Department of Education, passed through the North Dakota Department of Public Instruction ALN 84.371C, award numbers S371C190005 and S371C190005-22DD, Comprehensive Literacy State Development. Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria - Requirements contained in 2 CFR Part 200.331 specifies that pass-through entities be responsible for identifying Federal Award information and applicable compliance requirements at the time of awards to subrecipients; for monitoring the subrecipient's use for Federal awards; providing reasonable assurance that the subrecipient administers Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements; ensuring that subrecipients have required audits completed, reviewing the results of those audits; and evaluating the impact of subrecipient activities on the pass-through entity's ability to comply with applicable Federal regulations. Condition - There were no formal agreements between the District and its subrecipients as required in 2 CFR 200.331 and no formal subrecipient monitoring procedures were being performed. Cause - The District's agreements with subrecipients must properly follow Uniform Guidance and no formal monitoring procedures were in place. Effect - Lacking controls could lead to noncompliance with the requirements of the program by subrecipients and could require the return of grant funds to the grantor agency or the entity receiving less grant funds than they were eligible for. Questioned Costs - None reported Context/Sampling - 100% of the subrecipient entities were selected for subrecipient monitoring testing. Repeat Finding from Prior Year - No Recommendation - We recommend the District maintain formal agreements with the subrecipient entities that include the Uniform Guidance language and implement formal monitoring processes over subrecipient entities. Views of Responsible Officials - There is no disagreement with the audit finding.
2025-002 - Lack of Written Federal Program Policies. Type: Material Weakness. Condition: The Village does not have documented policies and procedures specific to the administration of the Coronavirus State and Local Fiscal Recovery Funds program. This includes the absence of written guidance on key compliance areas such as payments, procurement, allowability of costs charged to federal programs, compensation, and travel costs under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Coronavirus State and Local Fiscal Recovery Funds program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Recommendation: We recommend that the Village develop and implement written policies and procedures specific to the Coronavirus State and Local Fiscal Recovery Funds program. These should include: - Payments in accordance with §200.302 (6), - Procurement in accordance with §200.318, - Allowability of costs charged to federal programs in accordance with §200.302 (7), - Compensation in accordance with §200.430 and §200.431, - Travel costs in accordance with §200.474. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by February 28, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.
2025-003 - Lack of Written Federal Program Policies. Type: Material Weakness. Condition: The Village does not have documented policies and procedures specific to the administration of the Water and Waste Disposal for Rural Communities program. This includes the absence of written guidance on key compliance areas such as procurement, subrecipient monitoring, allowable costs, and reporting requirements under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Water and Waste Disposal for Rural Communities program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Questioned Costs: n/a. Recommendation: We recommend that the Village develop and implement written policies and procedures specific to the Water and Waste Disposal Systems for Rural communities program. These should include: - Procurement standards in accordance with 2 CFR 200.318 – 200.327. - Subrecipient monitoring protocols. - Guidelines for allowable costs and cost principles. - Reporting and recordkeeping requirements. - Internal control procedures to ensure compliance. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by February 28, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.
2024-004 Allowable Costs Federal Programs – AL 64.033 – Supportive Services for Veteran Families (SSVF) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). Condition – For the year ended December 31, 2024, we noted one instance in which noneligible expense by a subrecipient were reimbursed and CAPND drew down on the grant for. Cause – There was a request for by a subrecipient to reimburse expenses that did not exist. This request was authorized by CAPND and the payment was sent to the subrecipient for noneligible expenses. CAPND then drew down on the grant for the non-existing expense. Effect – Noncompliance with the grant. Questioned costs – $159.73 Repeat Finding – This is not a repeat finding. Recommendation – Implement a system of internal control in which all expenses that subrecipient request to be reimbursed have supporting documentation. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
2024-005 Subrecipient Monitoring Federal Programs – AL 64.033 – Supportive Services for Veteran Families (SSVF) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). Condition – For the year ended December 31, 2024, we noted one instance in which noneligible expense by a subrecipient were reimbursed and CAPND drew down on the grant for. Cause – There was a request for by a subrecipient to reimburse expenses that did not exist. This request was authorized by CAPND and the payment was sent to the subrecipient for noneligible expenses. CAPND then drew down on the grant for the non-existing expense. Effect – Noncompliance with the grant. Questioned costs – $159.73 Repeat Finding – This is not a repeat finding. Recommendation – Implement a system of internal control in which all expenses that subrecipient request to be reimbursed have supporting documentation. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
2024-006 Subrecipient Monitoring Federal Programs – AL 93.569 – Community Services Block Grant (CSBG) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2024, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – There was missing required information on subawards granted to subrecipients. Context– Of the total federal expenditures under the program noted above, $283,852 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities for the grant year October 2023 to September 2024, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is a repeat finding. Recommendation – The entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
2024-006 Subrecipient Monitoring Federal Programs – AL 93.569 – Community Services Block Grant (CSBG) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2024, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – There was missing required information on subawards granted to subrecipients. Context– Of the total federal expenditures under the program noted above, $283,852 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities for the grant year October 2023 to September 2024, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is a repeat finding. Recommendation – The entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
Finding #2024-002 – Significant Deficiency and Other Noncompliance. Applicable federal programs: U. S. Environmental Protection Agency, Assistance Listing #66.456, National Estuary program, Passed through Texas Commission on Environmental Quality: Contract period: 09/01/23 – 08/31/25, Contract number: 582-24-50165. Criteria: In accordance with Uniform Guidance OMB 2 CFR §200.331(a), pass through entities must provide subrecipients with specific information at the time of the subaward, including the assistance listing number, federal award identification number (FAIN), name of the federal awarding agency, pass through entity and contact information for awarding official, federal award date of award to the recipient by the Federal agency, access to subrecipient’s records and retention period, and a statement regarding the close-out terms and conditions. Condition and context: We reviewed one of the two subrecipient awards for the required information described in the criteria above and noted such provisions were not included in the subrecipient agreement. Effect: Failure to communicate required information may result in subrecipients not properly complying with federal requirements, increasing the risk of noncompliance. Recommendation: Policies and procedures should be implemented to ensure all required information is included in the subrecipient agreement before issuance. View of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.
