2022-004 Unallowable Costs Federal Agency: US Department of Health and Human Services Federal Program Name: Child Care and Development Funds Block Grant (CCDF) - CRRSA (Coronavirus Response and Relieve Supplemental Act) Assistance Listing Number: 93.575 Federal Award Identification Number and Year: 2102NMCCC5 Award Period: 12/27/2020-09/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR Part 200, Subpart E: 200.403 (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. 200.403 (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. 200.405 Allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received Condition: Out of 40 transactions tested, we identified 3 where the underlying support identified payments made to entities for teachers and staff that participate in HeadStart activities. Questioned Costs: $354,000 Context: We sampled 40 transactions. After bringing this to the Department's attention, the Grants Managers did perform a thorough assessment and accumulated all payments under this additional funding for this purpose. Cause: Program staff were allocating this additional funding to entities that have CCDF and Headstart programs. However, there was not appropriate tracking to separate the transactions and ensure they were charged to the correct federal programs. Effect: Costs associated with another federal program were charged to CCDF. Repeat Finding: No Recommendation: We recommend the program work closely with ASD to ensure expenditures are tracked and mapped to the appropriate federal award. Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the ASD Director, CFO and Grants Manager will work with The Federal Program Team to develop formal policies and procedures for grant management to ensure compliance with programmatic grant requirements and track expenditures to ensure costs charged to grants are allowable, necessary, and reasonable. This will be completed by June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022 -003 Procurement, Suspension, and Debarment Federal Agency: US Department of Health and Human Services Federal Program Name: Maternal, Infant, Early Childhood Home Visiting Assistance Listing Number: 93.870 Federal Award Identification Number and Award Period: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: UG ?200.318 General procurement standards. The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220). All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition: During our testing, we noted the following: ? 5 out of 6 applicable agreements were not supported by evidence of appropriate procurement before entering into agreement with the entity to provide services for the program. ? 4 out of 6 applicable agreements did not include the Department's Attachment 3 - "ECECD Suspension and Debarment Form". No other evidence of SAM check provided as evidence of check before entering into agreement with entity to provide services for the program ? 3 out of the 6 agreements reviewed included language to identify the entity as a subrecipient. However, not such monitoring of other required subrecipient protocols were followed because program staff did not believe they used subrecipients. Questioned Costs: N/A Context: Total amount of agreements subject to the suspension and debarment thresholds is 6. We tested all applicable agreements under this program. 2022 -003 Procurement, Suspension, and Debarment (Continued) Cause: Lack of adequate communication between program staff and ASD personnel responsible for procurements and development of agreements to make sure the adequate language was included. Effect: Department may not have followed federal guidelines for procuring vendors. Repeat Finding: No Recommendation: We recommend the program staff and ASD staff responsible for procuring contracts review federal compliance requirements to ensure appropriate language is included in all agreements Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding in that the Agency did not provide CLA with the appropriate information needed to test for federal compliance requirements. Although the Agency?s Certified Procurement Officer (CPO) later verified that all agreements did contain the required ?Suspension and Debarment? language, it was too late to test in time to submit the audit on time. The various departments of ECECD will use this finding to ensure that designated ASD and Program staff fully understand the importance of providing complete and accurate information to the auditors. In addition, ECECD ASD will work toward improving communication regarding potential audit findings to the appropriate program staff, allowing for enough time to address the potential finding and possibly avoid a finding altogether. This will be completed by June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022 -003 Procurement, Suspension, and Debarment Federal Agency: US Department of Health and Human Services Federal Program Name: Maternal, Infant, Early Childhood Home Visiting Assistance Listing Number: 93.870 Federal Award Identification Number and Award Period: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: UG ?200.318 General procurement standards. The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220). All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition: During our testing, we noted the following: ? 5 out of 6 applicable agreements were not supported by evidence of appropriate procurement before entering into agreement with the entity to provide services for the program. ? 4 out of 6 applicable agreements did not include the Department's Attachment 3 - "ECECD Suspension and Debarment Form". No other evidence of SAM check provided as evidence of check before entering into agreement with entity to provide services for the program ? 3 out of the 6 agreements reviewed included language to identify the entity as a subrecipient. However, not such monitoring of other required subrecipient protocols were followed because program staff did not believe they used subrecipients. Questioned Costs: N/A Context: Total amount of agreements subject to the suspension and debarment thresholds is 6. We tested all applicable agreements under this program. 2022 -003 Procurement, Suspension, and Debarment (Continued) Cause: Lack of adequate communication between program staff and ASD personnel responsible for procurements and development of agreements to make sure the adequate language was included. Effect: Department may not have followed federal guidelines for procuring vendors. Repeat Finding: No Recommendation: We recommend the program staff and ASD staff responsible for procuring contracts review federal compliance requirements to ensure appropriate language is included in all agreements Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding in that the Agency did not provide CLA with the appropriate information needed to test for federal compliance requirements. Although the Agency?s Certified Procurement Officer (CPO) later verified that all agreements did contain the required ?Suspension and Debarment? language, it was too late to test in time to submit the audit on time. The various departments of ECECD will use this finding to ensure that designated ASD and Program staff fully understand the importance of providing complete and accurate information to the auditors. In addition, ECECD ASD will work toward improving communication regarding potential audit findings to the appropriate program staff, allowing for enough time to address the potential finding and possibly avoid a finding altogether. This will be completed by June 30, 2023.
