must provide equitable services to students and teachers in private schools as determined in consultation with private school officials. Effect Without evidence of program personnel?s consultation with private school officials, the State is unable to support its assertion of compliance with federal requirements. Cause and View of Responsible Officials Program personnel indicated a consultation meeting took place; however, no formal documentation was retained. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements and retain necessary documentation to comply with federal program requirements.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we tested a non statistical sample of four subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA was completed for three subawards and one instance of untimely submission. See Schedule of Findings and Questioned Costs for chart/table. Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials Due to changes in program personnel, there was miscommunication between the parties responsible for filing the FFATA reports. Recommendation We recommend that program personnel ensure that required FFATA reports are filed timely.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of six subawards and found no evidence of evaluation of any of the subrecipients? risk of noncompliance at the time of the subaward. Furthermore, the most recent Single Audit report for one of the subrecipients selected for testing was not reviewed by program personnel for any potential findings. Criteria Per 2 CFR Section 200.332(b), a pass-through entity is required to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring procedures related to the subaward. Per 2 CFR Section 200.332(d), a pass-through entity is required to monitor the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. Monitoring must include a review of financial performance reports, following up with the subrecipient to ensure timely and appropriate action on all deficiencies, issuing management decision for applicable audit findings, resolving audit findings, and verifying that each subrecipient is audited as required by 2 CFR 200, Subpart F. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to changes in personnel responsibilities, there was miscommunication between the parties responsible for evaluating the risk of noncompliance. Furthermore, the Single Audit report for one of the subrecipients was not reviewed due to oversight as the program personnel was unaware that the subrecipient is separately audited. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State department?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward was audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency).
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined the Benefit Accuracy Measurement (BAM) summary report and identified minimum cases and timeliness requirements were not met regarding paid and denied claims. Criteria Pursuant to 20 CFR Part 602, the BAM system requires the State department to complete a minimum number of unemployment cases timely in order to maintain a current database. The required number of cases and the timeliness percentages for completing paid and denied claims are as follows: Paid Claims Minimum cases: 480 paid cases Timeliness percentages: Complete 70% within 60 days, 95% within 90 days, and 98% within 120 days Denied Claims Minimum cases: 450 denied cases (150 cases for each category: monetary, separation and non separation) Timeliness percentages: Complete 60% within 60 days, 85% within 90 days, and 98% within 120 days Effect Failure to meet timeliness requirements prevents the granting agency from maintaining a current database. Cause and View of Responsible Officials Due to the COVID 19 pandemic, the department was significantly impacted with an increase in unemployment claims. Furthermore, the department experienced a staffing shortage and was unable to process the minimum number of cases and/or investigate cases within a timely manner. Recommendation We recommend that the State department develop new policies and procedures to handle the increase in unemployment claims and follow existing policies and procedures established to comply with claim handling requirements.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we selected a non statistical sample of fifty benefit payments made during the year and identified three payments where the recipients did not make the minimum number of work search contacts. Criteria Pursuant to State Handbook of Unemployment Benefits, the following requirements must be met to become eligible for benefit payments: 1) Be totally or partially unemployed; 2) File an application to establish an unemployment insurance claim; 3) File a claim certification on a weekly or bi-weekly basis to request payment of benefits; 4) Register for work with the State Workforce Development Division; 5) Participate in re employment services; 6) Be physically and mentally able to work; 7) Be ready and willing to seek and accept work by making three or more work search contacts every week; 8) Serve a one week waiting period; and 9) Report for interviews. Effect Failure to comply with the eligibility requirements results in noncompliance with the terms of the award and may result in recapture of funds by the awarding agency. Cause and View of Responsible Officials The department experienced a staffing shortage and was unable to investigate cases within a timely manner. Recommendation We recommend that the State department follow the policies and procedures established to comply with eligibility requirements. Furthermore, we recommend that the department formalize any modifications to the work search requirements used in practice as allowed under HRS Section 12 5 34.