SOME FEDERAL AWARDS MAY CONTAIN COST LIMITATIONS ON RECOVERY OF INDIRECT COSTS THAT DIFFER FROM THE FEDERALLY NEGOTIATED INDIRECT COST RATES. IN THESE CASES, THE INDIRECT COST RATE WILL BE SPECIFIED IN THE AWARD, AD DESCRIBED IN 2 CFR SECTIONS 200.210(A)(15) AND 200.331(A)(1)(XIII). NONPROFIT ORGANIZATIONS MUST CONFORM TO COST PRINCIPLES IN 2 CFR PART 200, SUBPART E, APPENDIX IV, AND CAS (IF APPLICABLE), AND IN ACCORDANCE WITH ANY NEGOTIATED RATE AGREEMENTS AND SPECIFIC AWARD CONDITIONS/LIMITATIONS. ADDITIONALLY, RATES USED MUST BE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AWARD AND THE AMOUNTS CLAIMED MUST BE APPLIED TO THE APPROPRIATE BASE. IDAHO IMMUNIZATION COALITION, INC. WAS UNABLE TO PROVIDE DOCUMENTATION OF AN APPROPRIATE BASE OF EXPENDITURES FOR THE AWARD APPROVED RATE WAS APPLIED TO.
SOME FEDERAL AWARDS MAY CONTAIN COST LIMITATIONS ON RECOVERY OF INDIRECT COSTS THAT DIFFER FROM THE FEDERALLY NEGOTIATED INDIRECT COST RATES. IN THESE CASES, THE INDIRECT COST RATE WILL BE SPECIFIED IN THE AWARD, AD DESCRIBED IN 2 CFR SECTIONS 200.210(A)(15) AND 200.331(A)(1)(XIII). NONPROFIT ORGANIZATIONS MUST CONFORM TO COST PRINCIPLES IN 2 CFR PART 200, SUBPART E, APPENDIX IV, AND CAS (IF APPLICABLE), AND IN ACCORDANCE WITH ANY NEGOTIATED RATE AGREEMENTS AND SPECIFIC AWARD CONDITIONS/LIMITATIONS. ADDITIONALLY, RATES USED MUST BE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AWARD AND THE AMOUNTS CLAIMED MUST BE APPLIED TO THE APPROPRIATE BASE. IDAHO IMMUNIZATION COALITION, INC. WAS UNABLE TO PROVIDE DOCUMENTATION OF AN APPROPRIATE BASE OF EXPENDITURES FOR THE AWARD APPROVED RATE WAS APPLIED TO.
Criteria: In accordance with 2 CFR § 200.331, a non-federal entity that passes federal awards to subrecipients is responsible for 1) evaluating each subrecipient’s risk of noncompliance, 2) monitoring the activities of subrecipients to ensure that the subaward is used for authorized purposes, in compliance with laws and the terms and conditions of the subaward, and 3) verifying that subrecipients have audits in accordance with the Uniform Guidance, if applicable. Adequate internal controls are required to ensure compliance with these requirements under 2 CFR § 200.303. Condition: During our audit, we noted that the Parish did not have sufficient internal controls in place to ensure effective subrecipient monitoring. Specifically, there was no documented risk assessment of subrecipients prior to issuing subawards, the Parish did not perform periodic reviews or site visits to monitor subrecipient performance or compliance, and the subrecipient audit reports were not consistently obtained or reviewed. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: Failure to properly monitor subrecipients increases the risk that federal funds may be misused or not spent in accordance with program requirements to achieve program objectives. It also exposes the Parish to potential liability for questioned costs incurred by subrecipients to be repaid to the federal agency. Recommendation: We recommend that the entity establish and implement formal policies and procedures for subrecipient monitoring in accordance with 2 CFR § 200.331. This should include conducting and documenting pre-award risk assessments, developing a subrecipient monitoring plan (e.g., site visits, desk reviews), reviewing subrecipient performance and audit reports on a regular basis.
