Reportable Finding Considered a Significant Deficiency and Noncompliance Finding – Subrecipient Monitoring Compliance Agency: U.S. Department of State, Bureau of Population, Refugees, and Migration (PRM) Program: U.S. Refugee Admissions Program ALN# 19.510 Grant Number: SPRMCO25CA0026 and SPRMCO25CA0028 Program Year: 2025 Criteria: 2 CFR §200.332 requires pass-through entities to establish and implement procedures to monitor subrecipients and ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effective internal controls should include documented policies and procedures governing the subrecipient monitoring process. Condition: Community Sponsorship Hub (CSH) did not have formally documented and approved subrecipient monitoring policies and procedures in place during FY2025. Although management performed various monitoring activities, including execution of subaward agreements, review of reimbursement requests, financial and programmatic reporting reviews, and communication with subrecipients, these procedures were not formally documented in a written policy until 2026. Cause: Management had established operational subrecipient monitoring practices but had not formally documented these practices in approved policies and procedures during the period under audit. As a result, monitoring activities were performed based on institutional knowledge rather than a formally established control framework. Effect: The absence of formal written policies and procedures increases the risk that subrecipient monitoring activities may be applied inconsistently, incompletely, or not performed in accordance with Uniform Guidance requirements. This could result in noncompliance by subrecipients not being identified and addressed in a timely manner. Questioned costs: None Perspective: Statistical sampling was not used; however, a nonstatistical sampling approach was applied in accordance with AICPA guidance. The deficiency impacts the design of internal controls over CSH’s subrecipient monitoring process and therefore represents a systemic issue rather than an isolated occurrence. Testing of selected subawards indicated that monitoring activities were generally performed and documented; however, the lack of a formal written policy existed throughout FY2025 and affected all federal programs with subrecipient activity. Repeat finding: This is not a repeat finding. Recommendation: We recommend that management establish, approve, and maintain comprehensive written subrecipient monitoring policies and procedures that comply with 2 CFR §200.332. The policy should clearly define responsibilities, risk assessment procedures, monitoring activities, documentation requirements, follow-up procedures, and compliance review requirements for all subrecipients. Management’s response (unaudited): See Corrective Action Plan
Reportable Finding Considered a Significant Deficiency and Noncompliance Finding – Procurement Agency: U.S. Department of State, Bureau of Population, Refugees, and Migration (PRM) Program: U.S. Refugee Admissions Program ALN# 19.510 Grant Number: SPRMCO25CA0026, SPRMCO25CA0028, and SPRMCO24CA0337 Program Year: 2025 Criteria: The auditee must maintain and follow documented procurement policies and procedures that comply with Uniform Guidance procurement requirements. Noncompetitive procurement (sole source) may only be used when one of the circumstances in 2 CFR 200.320(c) applies and must be adequately documented. Condition: The Organization did not have a formal written procurement policy during the audit period. In addition, for the procurement selections tested that were procured through sole source methods, management did not maintain documentation demonstrating that the procurements met the criteria for noncompetitive procurement under 2 CFR 200.320(c). Cause: Management had not established formal procurement policies and procedures and did not implement controls to ensure sole source procurements were appropriately justified and documented in accordance with Uniform Guidance requirements. Effect: Without documented procurement policies and support for sole source procurements, the Organization cannot demonstrate compliance with federal procurement requirements. This increases the risk that procurements may not be conducted in a manner that promotes full and open competition. Questioned costs: None Perspective: Statistical sampling was not used; however, a nonstatistical sampling approach was applied in accordance with AICPA guidance. This appears to be a systemic issue, as the Organization lacked a formal procurement policy during the audit period. Additionally, sole source procurements tested did not include documentation demonstrating that the conditions permitting noncompetitive procurement were met. Repeat finding: This is not a repeat finding. Recommendation: Management should develop and formally adopt written procurement policies and procedures that comply with Uniform Guidance requirements. The policies should include requirements for procurement methods, documentation standards, conflict of interest considerations, and approval procedures. In addition, management should ensure that all sole source procurements are supported by documentation demonstrating that the procurement met one of the allowable circumstances for noncompetitive procurement under 2 CFR 200.320(c) and retain such documentation in the procurement file. Management’s response (unaudited): See Corrective Action Plan
Reportable Finding Considered a Significant Deficiency and Noncompliance Finding – Allowable Costs/Cost Principles – Payroll Documentation Agency: U.S. Department of State, Bureau of Population, Refugees, and Migration (PRM) Program: U.S. Refugee Admissions Program ALN# 19.510 Grant Number: SPRMCO25CA0026, SPRMCO25CA0028, and SPRMCO24CA0337 Program Year: 2025 Criteria: 2 CFR §200.430(i) requires charges to federal awards for salaries and wages to be supported by records that accurately reflect the work performed and be incorporated into the entity’s system of internal control, which provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During testing of payroll transactions charged to the PRM programs, we noted that although employees completed timesheets, the timesheets did not contain evidence of supervisory review or approval. Based on discussions with management, supervisor review was performed informally; however, no documented approval, such as a signature, electronic approval, or other evidence of review, was retained. Cause: The Organization did not have a formalized process requiring documented supervisory approval of timesheets during the audit period. As a result, review activities were not consistently evidenced and retained. Effect: Without documented supervisory review, the Organization cannot demonstrate that time charged to federal awards was reviewed for accuracy, allowability, and proper allocation. This increases the risk that payroll costs charged to federal awards may be inaccurate or unsupported. Questioned costs: None Perspective: Statistical sampling was not used; however, a nonstatistical sampling approach was applied in accordance with AICPA guidance. This condition was identified in payroll testing and appears to be systemic, as management indicated documented timesheet approvals were not required during the period under audit. Repeat finding: This is not a repeat finding. Recommendation: We recommend that management implement and maintain a formal timesheet approval process requiring supervisors to review and approve employee timesheets electronically or in writing before payroll is processed. Documentation of the approval should be retained to support payroll costs charged to federal awards. Management’s response (unaudited): See Corrective Action Plan