2023- 007 - Material Weakness in Internal Control and Material Noncompliance – Sub-recipient Monitoring and Management
WPHW understands this finding and recognizes that correction that were planned for FY23 were not able to be fully implemented. One of the significant challenges WPHW had over the pa...
2023- 007 - Material Weakness in Internal Control and Material Noncompliance – Sub-recipient Monitoring and Management
WPHW understands this finding and recognizes that correction that were planned for FY23 were not able to be fully implemented. One of the significant challenges WPHW had over the past couple of year, in addition to IT system challenges, is staffing. WPHW has hired three individuals to develop our contracting process and had performance issues with all three individuals. In addition to the difficulties with the NetSuite implementation, we have had to re-evaluate our sub-recipient monitoring and management business process.
The following process will address this finding:
1) Director of Accounting and the Accounting Manager will review CFR 200.332 and develop a revised business process for the WPHW contract system
a. Accounting Team will hire 2 Accounting Specialists who will each have specific sub-recipient monitoring responsibilities
2) Director of Accounting and the Accounting Manager will review all current contract to ensure the following:
a. Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes:
i. Federal, State or other award identification.
ii. Subrecipient name (which must match the name associated with its unique entity identifier);
iii. Subrecipient's unique entity identifier;
iv. Award Identification Number (FAIN/SAIN);
v. Award Date of award to the recipient by the Federal agency;
vi. Subaward Period of Performance Start and End Date;
vii. Subaward Budget Period Start and End Date;
viii. Amount of Federal Funds (if applicable) Obligated by this action by the pass-through entity to the subrecipient;
ix. Total Amount of Federal Funds Obligated, if applicable, to the subrecipient by the pass-through entity including the current financial obligation;
x. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity;
xi. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA);
xii. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity;
xiii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement;
xiv. Identification of whether the award is R&D; and
xv. Indirect cost rate for the Federal, State, or other award (including if the de minimis rate is charged) per § 200.414.
b. All requirements imposed by the pass-through entity on the subrecipient are in accordance with Federal, State, Local statutes, regulations and the terms and conditions of the award;
c. Determines and ensure completion of required financial and performance reports;
d. Has an approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government or utilizes the de minimus.
e. States that subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part
f. Details appropriate terms and conditions concerning closeout of the subaward.
g. Subrecipient risk assessment that accesses:
i. prior experience with the same or similar subawards;
ii. previous audits
iii. personnel or substantially changed systems
iv. Prior monitoring results
1. Subaward conditions will be placed if issues arise
3) Implement sub-recipient monitoring process.
a. Conduct invoice review monthly
i. All invoices must include full back up and support for expenses
ii. All invoices will be reviewed as they are received to ensure expenses are allowable
iii. Any issues that arise will be addressed prior to invoice payment
b. Conduct contract monitoring visit annually
i. Hold a meeting with the sub-recipient to review the following:
1. Reviewing financial and performance reports
2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the subaward.
3. Training and technical assistance on program-related matters
4. Determine corrective action for any deficiencies or findings and determine risk
5. Discussion of enforcement action against noncompliant subrecipient
This process will be reviewed, and implementation will begin during Q4 FY24. All current FY24 contracts will be reviewed, and monitoring visits scheduled. For FY25, all contracts will be in compliance with requirements.