Federal Program: AL 11.307 – Economic Adjustment Assistance Criteria: Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (The Chamber Foundation) must perform certain activities to ensure that the subrecipient uses funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes review of independent audits of subrecipients and response to deficiencies detected through audits (2 CFR section 200.331(f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition: For the four-month period from September 1, 2024 through December 31, 2024, we reviewed the Foundation’s subrecipient internal controls, requesting supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Unform Guidance for subrecipient monitoring and per the Foundation’s internal controls could not be substantiated or were determined to not have occurred during the year under audit. Cause: Due to internal control deficiency noted in 2024-001, the subrecipient monitoring requirement was not in compliance during the year. Context: Of the federal expenditures under the program noted, $91,125 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with the Chamber Foundation staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the four subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the four subawards awarded to pass-through entities, one was missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient’s unique entity identifier. Effect: Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Questioned costs: None Recommendation: The Foundation should request yearly audit reports as determined by 2 CFR 200. Additionally, the entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials: Management recognizes the deficiency and plans to implement the auditor’s recommendations. Indication of Repeat Finding: This is a repeat finding of August 31, 2024 - 003 from the prior year.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-004 Allowable Costs Federal Programs – AL 64.033 – Supportive Services for Veteran Families (SSVF) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). Condition – For the year ended December 31, 2024, we noted one instance in which noneligible expense by a subrecipient were reimbursed and CAPND drew down on the grant for. Cause – There was a request for by a subrecipient to reimburse expenses that did not exist. This request was authorized by CAPND and the payment was sent to the subrecipient for noneligible expenses. CAPND then drew down on the grant for the non-existing expense. Effect – Noncompliance with the grant. Questioned costs – $159.73 Repeat Finding – This is not a repeat finding. Recommendation – Implement a system of internal control in which all expenses that subrecipient request to be reimbursed have supporting documentation. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
2024-005 Subrecipient Monitoring Federal Programs – AL 64.033 – Supportive Services for Veteran Families (SSVF) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). Condition – For the year ended December 31, 2024, we noted one instance in which noneligible expense by a subrecipient were reimbursed and CAPND drew down on the grant for. Cause – There was a request for by a subrecipient to reimburse expenses that did not exist. This request was authorized by CAPND and the payment was sent to the subrecipient for noneligible expenses. CAPND then drew down on the grant for the non-existing expense. Effect – Noncompliance with the grant. Questioned costs – $159.73 Repeat Finding – This is not a repeat finding. Recommendation – Implement a system of internal control in which all expenses that subrecipient request to be reimbursed have supporting documentation. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
2024-006 Subrecipient Monitoring Federal Programs – AL 93.569 – Community Services Block Grant (CSBG) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2024, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – There was missing required information on subawards granted to subrecipients. Context– Of the total federal expenditures under the program noted above, $283,852 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities for the grant year October 2023 to September 2024, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is a repeat finding. Recommendation – The entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
2024-006 Subrecipient Monitoring Federal Programs – AL 93.569 – Community Services Block Grant (CSBG) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2024, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – There was missing required information on subawards granted to subrecipients. Context– Of the total federal expenditures under the program noted above, $283,852 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities for the grant year October 2023 to September 2024, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is a repeat finding. Recommendation – The entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.
Finding #2024-002 – Significant Deficiency and Other Noncompliance. Applicable federal programs: U. S. Environmental Protection Agency, Assistance Listing #66.456, National Estuary program, Passed through Texas Commission on Environmental Quality: Contract period: 09/01/23 – 08/31/25, Contract number: 582-24-50165. Criteria: In accordance with Uniform Guidance OMB 2 CFR §200.331(a), pass through entities must provide subrecipients with specific information at the time of the subaward, including the assistance listing number, federal award identification number (FAIN), name of the federal awarding agency, pass through entity and contact information for awarding official, federal award date of award to the recipient by the Federal agency, access to subrecipient’s records and retention period, and a statement regarding the close-out terms and conditions. Condition and context: We reviewed one of the two subrecipient awards for the required information described in the criteria above and noted such provisions were not included in the subrecipient agreement. Effect: Failure to communicate required information may result in subrecipients not properly complying with federal requirements, increasing the risk of noncompliance. Recommendation: Policies and procedures should be implemented to ensure all required information is included in the subrecipient agreement before issuance. View of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.
SOME FEDERAL AWARDS MAY CONTAIN COST LIMITATIONS ON RECOVERY OF INDIRECT COSTS THAT DIFFER FROM THE FEDERALLY NEGOTIATED INDIRECT COST RATES. IN THESE CASES, THE INDIRECT COST RATE WILL BE SPECIFIED IN THE AWARD, AD DESCRIBED IN 2 CFR SECTIONS 200.210(A)(15) AND 200.331(A)(1)(XIII). NONPROFIT ORGANIZATIONS MUST CONFORM TO COST PRINCIPLES IN 2 CFR PART 200, SUBPART E, APPENDIX IV, AND CAS (IF APPLICABLE), AND IN ACCORDANCE WITH ANY NEGOTIATED RATE AGREEMENTS AND SPECIFIC AWARD CONDITIONS/LIMITATIONS. ADDITIONALLY, RATES USED MUST BE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AWARD AND THE AMOUNTS CLAIMED MUST BE APPLIED TO THE APPROPRIATE BASE. IDAHO IMMUNIZATION COALITION, INC. WAS UNABLE TO PROVIDE DOCUMENTATION OF AN APPROPRIATE BASE OF EXPENDITURES FOR THE AWARD APPROVED RATE WAS APPLIED TO.
SOME FEDERAL AWARDS MAY CONTAIN COST LIMITATIONS ON RECOVERY OF INDIRECT COSTS THAT DIFFER FROM THE FEDERALLY NEGOTIATED INDIRECT COST RATES. IN THESE CASES, THE INDIRECT COST RATE WILL BE SPECIFIED IN THE AWARD, AD DESCRIBED IN 2 CFR SECTIONS 200.210(A)(15) AND 200.331(A)(1)(XIII). NONPROFIT ORGANIZATIONS MUST CONFORM TO COST PRINCIPLES IN 2 CFR PART 200, SUBPART E, APPENDIX IV, AND CAS (IF APPLICABLE), AND IN ACCORDANCE WITH ANY NEGOTIATED RATE AGREEMENTS AND SPECIFIC AWARD CONDITIONS/LIMITATIONS. ADDITIONALLY, RATES USED MUST BE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AWARD AND THE AMOUNTS CLAIMED MUST BE APPLIED TO THE APPROPRIATE BASE. IDAHO IMMUNIZATION COALITION, INC. WAS UNABLE TO PROVIDE DOCUMENTATION OF AN APPROPRIATE BASE OF EXPENDITURES FOR THE AWARD APPROVED RATE WAS APPLIED TO.
Criteria: In accordance with 2 CFR § 200.331, a non-federal entity that passes federal awards to subrecipients is responsible for 1) evaluating each subrecipient’s risk of noncompliance, 2) monitoring the activities of subrecipients to ensure that the subaward is used for authorized purposes, in compliance with laws and the terms and conditions of the subaward, and 3) verifying that subrecipients have audits in accordance with the Uniform Guidance, if applicable. Adequate internal controls are required to ensure compliance with these requirements under 2 CFR § 200.303. Condition: During our audit, we noted that the Parish did not have sufficient internal controls in place to ensure effective subrecipient monitoring. Specifically, there was no documented risk assessment of subrecipients prior to issuing subawards, the Parish did not perform periodic reviews or site visits to monitor subrecipient performance or compliance, and the subrecipient audit reports were not consistently obtained or reviewed. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: Failure to properly monitor subrecipients increases the risk that federal funds may be misused or not spent in accordance with program requirements to achieve program objectives. It also exposes the Parish to potential liability for questioned costs incurred by subrecipients to be repaid to the federal agency. Recommendation: We recommend that the entity establish and implement formal policies and procedures for subrecipient monitoring in accordance with 2 CFR § 200.331. This should include conducting and documenting pre-award risk assessments, developing a subrecipient monitoring plan (e.g., site visits, desk reviews), reviewing subrecipient performance and audit reports on a regular basis.
Federal Program: AL 11.307 – Economic Adjustment Assistance Criteria: Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (The Chamber Foundation) must perform certain activities to ensure that the subrecipient uses funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes review of independent audits of subrecipients and response to deficiencies detected through audits (2 CFR section 200.331(f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition: For the four-month period from September 1, 2024 through December 31, 2024, we reviewed the Foundation’s subrecipient internal controls, requesting supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Unform Guidance for subrecipient monitoring and per the Foundation’s internal controls could not be substantiated or were determined to not have occurred during the year under audit. Cause: Due to internal control deficiency noted in 2024-001, the subrecipient monitoring requirement was not in compliance during the year. Context: Of the federal expenditures under the program noted, $91,125 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with the Chamber Foundation staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the four subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the four subawards awarded to pass-through entities, one was missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient’s unique entity identifier. Effect: Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Questioned costs: None Recommendation: The Foundation should request yearly audit reports as determined by 2 CFR 200. Additionally, the entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials: Management recognizes the deficiency and plans to implement the auditor’s recommendations. Indication of Repeat Finding: This is a repeat finding of August 31, 2024 - 003 from the prior year.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
Federal Program – American Rescue Plan Technical Assistance Investment Program – Assistance Listing No. 10.234 – Award No. 2023-70504-40441 – Program Year 2024 – U.S. Department of Agriculture Criteria or specific requirement – Subrecipient Monitoring, 2 CFR 200.332(b), (c) and (e) Condition – The pass-through entity is responsible for identifying the award and applicable requirements to the subrecipient at the time of the subaward providing information described in 2 CFR section 200.332 to ensure the subrecipient uses the federal award in accordance with federal statues, regulations, and the terms and conditions of the award. The pass-through entity is responsible for evaluating each subrecipient’s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. The pass-through entity is responsible for monitoring the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Cause – While the organization did perform certain monitoring procedures, the organization did not have sufficient controls in place to ensure agreements with subrecipients were in compliance with requirements as well as to ensure appropriate monitoring of the subrecipients’ use of funding in accordance with 2 CFR section 200.332. Effect – The organization failed to have agreements with subrecipients that were inclusive of all applicable requirements outlined within 2 CFR section 200.332. The organization did not have sufficient procedures to appropriately monitor the subrecipients’ use of funds within the reporting period. Questioned costs – N/A Context – Out of a population of 8 subrecipients, 2 subrecipients were selected for testing. For the 2 subrecipients, the agreement with the subrecipient was missing information that is required to be communicated with the subrecipient to ensure compliance with federal requirements. Additionally, for the 2 subrecipients, audit reports were not obtained by the pass-through entity during the reporting period to ensure proper use of funding received and proper monitoring of the subaward. Our sample was not and was not intended to be statistically valid. Identification as a repeat finding, if applicable – N/A Recommendation – The organization should ensure agreements with subrecipients include all information required to be communicated to the subrecipient for the subaward. The organization should put controls in place to ensure that monitoring activities are tailored to this risk of each subrecipient and appropriately followed in alignment with what is required. Views of Responsible Officials and Planned Corrective Actions – Management agrees with finding. Management plans to develop a subrecipient monitoring policy aligned with 2 CFR 200.331-333. Management will also standardize agreement templates to include all required clauses for federal award subrecipient agreements, implement a subrecipient risk assessment tool to determine monitoring frequency and risk level identification, and assign staff for annual subrecipient desk reviews or site visits based on risk levels.
2024-003 - Subrecipient Monitoring Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Subrecipient Monitoring). Program. Homeland Security Grant Program; U.S. Department of Homeland Security; ALN 97.067; Passed through the Michigan State Police; Award numbers EMW-2022-SS-00031-S01 and EMW-2023-SS-00022-S01. Coronavirus State and Fiscal Recover Funds; U.S. Department of Treasury; ALN 21.027. Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award. Condition. We noted that the County did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year. Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants. Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant. Questioned Costs. No costs were questioned due to the fact that the County approved subrecipient expenditures. Recommendation. We recommend that the County create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements. View of Responsible Officials. We concur with the audit assessment regarding this matter.
2024-003 - Subrecipient Monitoring Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Subrecipient Monitoring). Program. Homeland Security Grant Program; U.S. Department of Homeland Security; ALN 97.067; Passed through the Michigan State Police; Award numbers EMW-2022-SS-00031-S01 and EMW-2023-SS-00022-S01. Coronavirus State and Fiscal Recover Funds; U.S. Department of Treasury; ALN 21.027. Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award. Condition. We noted that the County did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year. Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants. Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant. Questioned Costs. No costs were questioned due to the fact that the County approved subrecipient expenditures. Recommendation. We recommend that the County create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements. View of Responsible Officials. We concur with the audit assessment regarding this matter.
2024-003 - Subrecipient Monitoring Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Subrecipient Monitoring). Program. Homeland Security Grant Program; U.S. Department of Homeland Security; ALN 97.067; Passed through the Michigan State Police; Award numbers EMW-2022-SS-00031-S01 and EMW-2023-SS-00022-S01. Coronavirus State and Fiscal Recover Funds; U.S. Department of Treasury; ALN 21.027. Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award. Condition. We noted that the County did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year. Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants. Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant. Questioned Costs. No costs were questioned due to the fact that the County approved subrecipient expenditures. Recommendation. We recommend that the County create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements. View of Responsible Officials. We concur with the audit assessment regarding this matter.
2024-003 - Subrecipient Monitoring Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Subrecipient Monitoring). Program. Homeland Security Grant Program; U.S. Department of Homeland Security; ALN 97.067; Passed through the Michigan State Police; Award numbers EMW-2022-SS-00031-S01 and EMW-2023-SS-00022-S01. Coronavirus State and Fiscal Recover Funds; U.S. Department of Treasury; ALN 21.027. Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award. Condition. We noted that the County did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year. Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants. Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant. Questioned Costs. No costs were questioned due to the fact that the County approved subrecipient expenditures. Recommendation. We recommend that the County create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements. View of Responsible Officials. We concur with the audit assessment regarding this matter.
2024-001: Subrecipient Monitoring Criteria: The Code of Federal Regulations 2 CFR 200.332 states that all pass-through entities (PTE) must: Identify the Award and Applicable Requirements - Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); (2)all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Evaluate Risk - Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). Monitor - Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: (1) Reviewing financial and programmatic (performance and special reports) required by the PTE. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Condition: The Organization did not clearly communicate the required federal award information and applicable requirements to the subrecipients. The Organization did not evaluate the risk of non-compliance of the subrecipients in order to identify the appropriate monitoring procedures. Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that federal award monitoring compliance requirements are being met. Effect: The Organization did not perform adequate monitoring procedures on the subrecipients. Without communication of required information, subrecipients may overspend award amounts or incur unallowable expenses towards the grant. Questioned Costs: N/A Statistical Sampling: Statistical sampling was not used in making sample selections. Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to evaluate the subrecipient risk of noncompliance to ensure subrecipients are being appropriately monitored in compliance with federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
Federal Program: Coronavirus State and Local Fiscal Recovery Funds- Assistance Listing Number 21.027 Federal Agency: U.S. Department of Treasury Pass-through Entity: Illinois Department of Human Services Condition: The Organization has not established written procedures to identify, assess risk of, monitor, or accurately track amounts provided to subrecipients of ARPA funding. No subrecipient notification letters were issued to entities receiving subawards, and the Organization could not provide complete and accurate records of the amounts passed through to subrecipients during the audit period. Criteria: 2 CFR §200.331 requires pass-through entities to evaluate subrecipient risk, ensure each subaward is properly identified, issue required subaward notifications, verify suspension/debarment status, monitor subrecipient activities, and ensure subrecipients meet audit requirements. 2 CFR §200.302 further requires non-federal entities to identify, in their accounts, all federal awards received and expended, including amounts provided to subrecipients, to ensure accurate financial reporting and SEFA disclosure. Cause: Lack of formal policies and training regarding pass-through responsibilities under Uniform Guidance. Effect: The Organization cannot demonstrate compliance with federal pass-through requirements. This increases the risk of unallowable costs, subrecipient noncompliance, and misstated SEFA reporting due to the inability to determine and disclose amounts passed through to subrecipients . Questioned Costs: None noted during audit testing. Auditor’s Recommendation: The Organization should adopt written subrecipient monitoring and tracking policies, perform risk assessments, issue subaward notifications with all required elements, and implement procedures to accurately record and disclose the amounts provided to subrecipients in the general ledger and SEFA.
Subrecipient Monitoring U.S. Department of Health and Human Services Special Programs For The Aging, Title III, Part C, Nutrition Services – ALN #93.045 Criterion: Per CFR 200.331 the grantee must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Per CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The County passed through funding to nine subrecipients totaling $3,434,144. During 2024, management did not properly monitor the subrecipients. Specifically, for the nine of the nine subrecipients management was unable to provide any documented evidence of a monitoring being performed although the contract periods are ongoing for all nine subrecipients. Cause and Effect: Management lacks a process to ensure that the monitoring of subrecipients is occurring during the contract period, and evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Therefore, subrecipients were not properly monitored in accordance with 2 CFR 200.331 nor in accordance with the County’s Subrecipient Monitoring Policy. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that subrecipient files are adequately maintained, and perform risk assessment evaluations on all subrecipients to ensure they are effectively monitored during the contract period noted in the contractual agreements and the County’s Subrecipient Monitoring Policy. View of Responsible Officials: The Department of Senior Services agrees with this finding. Senior Services follows the monitoring standards established by the pass-through entity. However, the Department has implemented process improvements to ensure that all Program Year 2024_2025 compliance processes were met. The current period monitoring plan, risk assessments and monitoring have been completed. The Department will maintain an annual monitoring plan to ensure that all subrecipients are monitored in compliance with 2 CFR200 requirements.
Subrecipient Monitoring U.S. Department of Health and Human Services Substance Abuse Prevention – ALN #93.243 Criterion: Per CFR 200.331 the grantee must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Per CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The County passed through funding to three subrecipients totaling $4,324,361. During 2024, management did not properly monitor the subrecipients. Specifically, for one of the three subrecipients management was unable to provide any documented evidence of a monitoring being performed although the contract periods are ongoing for the subrecipient; and all three subrecipient files did not contain risk assessment evaluations. Cause and Effect: Management lacks a process to ensure that the evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Therefore, subrecipients were not properly monitored in accordance with 2 CFR 200.331 nor in accordance with the County’s Subrecipient Monitoring Policy. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that subrecipient files are adequately maintained, and risk assessment evaluations are performed on all subrecipients to ensure they are effectively monitored during the contract period. View of Responsible Officials: The Fulton County Department of Behavioral Health and Developmental Disabilities (DBHDD) concurs with the finding. DBHDD currently performs continuous monitoring activities with program subrecipients by conducting weekly meetings, reviewing monthly reports, invoices, and conducts quarterly performance reviews. DBHDD will strengthen its subrecipient monitoring internal controls by properly documenting these reviews in order to be incompliance with 2 CFR 200.331 and the County’s Subrecipient Monitoring Policy.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, 10.443 and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 A0242501X443G026 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Direct Award Periods: August 1, 2022 through July 31, 2027, September 1, 2023 through February 28, 2025, September 29, 2022 through September 30, 2027, September 27 2024 through September 26, 2027 and September 27, 2022 through June 30, 2026 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota-March 1, 2022 through February 28, 2025, April 1, 2023 through March 31, 2025, and September 1, 2020 through August 31, 2025; Board of Regents of the University of Wisconsin System-January 1, 2022 through December 31, 2026 and September 1, 2018 through August 31, 2024. Criteria or Specific Requirement: In accordance with 2 CFR § 200.331(a) (now 2 CFR § 200.332), a passthrough entity must make a case-by-case determination whether each agreement it makes for the disbursement of Federal funds casts the party receiving the funds in the role of a subrecipient or a contractor. This determination must be based on the substance of the relationship and not the form of the agreement. Condition: During the audit, we noted that the Organization has not established or implemented a formal process to determine whether entities receiving federal funds are subrecipients or contractors. There was no documentation or consistent methodology in place to support classification decisions for entities engaged under federal awards. Cause: The Organization has not developed or adopted policies and procedures to comply with the requirements under Uniform Guidance for distinguishing between subrecipients and contractors. Effect or Potential Effect: Without a formal and documented determination process, there is a risk that entities may be misclassified, leading to inappropriate application of monitoring procedures. For example, entities functioning as subrecipients may not be subject to required subrecipient monitoring, potentially resulting in noncompliance with federal regulations and increased risk of misuse of federal funds. Repeat Finding: No Recommendation: The Organization should develop and implement written policies and procedures to ensure proper determination and documentation of subrecipient versus contractor relationships in accordance with Uniform Guidance. Staff involved in federal program administration should be trained on how to apply these criteria consistently. Views of Responsible Officials: Management agrees with the finding and will implement and train on written policies and procedures to document the determination of subrecipient versus contractor.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes, federal award identification, subrecipient name, subrecipient’s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (ALN) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient’s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient’s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County’s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. Reporting requirements from the subrecipients to the County were also not met. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient’s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. Five of the five subrecipients were missing an internal checklist that is signed by the County Manager. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: Yes, repeat of prior year finding 2023-004. Recommendation: CLA recommends that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Federal Grantor: U.S. Department of Treasury Pass-through Grantor: n/a Assistance Listing No.: 21.027 Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2024 Compliance Requirement: Subrecipient Monitoring Known Questioned Costs: n/a Criteria: Part 1 of the Compliance and Reporting Guidance, issued by the U.S. Department of the Treasury, states that "SLFRF recipients that are pass-through entities as described under 2 CFR 200.1 are required to manage and monitor their recipients to ensure compliance with requirements of the SLFRF award pursuant to 2 CFR 200.332 regarding requirements for pass-through entities." Additionally, it is stated that pass-through entities are required to clearly identify to the subrecipient any and all compliance requirements for use of SLFRF funds. Condition: The County requires potential recipients of SLFRF funds to complete an application, which clearly identifies any and all compliance requirements for the use of the SLFRF funds. It also advises potential recipients to retain documentation of all uses of the funds and produce those documents to the County upon request. The County awarded SLFRF funds to two subrecipients. For one of the two subrecipients, the County did not ask the subrecipient to produce any documentation of the use of the funds and, therefore, did not perform their duty as a pass-through entity to manage and monitor their recipients to ensure compliance. Additionally, the County did not properly ascertain that any subrecipients expected to be audited as required by the Uniform Guidance, under subpart F, met this requirement (2 CFR 200.331(f)). This verification performed as part of the required monitoring under 2 CFR 200.331(d)(2) is required to ensure that the subrecipient takes timely and appropriate action on deficiencies detected through audits. Cause: Oversight. Effect: The County, as a pass-through entity, is required to manage and monitor their recipients to ensure compliance with requirements of the SLFRF. By failing to manage and monitor one of their subrecipients, the County is in violation of their responsibility as a pass-through entity. Recommendation: We recommend that the County implement procedures for monitoring the spending of SLFRF funds by subrecipients during, and upon completion of their projects to ensure compliance. Management's Response: The County has created a filing system for recipients of SLFRF funds and a calendar set to send reminder notices to get receipts and other information from recipients. The reminders will be set in 3 month increments from the time funds are awarded to recipient. Implementation will begin January 1, 2026 with reminder notices set in calendar.
Finding #2024-002 Lack of Subrecipient Monitoring – Rural eConnectivity Pilot Program (ALN 10.752) Federal Agency: U.S. Department of Agriculture Assistance Listing Number (ALN): 10.752 – Rural eConnectivity Pilot Program (Reconnect) Award Year: 2024 Compliance Requirement: Subrecipient Monitoring Criteria: In accordance with 2 CFR §200.331 through §200.333, pass-through entities must monitor the activities of subrecipients to ensure that federal awards are used for authorized purposes and in compliance with laws, regulations, and the provisions of contracts or grant agreements. Required monitoring activities include reviewing financial and programmatic reports, following up on deficiencies, and ensuring corrective actions are taken. Condition: The Town passed through approximately $1,650,000 in Rural eConnectivity (ReConnect) funds to a local electric Co-op for broadband infrastructure installation. However, the Town did not perform subrecipient monitoring by identifying applicable requirements for the award during or after the disbursement of these funds. The requirements imposed by the Town to the Co-op so the federal award was in accordance with federal statutes, regulations, and terms and conditions as well as any additional requirements in order for the Town to meet its own responsibilities for the federal award were not clearly communicated or imposed. Cause: Town officials stated that they believed subrecipient monitoring was not necessary because the funds had already been expended and the project was completed. Additionally, there was limited communication between the Town and the federal awarding agency, which contributed to a misunderstanding of the Town’s responsibilities as a pass-through entity. Effect: The lack of subrecipient monitoring represents noncompliance with federal requirements and creates a risk that funds may not have been used for their intended purpose. Without adequate oversight, the Town cannot demonstrate that the subrecipient complied with the terms and conditions of the federal award. Questioned Costs: None. Recommendation: We recommend that the Town establish and implement a formal subrecipient monitoring process for all federal funds passed through to other entities. This should include risk assessments, written agreements with compliance terms, ongoing monitoring (e.g., review of performance and financial reports), and follow-up procedures. The Town should also seek guidance from the awarding agency if responsibilities are unclear. Views of Responsible Officials: The Town concurs that applicable requirements for the award were not identified for the subrecipient, however the Town did monitor activities of the subrecipient. The Town monitored activities to ensure funds were used for allowable activities.
SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.
SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.
SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.
Finding 2024-003: SEFA Preparation— Subrecipient vs. Subcontractor Determinations Federal Program(s): • Adv HIV & AIDS Epidemic Control (AHEC) Activity - ALN 98.U01 • ASAP & ASAP II – ALN 98.U02 • Zambia Local – ALN 98.U03 Criteria: The auditee must prepare the financial statements, including the schedule of expenditures of federal awards (SEFA) in accordance with 2 CFR 200.510 (2 CFR 200.508 (b)). The SEFA must include the total amount provided to subrecipients from each Federal program (2 CFR 200.510 (b)(4)). Condition: Subcontractor amounts were improperly included in the Amounts Provided to Subrecipients column on the SEFA. Cause: Ineffective design and implementation of internal controls around SEFA preparation. Effect: There were approximately $2.6 million in subcontractor expenses incurred by IntraHealth that were improperly included in the Amounts to Subrecipients column on the SEFA as they did not represent payments to subrecipients. Questioned costs: None Context: Management made improper subrecipient vs. subcontractor determinations, resulting in inaccurate SEFA preparation. This resulted in $2.6 million being removed from the Amounts Provided to Subrecipients column in the original SEFA provided to the auditors by management. Repeat finding: No Recommendation: We recommend that management review internal controls in place around the SEFA preparation and ensure an independent review is being performed around amounts reported as Amounts to Subrecipients against 2 CFR 200.331, Subrecipient and subcontractor determinations. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Finding 2024-003: SEFA Preparation— Subrecipient vs. Subcontractor Determinations Federal Program(s): • Adv HIV & AIDS Epidemic Control (AHEC) Activity - ALN 98.U01 • ASAP & ASAP II – ALN 98.U02 • Zambia Local – ALN 98.U03 Criteria: The auditee must prepare the financial statements, including the schedule of expenditures of federal awards (SEFA) in accordance with 2 CFR 200.510 (2 CFR 200.508 (b)). The SEFA must include the total amount provided to subrecipients from each Federal program (2 CFR 200.510 (b)(4)). Condition: Subcontractor amounts were improperly included in the Amounts Provided to Subrecipients column on the SEFA. Cause: Ineffective design and implementation of internal controls around SEFA preparation. Effect: There were approximately $2.6 million in subcontractor expenses incurred by IntraHealth that were improperly included in the Amounts to Subrecipients column on the SEFA as they did not represent payments to subrecipients. Questioned costs: None Context: Management made improper subrecipient vs. subcontractor determinations, resulting in inaccurate SEFA preparation. This resulted in $2.6 million being removed from the Amounts Provided to Subrecipients column in the original SEFA provided to the auditors by management. Repeat finding: No Recommendation: We recommend that management review internal controls in place around the SEFA preparation and ensure an independent review is being performed around amounts reported as Amounts to Subrecipients against 2 CFR 200.331, Subrecipient and subcontractor determinations. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Finding 2024-003: SEFA Preparation— Subrecipient vs. Subcontractor Determinations Federal Program(s): • Adv HIV & AIDS Epidemic Control (AHEC) Activity - ALN 98.U01 • ASAP & ASAP II – ALN 98.U02 • Zambia Local – ALN 98.U03 Criteria: The auditee must prepare the financial statements, including the schedule of expenditures of federal awards (SEFA) in accordance with 2 CFR 200.510 (2 CFR 200.508 (b)). The SEFA must include the total amount provided to subrecipients from each Federal program (2 CFR 200.510 (b)(4)). Condition: Subcontractor amounts were improperly included in the Amounts Provided to Subrecipients column on the SEFA. Cause: Ineffective design and implementation of internal controls around SEFA preparation. Effect: There were approximately $2.6 million in subcontractor expenses incurred by IntraHealth that were improperly included in the Amounts to Subrecipients column on the SEFA as they did not represent payments to subrecipients. Questioned costs: None Context: Management made improper subrecipient vs. subcontractor determinations, resulting in inaccurate SEFA preparation. This resulted in $2.6 million being removed from the Amounts Provided to Subrecipients column in the original SEFA provided to the auditors by management. Repeat finding: No Recommendation: We recommend that management review internal controls in place around the SEFA preparation and ensure an independent review is being performed around amounts reported as Amounts to Subrecipients against 2 CFR 200.331, Subrecipient and subcontractor determinations. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Finding 2024-003: SEFA Preparation— Subrecipient vs. Subcontractor Determinations Federal Program(s): • Adv HIV & AIDS Epidemic Control (AHEC) Activity - ALN 98.U01 • ASAP & ASAP II – ALN 98.U02 • Zambia Local – ALN 98.U03 Criteria: The auditee must prepare the financial statements, including the schedule of expenditures of federal awards (SEFA) in accordance with 2 CFR 200.510 (2 CFR 200.508 (b)). The SEFA must include the total amount provided to subrecipients from each Federal program (2 CFR 200.510 (b)(4)). Condition: Subcontractor amounts were improperly included in the Amounts Provided to Subrecipients column on the SEFA. Cause: Ineffective design and implementation of internal controls around SEFA preparation. Effect: There were approximately $2.6 million in subcontractor expenses incurred by IntraHealth that were improperly included in the Amounts to Subrecipients column on the SEFA as they did not represent payments to subrecipients. Questioned costs: None Context: Management made improper subrecipient vs. subcontractor determinations, resulting in inaccurate SEFA preparation. This resulted in $2.6 million being removed from the Amounts Provided to Subrecipients column in the original SEFA provided to the auditors by management. Repeat finding: No Recommendation: We recommend that management review internal controls in place around the SEFA preparation and ensure an independent review is being performed around amounts reported as Amounts to Subrecipients against 2 CFR 200.331, Subrecipient and subcontractor determinations. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Finding Number: 2024-008 Prior Year Finding Number: 2023-015 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 – 09/20/2024 Government Department/Agency: Office of the Deputy Mayor for Public Safety and Justice (DMPSJ); Office of Neighborhood Safety and Engagement (ONSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information outlined in the section noted above, pre-award assessment, indirect cost rated for the award, assistance listing number, finding and award follow-up and other pertinent actions. In accordance with the Uniform Guidance in 2 CFR Section 200.332 Requirements for Pass-Through Entities requires that pass-through entities Verify that the subrecipient is not excluded or disqualified in accordance with Section 180.300. Verification methods are provided in Section 180.300, which include confirming in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. In accordance with the Uniform Guidance in 2 CFR Section 200.332(e) Requirements for Pass-Through Entities requires that pass-through entities must: Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: • Review financial and performance reports • Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. • Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521. • Resolve audit findings specifically related to the subaward. However, the pass-through entity is not responsible for resolving cross-cutting audit findings that apply to the subaward and other Federal awards or subawards. If a subrecipient has a current Single Audit report and has not been excluded from receiving Federal funding (meaning, has not been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant agency for audit or oversight agency for audit to perform audit follow-up and make management decisions related to cross-cutting audit findings in accordance with section Section 200.513(a)(4)(viii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Condition – The program’s documented subrecipient monitoring requirements includes risk assessments, monitoring of subrecipients and the submission and review of monthly financial and performance reports. During our testing of the subrecipient’s compliance requirements, we noted the following issues: • Our testing of the program’s subrecipient monitoring requirements includes submission and review of monthly financial and performance reports. We noted for one (1) out of 17 samples, the subrecipient failed to submit their monthly financial and performance reports. • For one (1) out of 17 samples, the agency had no evidence to support it had performed the mandatory follow up on reported audit findings in the subrecipient’s audit report for the Corrective Action taken by the subrecipient to remediate the finding. • For one (1) out of 17 samples, the agency had no evidence that a debarment check was performed before the contract was entered into. The agency’s documented policies and the procurement procedures mandate a debarment check before entering into new contracts. Questioned Costs – Not determinable. Context – This is a condition identified per review of various District agencies’ compliance with specified monitoring requirements on the program’s subrecipients using a statistically valid sample. Effect – Subrecipients may not be properly monitored, which may result in subawards being used for unauthorized purposes in violation of the terms and conditions of the subawards or that the subaward performance goals were not achieved. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. Recommendation – We recommend that the agencies maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – While DMPSJ doesn’t agree that it is out of compliance, DMPSJ will ensure documentation is maintained regarding its oversight of grant management. ONSE acknowledges and accepts the finding that the subrecipient failed to submit their monthly and performance reports. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section. BDO’s Response – We have reviewed management’s response and our finding remains as indicated.