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined the Benefit Accuracy Measurement (BAM) summary report and identified minimum cases and timeliness requirements were not met regarding paid and denied claims. Criteria Pursuant to 20 CFR Part 602, the BAM system requires the State department to complete a minimum number of unemployment cases timely in order to maintain a current database. The required number of cases and the timeliness percentages for completing paid and denied claims are as follows: Paid Claims Minimum cases: 480 paid cases Timeliness percentages: Complete 70% within 60 days, 95% within 90 days, and 98% within 120 days Denied Claims Minimum cases: 450 denied cases (150 cases for each category: monetary, separation and non separation) Timeliness percentages: Complete 60% within 60 days, 85% within 90 days, and 98% within 120 days Effect Failure to meet timeliness requirements prevents the granting agency from maintaining a current database. Cause and View of Responsible Officials Due to the COVID 19 pandemic, the department was significantly impacted with an increase in unemployment claims. Furthermore, the department experienced a staffing shortage and was unable to process the minimum number of cases and/or investigate cases within a timely manner. Recommendation We recommend that the State department develop new policies and procedures to handle the increase in unemployment claims and follow existing policies and procedures established to comply with claim handling requirements.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we selected a non statistical sample of fifty benefit payments made during the year and identified three payments where the recipients did not make the minimum number of work search contacts. Criteria Pursuant to State Handbook of Unemployment Benefits, the following requirements must be met to become eligible for benefit payments: 1) Be totally or partially unemployed; 2) File an application to establish an unemployment insurance claim; 3) File a claim certification on a weekly or bi-weekly basis to request payment of benefits; 4) Register for work with the State Workforce Development Division; 5) Participate in re employment services; 6) Be physically and mentally able to work; 7) Be ready and willing to seek and accept work by making three or more work search contacts every week; 8) Serve a one week waiting period; and 9) Report for interviews. Effect Failure to comply with the eligibility requirements results in noncompliance with the terms of the award and may result in recapture of funds by the awarding agency. Cause and View of Responsible Officials The department experienced a staffing shortage and was unable to investigate cases within a timely manner. Recommendation We recommend that the State department follow the policies and procedures established to comply with eligibility requirements. Furthermore, we recommend that the department formalize any modifications to the work search requirements used in practice as allowed under HRS Section 12 5 34.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of three subawards and noted untimely evaluation of the subrecipients? risk of noncompliance for two subawards. Criteria 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints in Office of Federal Awards Management (OFAM), the program personnel were unable to perform the subrecipients? risk of noncompliance in a timely manner. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of two subawards and found no evidence of evaluation of the subrecipients? risk of noncompliance at the time of the subawards. Criteria 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints in OFAM, the program personnel were unable to perform the subrecipients? risk of noncompliance in a timely manner. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we tested a non statistical sample of two subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (?FFATA?) was completed. See Schedule of Findings and Questioned Costs for chart/table. Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials Program personnel were unable to file the FFATA reports due to the Federal Award Identification Number (FAIN) not being available on the FFATA Subaward Reporting System (FSRS), a federal government website. Recommendation As the error appears to be caused by the FSRS, we recommend that program management continue to monitor the status of the FSRS and file the necessary FFATA reports when enabled.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined three haphazardly selected cash disbursements and identified two instances totaling approximately $15,500,000 in which the time elapsing between the receipt of federal award and the disbursement was greater than 25 days. While the expenditures were allowable costs under the grant, it does not appear the State disbursed these federal advances as soon as administratively feasible. Criteria 31 CFR Section 205.33 requires the State to minimize the time between the receipt of federal funds from the federal government and the State?s disbursement of the funds for federal program purposes. Therefore, the timing and amount of funds being requested and received must be as close as administratively feasible to the State?s actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. Based on our testing, we determined 25 days to be a reasonable period of time to disburse cash after receipt from the federal government. Effect Without minimizing time between the drawdown and disbursement of federal funds, the State is not in compliance with federal requirements. Cause and View of Responsible Officials The lag in disbursing the funds was attributed to the U.S. Department of the Treasury providing the State an upfront lump sum advance to administer the program. Recommendation As the exceptions were caused by a lump sum advance provided from the U.S. Department of the Treasury, we recommend that program management contact the awarding agency to obtain best practices for cash management.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of seven subawards and found no evidence of evaluation of the subrecipients? risk of noncompliance at the time of the subaward for one of the subawards tested. Criteria 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints within OFAM, program personnel were unable to perform the subrecipient?s risk of noncompliance in a timely matter. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200, which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State department?