Forth and Affiliate respectfully submits the following corrective action plan for the year ending December 31, 2025. Audit: January 1, 2025, to December 31, 2025. The findings from the schedule of findings and the questioned costs are discussed below. The finding is numbered according to the schedul...
Forth and Affiliate respectfully submits the following corrective action plan for the year ending December 31, 2025. Audit: January 1, 2025, to December 31, 2025. The findings from the schedule of findings and the questioned costs are discussed below. The finding is numbered according to the schedule. FINDING - FEDERAL AWARD PROGRAMS AUDITS U.S. Department of Energy, Conservation Research and Development Cluster 2025-001 Subrecipient Monitoring – Non-Compliance and Material Weakness in Internal Control Over Compliance (Partial Repeat of Finding 2024-002) Recommendation: Forth should strengthen its implementation and oversight of its existing subrecipient monitoring policy to ensure that the policy is consistently followed and applied prospectively to all applicable subrecipients. Specifically, Forth should: 1. Apply and document the required risk assessment for all subrecipients, including existing and previously engaged subrecipients, and establish procedures for periodic reassessment as appropriate; 2. Ensure that the results of each risk assessment are documented and used to determine the appropriate nature, timing, and extent of subrecipient monitoring; 3. Maintain complete and accurate documentation of subaward information and ongoing monitoring activities, including meetings, technical assistance, performance reviews, follow-up, and resolution of identified issues; and 4. Establish management review and other internal controls to verify that the subrecipient monitoring policy is consistently implemented, documented, and applied to all applicable federal subrecipients. Management should also perform a review of existing subrecipient files to identify and remediate instances where required risk assessments, monitoring documentation, or other award documentation were not completed in accordance with the established policy. Explanation of disagreement with audit findings: There is no disagreement with the audit findings. Action Plan: We agree with the auditor's comments. Forth made meaningful improvements to subrecipient monitoring in FY2025, including establishing a documented monitoring policy, a risk assessment process for new subawards, and inclusion of required federal award information in subaward agreements. To fully resolve this finding, Forth will complete the following in FY2026: • Apply and document a formal risk assessment for all subrecipients with subaward agreements active during FY2026, including those previously engaged prior to the current risk assessment process - target completion December 31, 2026. • For subrecipients whose awards closed prior to FY2026, complete a lighter-touch closeout review confirming there are no open compliance issues or unresolved audit findings, so that all subrecipients affected by this finding are documented as addressed - target completion December 31, 2026. • Formalize a written process linking each subrecipient's risk assessment results to a defined monitoring plan - target completion December 31, 2026. • Implement a standard monitoring log/template to formally document ongoing monitoring activities for every subrecipient on a rolling basis - target completion December 31, 2026. • Establish a semi-annual management review to confirm the monitoring policy is being consistently applied across all subrecipients - first review by December 31, 2026. Name(s) of the contact people responsible for corrective action: Gina Avalos-Limardo, Senior Director of Finance & Operations and Aleda McMonagle, Senior Operations Associate Plan completion date for corrective action plan: December 31, 2026