Inadequate Supporting Documentation for Local Agency Costs - WIC - DPHHS - The Montana Department of Public Health and Human Services does not concur because the recommendations would require receipt level documentation for every subrecipient transaction, which federal regulation does not require, a...
Inadequate Supporting Documentation for Local Agency Costs - WIC - DPHHS - The Montana Department of Public Health and Human Services does not concur because the recommendations would require receipt level documentation for every subrecipient transaction, which federal regulation does not require, and because the department’s existing monitoring framework meets the requirements of 2 CFR 200.332. Paragraph citations in this response refer to the Uniform Guidance as revised effective October 1, 2024; for awards issued before that date, the corresponding provisions are 2 CFR 200.332(b), (d), and (e). Under 2 CFR 200.332(c), a pass‑through entity must evaluate each subrecipient’s risk of noncompliance and risk of fraud to determine the appropriate level of subrecipient monitoring. Under 2 CFR 200.332(e), the required monitoring activities include reviewing financial and performance reports, following up on deficiencies and ensuring the subrecipient takes timely and appropriate action, and issuing management decisions on audit findings. Under 2 CFR 200.332(f), additional tools such as training and technical assistance, on‑site reviews, and agreed‑upon procedures engagements may be used depending on the risk assessment. The regulation does not require transaction level or receipt level documentation for all subrecipient expenditures as a condition of reimbursement. The department acknowledges that the auditors identified expenditures for which receipt‑level support was not on file at the time of review. The department’s position is that the controls described above, rather than universal receipt‑level retention, are the level of monitoring 2 CFR 200.332 requires given the risk profile of the Women, Infants, and Children (WIC) local agency network, and that the department retains the documentation it obtains when additional support is requested. Based on the department’s understanding of the audit results, the auditors did not report any unallowable costs during their review, and their finding focused solely on whether every cost was fully supported by receipt‑level documentation. Extending receipt‑level submission and retention to every expenditure would add substantial administrative work for the department and its local agencies without a corresponding improvement in the department’s ability to detect unallowable costs, which the existing expense report review and biennial on‑site review already address. For these reasons, the department does not concur with the recommendations. As provided in 2 CFR 200.511(c), the discussion above is the department’s detailed explanation of why it believes the recommended corrective action is not required. Responsible Party - Brenda Crawford, Internal Control and Compliance Officer, Montana Department of Public Health and Human Services Target Implementation Date - N/A