2022-004 Unallowable Costs Federal Agency: US Department of Health and Human Services Federal Program Name: Child Care and Development Funds Block Grant (CCDF) - CRRSA (Coronavirus Response and Relieve Supplemental Act) Assistance Listing Number: 93.575 Federal Award Identification Number and Year: 2102NMCCC5 Award Period: 12/27/2020-09/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR Part 200, Subpart E: 200.403 (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. 200.403 (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. 200.405 Allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received Condition: Out of 40 transactions tested, we identified 3 where the underlying support identified payments made to entities for teachers and staff that participate in HeadStart activities. Questioned Costs: $354,000 Context: We sampled 40 transactions. After bringing this to the Department's attention, the Grants Managers did perform a thorough assessment and accumulated all payments under this additional funding for this purpose. Cause: Program staff were allocating this additional funding to entities that have CCDF and Headstart programs. However, there was not appropriate tracking to separate the transactions and ensure they were charged to the correct federal programs. Effect: Costs associated with another federal program were charged to CCDF. Repeat Finding: No Recommendation: We recommend the program work closely with ASD to ensure expenditures are tracked and mapped to the appropriate federal award. Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the ASD Director, CFO and Grants Manager will work with The Federal Program Team to develop formal policies and procedures for grant management to ensure compliance with programmatic grant requirements and track expenditures to ensure costs charged to grants are allowable, necessary, and reasonable. This will be completed by June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022 -003 Procurement, Suspension, and Debarment Federal Agency: US Department of Health and Human Services Federal Program Name: Maternal, Infant, Early Childhood Home Visiting Assistance Listing Number: 93.870 Federal Award Identification Number and Award Period: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: UG ?200.318 General procurement standards. The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220). All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition: During our testing, we noted the following: ? 5 out of 6 applicable agreements were not supported by evidence of appropriate procurement before entering into agreement with the entity to provide services for the program. ? 4 out of 6 applicable agreements did not include the Department's Attachment 3 - "ECECD Suspension and Debarment Form". No other evidence of SAM check provided as evidence of check before entering into agreement with entity to provide services for the program ? 3 out of the 6 agreements reviewed included language to identify the entity as a subrecipient. However, not such monitoring of other required subrecipient protocols were followed because program staff did not believe they used subrecipients. Questioned Costs: N/A Context: Total amount of agreements subject to the suspension and debarment thresholds is 6. We tested all applicable agreements under this program. 2022 -003 Procurement, Suspension, and Debarment (Continued) Cause: Lack of adequate communication between program staff and ASD personnel responsible for procurements and development of agreements to make sure the adequate language was included. Effect: Department may not have followed federal guidelines for procuring vendors. Repeat Finding: No Recommendation: We recommend the program staff and ASD staff responsible for procuring contracts review federal compliance requirements to ensure appropriate language is included in all agreements Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding in that the Agency did not provide CLA with the appropriate information needed to test for federal compliance requirements. Although the Agency?s Certified Procurement Officer (CPO) later verified that all agreements did contain the required ?Suspension and Debarment? language, it was too late to test in time to submit the audit on time. The various departments of ECECD will use this finding to ensure that designated ASD and Program staff fully understand the importance of providing complete and accurate information to the auditors. In addition, ECECD ASD will work toward improving communication regarding potential audit findings to the appropriate program staff, allowing for enough time to address the potential finding and possibly avoid a finding altogether. This will be completed by June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022-002 (Previously 2021-001) Subrecipient Monitoring Federal Agency: United States Department of Health and Human Services Federal Program Title: Child Care Development Fund Block Grant and Maternal, Infant, Early Childhood Homevisiting Assistance Listing Numbers: 93.575/596 and 93.870 Pass-Through Agency: 93.596 ? Passed through NM Department of Human Services ? 22-630-9000- 0005 Federal Award Identification Number and Year: 93.596: 22-630-9000-0005 -7/1/21-06/30/2022 2102 CCDF ? 10/1/2020-09/30/2023 93.870: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Condition: During our testing, we noted the following: 93.596: -2 of the 3 subrecipients identified did not have adequate documentation of formal financial monitoring activities during the year. The program did provide support for programmatic monitoring. - Additionally, the agreements did not contain language regarding suspension and debarment. -2 of the 3 applicable subrecipients tested did not have related FFATA reporting documentation, nor was there documentation provided to support a risk assessment process was undertaken prior to selecting these entities as subrecipients. 93.870: -For 3 out of 3 potential subrecipients, the Program has agreements with entities that identify subaward arrangements, but the program was not performing programmatic or financial monitoring procedures. Management?s response towards implementing prior-year corrective action plan: ECECD program managers began to perform financial monitoring in the form of reviews of federal audit reports, reviews of subrecipient single audits and reviewed general ledger outputs to determine proper PO creation and project ID tracking for PreK awards in FY `22. We also had identification of program elements related to management control (key stakeholder turnover, and system shocks) with program staff after feedback from our internal audit. ECECD is not certain about the status of subrecipient monitoring in other areas of the agency, however PreK program made great strides in remediation in this area for private and public PreK.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Condition (Continued): PreK has created draft policies and procedures for subrecipient monitoring at the program level that address allowability, financial monitoring, risk determinations. These policies and procedures are being reviewed for agency wide implementation for our grants compliance internal audit. These procedures are currently in use while we await approval by ASD and Executive Management. PreK also created a single guidance document and passed that out to all PreK stakeholders outlining allowability of expenditures that is a living document but I have attached this information here. This was developed and implemented with stakeholder training after our PreK internal audit identified this as an issue. Criteria or Specific Requirement: Per 2 CFR ?200.331 Requirements for pass-through entities, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Passthrough entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. Additionally, ?200.331(a) includes required elements that are to be included in the subawards. Questioned Costs: none Context: This was identified during our testing of the respective samples selected for subrecipient monitoring. See condition above. Cause: Lack of thorough communication between program and ASD staff regarding language to be included in subawards. Additionally, lack of emphasis placed on financial monitoring; focus is on programmatic monitoring. Additionally, with regarding to 93.870, current program personnel did not believe the entities qualified as a subrecipient and have communication from the federal agent to support that determination. However, current program personnel were unaware that the agreement between the Department and the entity identified the entity as a subrecipient because the determination was made by program personnel that did not have adequate experience with determination of subrecipients. Effect: The Department is not compliance with Federal Regulations. Repeat Finding: Yes Recommendation: We recommend the Department implement procedures to ensure compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. Additionally, we recommend the Department review the Federal Regulations to ensure the required elements are included in the subaward agreements. In general, the Department could benefit from improved processes over identification of entities at subrecipients or contractors and related tracking/monitoring of those entities identified as subrecipients.2022-002 (Previously 2021-001) Subrecipient Monitoring (Continued) Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the Family Support and Early Intervention Division (FSEI) agrees with the recommendation that the Department could benefit from improved processes. To ensure this does not occur again, the FSEI Director and Deputy Director will implement procedures for program managers to ensure adequate compliance with required monitoring of its subrecipients, including review of financial reporting provided by its subrecipients. The FESI Director and Deputy Director will ensure that program staff are adequately trained on subrecipient monitoring. The FESI Director and Deputy Director will work with the Administrative Services Division (ASD) Director, Chief Financial Officer (CFO) and Grants Manager to verify subrecipient status and to ensure required elements are included in subaward agreements. Furthermore, the FSEI Director and Deputy Director will implement an internal review process to ensure program and financial monitoring is aligned and involves a third level of review by ASD Director, CFO and Grants Manager and other program personnel. The timeline is June 30, 2023.
2022 -003 Procurement, Suspension, and Debarment Federal Agency: US Department of Health and Human Services Federal Program Name: Maternal, Infant, Early Childhood Home Visiting Assistance Listing Number: 93.870 Federal Award Identification Number and Award Period: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Material Weakness in Internal Control and Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: UG ?200.318 General procurement standards. The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220). All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition: During our testing, we noted the following: ? 5 out of 6 applicable agreements were not supported by evidence of appropriate procurement before entering into agreement with the entity to provide services for the program. ? 4 out of 6 applicable agreements did not include the Department's Attachment 3 - "ECECD Suspension and Debarment Form". No other evidence of SAM check provided as evidence of check before entering into agreement with entity to provide services for the program ? 3 out of the 6 agreements reviewed included language to identify the entity as a subrecipient. However, not such monitoring of other required subrecipient protocols were followed because program staff did not believe they used subrecipients. Questioned Costs: N/A Context: Total amount of agreements subject to the suspension and debarment thresholds is 6. We tested all applicable agreements under this program. 2022 -003 Procurement, Suspension, and Debarment (Continued) Cause: Lack of adequate communication between program staff and ASD personnel responsible for procurements and development of agreements to make sure the adequate language was included. Effect: Department may not have followed federal guidelines for procuring vendors. Repeat Finding: No Recommendation: We recommend the program staff and ASD staff responsible for procuring contracts review federal compliance requirements to ensure appropriate language is included in all agreements Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding in that the Agency did not provide CLA with the appropriate information needed to test for federal compliance requirements. Although the Agency?s Certified Procurement Officer (CPO) later verified that all agreements did contain the required ?Suspension and Debarment? language, it was too late to test in time to submit the audit on time. The various departments of ECECD will use this finding to ensure that designated ASD and Program staff fully understand the importance of providing complete and accurate information to the auditors. In addition, ECECD ASD will work toward improving communication regarding potential audit findings to the appropriate program staff, allowing for enough time to address the potential finding and possibly avoid a finding altogether. This will be completed by June 30, 2023.