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we tested a non statistical sample of seven subawards and found no evidence indicating that program personnel verified whether any of the contractors were not federally suspended or debarred. Criteria According to 2 CFR 200.214, regulations restrict awards, subawards and contracts with certain parties that are debarred, suspended, or otherwise excluded from, ineligible from, or ineligible for participation in federal assistance programs or activities. Therefore, verification is required that either checks the System for Award Management (SAM), an official website for the U.S. Government, collects a certification from the contractor, or adds a clause or condition to the contract. Effect Without evaluating the contractors? status on the SAM before executing agreements, the State may pass through federal funding to ineligible entities. Cause and View of Responsible Officials Program personnel responsible for procurement indicated that a review for the federal SAM website was performed prior to the execution of the contract, however, no formal documentation of the review was retained. Recommendation We recommend that program management retain evidence of the suspension and debarment review, including who performed the procedure and the date performed, prior to entering into the agreement.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of two subawards and found no evidence that evaluations of the subrecipients? risk of noncompliance and applicable federal award information was communicated to the subrecipients at the time of the subawards. Criteria 2 CFR Section 200.332(a) requires subawards to clearly identify information, such as the FAIN, identification of whether the award is R&D, period of performance, and indirect cost. 2 CFR Section 200.332(b) requires a pass-through entity to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related the subaward. Effect By not including the required information in the subaward, subrecipients may have trouble complying with federal grant requirements. Furthermore, without evaluating the subrecipient?s risk of noncompliance and determining appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Program personnel improperly determined first-tier subrecipients resulting in applicable federal award information not being communicated in the subawards and not assessing the subrecipients? risk of noncompliance not being performed. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State?s responsibilities as a pass-through entity are fulfilled, including providing subrecipients all applicable federal award information and performing a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. The risk evaluation may include consideration of the following factors: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of federal awarding agency monitoring.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of two subawards and found no evidence of consultation with private school officials. Criteria Section 1117(a)(4)(A) of the Elementary and Secondary Education Act requires that a recipient must provide equitable services to students and teachers in private schools as determined in consultation with private school officials. Effect Without evidence of program personnel?s consultation with private school officials, the State is unable to support its assertion of compliance with federal requirements. Cause and View of Responsible Officials Program personnel indicated a consultation meeting took place; however, no formal documentation was retained. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements and retain necessary documentation to comply with federal program requirements.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we tested a non statistical sample of four subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA was completed for three subawards and one instance of untimely submission. See Schedule of Findings and Questioned Costs for chart/table. Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials Due to changes in program personnel, there was miscommunication between the parties responsible for filing the FFATA reports. Recommendation We recommend that program personnel ensure that required FFATA reports are filed timely.
See Schedule of Findings and Questioned Costs for chart/table. Condition During our audit, we examined a non statistical sample of six subawards and found no evidence of evaluation of any of the subrecipients? risk of noncompliance at the time of the subaward. Furthermore, the most recent Single Audit report for one of the subrecipients selected for testing was not reviewed by program personnel for any potential findings. Criteria Per 2 CFR Section 200.332(b), a pass-through entity is required to evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring procedures related to the subaward. Per 2 CFR Section 200.332(d), a pass-through entity is required to monitor the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. Monitoring must include a review of financial performance reports, following up with the subrecipient to ensure timely and appropriate action on all deficiencies, issuing management decision for applicable audit findings, resolving audit findings, and verifying that each subrecipient is audited as required by 2 CFR 200, Subpart F. Effect Without evaluating the subrecipient?s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to changes in personnel responsibilities, there was miscommunication between the parties responsible for evaluating the risk of noncompliance. Furthermore, the Single Audit report for one of the subrecipients was not reviewed due to oversight as the program personnel was unaware that the subrecipient is separately audited. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200 which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State department?s responsibilities as a pass-through entity are fulfilled, including a formal analysis of each subrecipient?s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: The subrecipient?s prior experience with the same or similar subawards; The results of previous audits including whether or not the subrecipient receives a single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward was audited as a major program; Whether the subrecipient has new personnel or new or substantially changed systems; and The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency).