NATIONAL SCIENCE FOUNDATION Program Information Assistance Listing # 47.076 STEM Education 2023-001 Documentation of Subawards Material Weakness Criteria: The Code of Federal Regulations (CFR) Section 200.331 requires a pass-through entity (PTE) to 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)). Condition: A sample of three subawards were selected. Two of the three subawards did not have a subaward agreement. Cause: This is the first year that the Foundation was required to have a Single audit and as such is still in the process of developing and adopting specific policies for sub-awards and subrecipients. Effect: During 2023 contemporaneous documentation was not obtained from sub-awardees and sub-recipients. Auditor’s Recommendation: We recommend that management require all sub-awardees to have a subaward agreement or memorandum of understanding (MOU). Views of Responsible Officials and Planned Corrective Actions: The Foundation’s management team agrees with this finding and remains fully committed to both developing and adopting specific policies for sub-awards and sub-recipients which will better ensure its internal practices are in alignment with the Uniform Guidance.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: COVID-19 Community Development Block Grants/State’s Program and Non- Entitlement Grants in Hawaii Assistance Listing Number: 14.228 Federal Award Identification Number and Year: B-20-DW-27-0001, 2023 Pass-Through Agency: Minnesota Department of Employment and Economic Development, Business and Community Development Division Pass-Through Number: B-20-DW-27-0001 Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Recipients of $150,000 or more of grant funds must submit a quarterly and annual report, no later than 7 days after the end of each calendar quarter and 15 days after the fiscal year end, respectively. Quarterly and annual reports must be in accordance with reporting requirements set forth in section 15011 of the CARES Act. The Grantee will monitor the activities of the sub-recipient according to 2 CFR §200.303 and 2 CFR §200.331 as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the sub-award; and that sub-award performance goals are achieved. This includes reviewing financial and programmatic reports required by the pass-through entity. Condition: There was no oversight by County management of the reports being submitted by the subrecipient to the State. Questioned Costs: None noted. Context: For two of two quarterly reports and one of one annual reports tested, it was noted that there was no review by County management of the reports submitted by the subrecipient and the County received a copy of the report at the same time as the submission was completed. Cause: Insufficient management oversight. Effect: Ineligible costs could be reported. Repeat Finding: No. Recommendation: We recommend that the County reviews their policies to ensure reporting requirements are met including a review of the subrecipient reports prior to submission. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context The County received a total State and Local Fiscal Recovery Funds (SLFRF) allocation of $13,177,707. During the audit period, the County provided subawards of SLFRF funds to other entities. As a pass-through entity, the County must: Identify the award and the applicable requirements to each subrecipient. Evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for an authorized purpose, complies with the terms and conditions of the subaward, and achieves performance goals. Subawards, totaling $290,000, were provided to two different entities. Both subrecipient agreements associated with the subawards were selected for testing. For the two agreements tested, the following information was incomplete or missing: The federal award identification number (FAIN). The federal award date of award to the recipient by the federal agency. The name of the federal awarding agency, pass-through entity (auditee), and contact information for awarding official of the pass-through entity (auditee). The Assistance Listings Number and Title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at time of disbursement. Furthermore, the County did not have an evaluation of the subrecipients' risk of noncompliance or monitoring activities demonstrating compliance with the subrecipient monitoring requirement. The County did not request any financial or audit documentation from the subrecipients. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 21 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.331(a) states: "Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. See definition for Subaward in § 200.1 of this part. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity: (1) Determines who is eligible to receive what Federal assistance; (2) Has its performance measured in relation to whether objectives of a Federal program were met; (3) Has responsibility for programmatic decision-making; (4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and (5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity." 2 CFR 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward . . . (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; INDIANA STATE BOARD OF ACCOUNTS 22 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) 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; (3) 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; (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. INDIANA STATE BOARD OF ACCOUNTS 23 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with § 200.405(d). (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward. (b) Evaluate each subrecipient's risk of noncompliance with Federal statues, regulations, and the terms and conditions of the subaward for purposes of determined the appropriate subrecipient monitoring . . . (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (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 pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. . . ." Cause The system of internal controls as established by the management of the County was not properly designed nor implemented. The County was unable to provide documentation that monitoring procedures were in place over subrecipients. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot be sure subrecipients are provided an adequate subaward agreement, with all required elements and are adequately monitored. As such, subaward agreements entered into by the County did not include all the required elements. In addition, the County did not properly monitor the non-profit to ensure proper spending of the federal funds. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. INDIANA STATE BOARD OF ACCOUNTS 24 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls and develop policies and procedures to ensure subrecipients are provided with an adequate subaward agreement and monitored as appropriate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002: Sub-recipients Federal Program: Assistance Listing Number 19.124 Criteria: As noted in 2 CFR 200.331 part (d): Monitor the activities of the sub-recipient as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions for the sub-award; and that sub-award performance goals are achieved. Condition: During our audit, we noted that the Center does not have updated policies and procedures in place for monitoring sub-recipients to be in compliance with 2 CFR 200.331. We also noted the pre-award risk assessment procedures were not properly documented. Lastly, we noted the Center did not perform the FFATA (Federal Funding Accountability and Transparency Act) reporting requirements. Cause: The Center does not have updated policies and procedures in place to be in compliance with monitoring activities of their sub-recipients. During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Our audit procedures consisted of substantive testwork over a sample of sub-recipient expenditures. We consider our sample to representative of the population. Effect or Potential Effect: The Center could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: The Center failed to properly document its due diligence with respect to risk assessment procedures and FFATA reporting requirements. Identification as a Repeat Finding, if Applicable: 2022-001 Recommendation: As a result, we concluded that certain enhancements would add value to the Center’s due diligence with respect to its monitoring processes, and the following are our recommendations (of activities/documents that should be performed/maintained by the Center: - Enhance pre-award risk assessment; an evaluation and assignment of level of the financial (and programmatic) risk associated with the intended recipient/grantee for the purpose of determining the expected level of oversight and monitoring during the period of performance. - Enhance documentation of evidence of an evaluation process with respect to the identification of the prospective recipient. - A regularly documented review process with respect to periodic financial reports received from grantees. - An evaluation of the need for a periodic site visit. - Receipt of the grantee’s annual audit reports, if available (to ensure there are no weaknesses or deficiencies in internal control during the grant period). If there are deficiencies that directly affect the program, then a corrective action plan be established. - The Center will need to evaluate the FFATA reporting requirements and comply with the act.
Criteria: All pass-through entities must perform certain identification and monitoring procedures over subrecipients, including but not limited to the following: -A pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a federal subaward and includes the following specific required information: federal award identification information, all requirements imposed by the pass-through entity, any additional requirements to meet the pass-through entity’s responsibilities, information on the indirect cost rate, requirements to permit access to subrecipients’ records and statements, and appropriate closeout terms and conditions (2 CFR section 200.332). -A pass-through entity must ascertain that subrecipients expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement (2 CFR section 200.331(f)). This verification may be performed as part of the required monitoring under 2 CFR section 200.331(d)(2) to ensure that the subrecipient takes timely and appropriate action on deficiencies detected though audits. -When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. All non-procurement transactions entered into by a passthrough entity, including subawards to subrecipients, are considered covered transactions. Condition: The subaward agreements for the COVID-19 – Coronavirus State and Local Fiscal Recovery Funds did not include the required federal identification information per 2 CFR section 200.332. Additionally, there were no processes in place to ensure subrecipients were not suspended or debarred or to ensure the required review and follow up of subrecipient's audit findings was performed. Cause: Jewish Family and Children’s Service of Minneapolis was not aware of these responsibilities, and they were not outlined or clearly communicated in the original grant agreement. Effect: The conditions noted above resulted in noncompliance over subrecipient monitoring. Context: A sample of two subrecipients was selected for audit from a population of four. Questioned Costs: $0 Identification of Repeat Finding: The finding is not a repeat finding. Recommendation: Jewish Family and Children’s Service of Minneapolis should examine and update its subrecipient monitoring policies and ensure they conform to Uniform Guidance requirements and guidelines. Views of Responsible Officials and Planned Corrective Actions: Jewish Family and Children’s Service of Minneapolis agrees with the finding and is in the process of re-evaluating its subrecipient monitoring policies to include all requirements of the Uniform Guidance.
2023-004: 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. Statistical sampling was not used in making sample selections. 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.
METROPOLITAN TRANSPORTATION AUTHORITY (A Component Unit of the State of New York) SCHEDULE OF FINDINGS AND QUESTIONED COSTS- FEDERAL AWARDS (CONTINUED) YEAR ENDED DECEMBER 31, 2023 Reference Number: 2023-001 Federal Agency: U.S. Department of Homeland Security Federal Program: Rail and Transit Security Grant Program ALN Number: 97.075 Contract Number: FE2019-RA-00004; FE2020-RA-00005; FE2021-RA-00004; FE2022-RA-00006 Compliance Requirement: Subrecipient Monitoring Type of Finding: Deficiency-Non-Compliance 1. CRITERIA Subrecipient Monitoring - As stated in Uniform Grant Guidance - §200.331 Requirements for pass-through entities, 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: • Subrecipient name (which must match the name associated with its unique entity identifier); • Subrecipient’s unique entity identifier; • Federal Award Identification Number (FAIN); • Assistance Listing Number (ALN) Number and Name; the pass-through entity must identify the dollar amount made available under each Federal award and the ALN number at time of disbursement; • Identification of whether the award is Research & Development; and • Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414 Indirect (F&A) costs); 2. CONDITION/PERSPECTIVE Metropolitan Transportation Authority (“MTA”) has subrecipient monitoring procedures in place. MTA has corporate policies and procedures regarding subrecipient contracts. We reviewed Rail and Transit Security Grant Program’s subrecipient monitoring compliance. This program had one subrecipient. Based on our review of the subrecipient contract for this program, we noted that the subrecipient contract did not have all the required elements as stated in §200.331. 3. CAUSE MTA did not ensure that the contract between MTA and the subrecipient included the ALN and all other required elements as required by 2 CFR; §200.331. 4. EFFECT The Subrecipient may not identify an MTA contract as a federal program, and therefore may not follow the required federal award requirements. Additionally the subrecipient may not include the program in the Subrecipient’s schedule of expenditures of federal awards and the program may not be audited as part of the Subrecipient’s single audit. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend that MTA implement policies and procedures to communicate the federal grant information to all subrecipients in accordance with Uniform Grant Guidance CFR 200.331 Subrecipient Requirements. 7. QUESTIONED COST None. 8. VIEWS OF RESPONSIBLE OFFICIAL The MTA Office of Security is acknowledging the sub-recipient agreement did not include the ALN Number – 97.075, Identification of whether the award is R&D and Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414 on the check list. The MTA does provide a copy of the award letter to our sub-recipient(s) and we perform yearly sub-recipient monitoring of our sub-recipient(s). Also, see “Corrective Action Plan”.
2023-004: U.S. Department of Agriculture Soil and Water Conservation Assistance Listing #10.902 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance and Non-Compliance Grant Award Number: NR230436XXXXC017 Criteria: The OMB Compliance Supplement (2 CFR 200.331) requires that pass-through entities (PTE) disbursing federal funds to subrecipients have a formalized policy for identifying the subrecipient meets the applicable requirements, for evaluating risk, for monitoring subrecipient activity, and for ensuring accountability of For-Profit Subrecipients, if applicable. As part of the risk assessment, entities must ensure subrecipients are not suspended or debarred. During monitoring activities, the PTE is required to obtain the subrecipients’ audit reports so that any findings can be evaluated by the PTE’s management. Condition: Several required elements per 2 CFR 200.331 being absent from the subrecipient agreements, including: - Subrecipients’ unique entity identifier - Federal award date of award to Wallowa Resources by the USDA - ALN number and dollar amount made available by the USDA Wallowa Resources was unable to provide support that subrecipients were assessed for suspension and debarment during the risk assessment. Cause: Wallowa Resources did not have a formalized policy for subrecipient monitoring which resulted in several required elements per 2 CFR 200.331 being absent from the subrecipient agreements, lack of retention for work performed during the risk assessment and monitoring activities. Effect: Certain compliance elements related to subrecipient monitoring not met as a result of ineffective controls. Questioned Costs: None Context/Sampling: There were four subrecipients within the scope of this audit, of which 75% were tested and the above-noted items were consistent. Repeat Finding from Prior Year: No Recommendation: We recommend Wallowa Resources implement a formal subrecipient monitoring policy using the guidance of 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
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 (CFDA) 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. Quarterly reports were also not submitted to the County by the subrecipients subsequent to funding. 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. One of the five subrecipients was missing an internal checklist that is signed by the County Manager. Five of the five subrecipients were provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. 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 2022-004. 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.
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 (CFDA) 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. Quarterly reports were also not submitted to the County by the subrecipients subsequent to funding. 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. One of the five subrecipients was missing an internal checklist that is signed by the County Manager. Five of the five subrecipients were provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. 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 2022-004. 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.
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 (CFDA) 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. Quarterly reports were also not submitted to the County by the subrecipients subsequent to funding. 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. One of the five subrecipients was missing an internal checklist that is signed by the County Manager. Five of the five subrecipients were provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. 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 2022-004. 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.
NATIONAL SCIENCE FOUNDATION Program Information Assistance Listing # 47.076 STEM Education Grant No. (FAIN) 2005484 Grant Period - September 1, 2020 – August 31, 2023 Grant No. (FAIN) 2005942 Grant Period – August 15, 2020 – July 31, 2024 2023-001 Documentation of Subawards Material Weakness Criteria: The Code of Federal Regulations (CFR) Section 200.331 requires a pass-through entity (PTE) to 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)). Condition: A sample of three subawards were selected. Two of the three subawards did not have a subaward agreement. Also, there were no controls in place to detect or prevent these agreements from not being obtained. Cause: This is the first year that the Foundation was required to have a Single audit and as such is still in the process of developing and adopting specific policies for subawards and subrecipients. Effect: During 2023 contemporaneous documentation was not obtained from subawardees and subrecipients. Auditor’s Recommendation: We recommend that management adopt an internal control policy which requires all sub-awardees to have a subaward agreement or memorandum of understanding (MOU). Views of Responsible Officials and Planned Corrective Actions: The Foundation’s management team agrees with this finding and remains fully committed to both developing and adopting specific policies for subawards and subrecipients which will better ensure its internal practices are in alignment with the Uniform Guidance.
2 CFR § 200.331 requires a pass-through entity to clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward by providing the information described in 2 CFR section 200.331(a)(1); (2) 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 award; and (3) any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibilities for the Federal award. The Harrison County Department of Job and Family Services (HCDJFS) did not have proper internal controls in place to ensure subrecipient monitoring was properly performed. HCDJFS contracted with a subrecipient to provide services related to its Comprehensive Case Management Employment Program (CCMEP) of the Temporary Assistance for Needy Families (TANF) federal grant. The HCDJFS did not perform necessary monitoring procedures under the Uniform Guidance over this subrecipient. Failure to adequately monitor subrecipients increases the risk that subrecipients may not properly utilize federal funds or adhere to program requirements. The Harrison County Department of Job and Family Services should review the Uniform Guidance in 2 CFR part 200, which lists its responsibilities as a pass-through entity, establish and maintain its own internal control procedures over compliance with grant requirements, and create a subrecipient monitoring policy to meet the Uniform Guidance audit requirements. The HCDJFS should also document its subrecipient monitoring controls and reviews and maintain the documentation over the monitoring over its subrecipient.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Questioned Costs: $88,135 Criteria: In accordance with 2 CFR § 200.403–.405, costs charged to federal awards must be allowable, allocable, and supported by valid documentation. Additionally, under 2 CFR § 200.318–.320, all contracts must be awarded with clear terms and timeframes and must be executed prior to the provision of goods or services. For subawards, 2 CFR § 200.331 requires that subrecipient agreements be in writing and include all legally required terms and conditions. Payments made outside the terms of a written, active contract — particularly beyond expiration dates — may be deemed unallowable due to lack of legal obligation and documentation. Condition: Of the ten contracts selected for testing, seven were expired at the time payments were made. In total, the Organization paid $88,135 for services rendered beyond the contract end dates, including payments to one subrecipient and multiple consultants or contractors. The Organization indicated that all payments were budgeted within the approved federal grant agreements; however, these payments were not supported by amendments, extensions, or new agreements authorizing continued work or compensation. Additionally, in four additional instances, one selected for testing, contracts specified hourly or deliverable rates and defined service periods but contained inaccurate or inconsistent total compensation amounts. One of four contracts made payments under these agreements that exceeded the stated contract total. Overall, the discrepancies created ambiguity about the authorized funding limit and raise concerns about enforceability and allowability of the costs under federal award terms. Cause: The Organization did not have sufficient procedures in place to monitor contract expiration dates or to ensure that updated agreements were executed before authorizing payments. In these cases, services continued based on verbal agreements or historical practice rather than a valid, enforceable contract. Effect: As a result, $88,135 in costs were incurred and charged to the federal grant without a valid contractual basis. Even though the costs were budgeted, the lack of a valid, active contract invalidates the legal obligation required for allowability under 2 CFR § 200.403 and § 200.405. Therefore, the costs are questioned pending resolution with the federal awarding agency. Furthermore, the absence of executed agreements represents a significant internal control deficiency and increases the risk of unauthorized or disputed expenditures. The inconsistencies in contractual rates expose the Organization to the risk of paying amounts not clearly authorized by written agreements and may result in questioned or disallowed costs, especially if contract limits are exceeded. Weaknesses in contract drafting and review also constitute a significant deficiency in internal control over compliance. Identification of Repeat Finding: ☐ Yes ☑ No Recommendation: We recommend that the Organization: • Develop and implement a contract tracking system to monitor start and end dates. • Require that all contracts, extensions, and amendments be executed before services are rendered or payments are issued. • Provide training to program and procurement staff on federal procurement standards and contract management. • Review existing contracts to ensure compliance and take corrective action for any others that may have expired. • Work with the awarding agency to determine whether any portion of the $88,135 must be refunded.
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.
2023-008 - Uniform Guidance Subrecipient Monitoring - Significant Deficiency/Noncompliance Federal Program: Assistance Listing #21.027, Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of Treasury, Pass Through Entity Identifying Number: Not Available Assistance Listing #21.023, Emergency Rental Assistance Program, U.S. Department of Treasury, Passed through the Pennsylvania Department of Human Services, Pass-Through Entity Identifying Number: N/A Prior Year Finding Number 2022-004 Criteria: The requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), §200.331 Requirements for Pass-through Entities, requires entities who pass federal funding through to subrecipients evaluate each subrecipient's risk of noncompliance. As detailed in 2 CFR sections 200.331(d) through (f), the Uniform Guidance requires pass-through entities to 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. This includes issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient, as detailed in 2 CFR section 200.521. Condition/Context: As part of our follow-up on previous audit findings and based on our current year testing, it was noted that the County is not formally documenting its monitoring activities over its subrecipients in compliance with the Uniform Guidance. Questioned Costs: N/A Cause: While the County has monitoring processes in place for subrecipients, it is not currently documenting certain of the initial risk assessment decisions or the occurrence of ongoing monitoring activities for its subrecipient, representing a significant deficiency in internal control over compliance. Effect: The County is not in compliance with certain requirements of the Uniform Guidance. Recommendation: We recommend that County management perform and document the various monitoring activities performed with regard to its subrecipients. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to provide better oversight and monitoring of entities that receive pass-through grant dollars. See corrective action plan.
2023-008 - Uniform Guidance Subrecipient Monitoring - Significant Deficiency/Noncompliance Federal Program: Assistance Listing #21.027, Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of Treasury, Pass Through Entity Identifying Number: Not Available Assistance Listing #21.023, Emergency Rental Assistance Program, U.S. Department of Treasury, Passed through the Pennsylvania Department of Human Services, Pass-Through Entity Identifying Number: N/A Prior Year Finding Number 2022-004 Criteria: The requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), §200.331 Requirements for Pass-through Entities, requires entities who pass federal funding through to subrecipients evaluate each subrecipient's risk of noncompliance. As detailed in 2 CFR sections 200.331(d) through (f), the Uniform Guidance requires pass-through entities to 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. This includes issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient, as detailed in 2 CFR section 200.521. Condition/Context: As part of our follow-up on previous audit findings and based on our current year testing, it was noted that the County is not formally documenting its monitoring activities over its subrecipients in compliance with the Uniform Guidance. Questioned Costs: N/A Cause: While the County has monitoring processes in place for subrecipients, it is not currently documenting certain of the initial risk assessment decisions or the occurrence of ongoing monitoring activities for its subrecipient, representing a significant deficiency in internal control over compliance. Effect: The County is not in compliance with certain requirements of the Uniform Guidance. Recommendation: We recommend that County management perform and document the various monitoring activities performed with regard to its subrecipients. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to provide better oversight and monitoring of entities that receive pass-through grant dollars. See corrective action plan.
Federal Agency: U.S. Department of Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP3412 - 2023 Award Period: 2023 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Related to subrecipient monitoring requirements of State and Local Fiscal Recovery Funds, there should be a documented control in place to ensure all subrecipients of federal grants are in compliance with Title 2 U.S. Code of Federal Regulations § 200.331 - 200.333. Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our testing it was noted that, for 1 of 1 subrecipients tested, the county was not able to provide any documentation of the review performed to ensure they are meeting federal requirements surrounding subrecipient monitoring. Questioned costs: None Context: 1 of 1 subrecipients selected for testing were missing documentation. Cause: The County has a monitoring checklist they complete, but did not have adequate documentation that it was completed. Effect: It is possible that the County subrecipient could be ineligible to receive funding if an error is made in compiling the information since there is no control in place in some instances to ensure that errors are not being made prior to payment. Repeat finding: No Recommendation: We recommend that the County establish clear policies and procedures for formal review and approval of subrecipient monitoring checklists. Views of responsible officials: There is no disagreement with the finding.
Grant No(s): 1505-0266 Criteria: Louisiana Revised Statute §24:523 requires public agencies to report any misappropriation, theft, or loss of public funds or assets to the Louisiana Legislative Auditor’s Office (LLA) immediately upon discovery. Additionally, 2 CFR §200.113 mandates that non-federal entities disclose in writing any violations of federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the federal award. 2 CFR §200.331 and Treasury Emergency Rental Assistance (ERA) Program Guidance require that entities establish and maintain effective controls to ensure that assistance is provided only to eligible recipients. This includes verifying income, housing status, and risk of homelessness or housing instability. Condition: ERA personnel at Jefferson Parish identified instances of what appears to be externally caused fraudulent activity that occurred in 2022 that were found and reported to the Parish’s internal auditor, local law enforcement (Jefferson Parish Sheriff’s Office) and the Federal Bureau of Investigation (FBI). The misappropriation of public funds was not reported to the LLA and the Jefferson Parish District Attorney’s Office in a timely manner. In addition, the Parish was not insured over these types of misappropriations. See Attachment A for additional information required by the LLA regarding each instance of fraud. Universe/Population: The universe/population for Eligibility testing is 4,214 Participants receiving a total of $12,070,966 in assistance through rental and utility assistance in 2023. We selected 60 participants for testing of eligibility compliance requirements applicable to the program, noting no exceptions in our 2023 testing. Cause: In 2022, Jefferson Parish did not have adequate policies and procedures over the application and monitoring of eligibility requirements on all potential awardees of rental and utility assistance. The Parish’s internal controls did identify that the fraud occurred. Also, the Parish did not have adequate procedures in place to ensure that instances of fraud were reported to the LLA and the District Attorney’s Office timely. Effect: The failure to report the fraudulent activity and ensure proper eligibility review resulted in noncompliance with both state and federal requirements, delayed corrective actions, and increased the risk of continued misuse of federal funds. Questioned Costs: The questioned costs of $424,515 represent payments made in 2022 to ineligible recipients due to fraudulent activity. We did not have any exceptions in our eligibility testing for 2023. Identification of a repeat finding: This is not a repeat finding. Recommendation: Jefferson Parish should continue to monitor eligibility of award requirements and application of those requirements. View of Responsible Officials: With the support of a new leadership team, Jefferson Parish is committed to strengthening grants and financial management and enhancing the reliability of grants reporting. The Parish has engaged Deloitte & Touche LLP as a consultant to assist in establishing regular review practices, policies, procedures, and internal controls with the goal of improving audit readiness, refine documentation procedures, and strengthen internal controls to support accurate and complete financial data going forward. As part of this effort Jefferson Parish and Deloitte are working across Departments to re-define organizational structure, to establish governance and oversight between finance, accounting, and programmatic departments. Jefferson Parish and Deloitte are also working to implement data quality improvement measures, including the establishment of quarterly grants reconciliation and review processes. Jefferson Parish has also engaged Infor in the implementation of new financial and reporting technology to support improved financial processing and controls.
2023-002 Subrecipient Monitoring Public Health Training Centers Program – Assistance Listing No. 93.516 Award Number: 1 T29HP46735‐01‐00 – Award Period: September 15, 2022 through September 14, 2025 Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health – Assistance Listing No. 93.967 Award Number: G2513_AG-1146 Amendment #1 – Award Period: February 1, 2023 through November 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: During our testing of subrecipients, we noted documentation was not maintained demonstrating the Organization checked for suspension and debarment prior to contracting with subrecipients, subrecipient vs contractor determinations, evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring, or obtaining/reviewing the most recent single audit reports for subrecipients to address findings related to a particular subaward. Criteria: According to 2 CFR 200.331, pass-through entities must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. 2 CFR 200.332 requires every subaward agreement include certain information including the subrecipient’s unique entity identifier (see paragraph (a) for a list of all required data elements); additionally, all pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (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 pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). 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. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in § 200.425. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations. 2 CFR 180.22 requires that contract awards not be made to parties listed on the government wide exclusions in the system for Award Management, which contains the names of parties debarred, suspended or otherwise excluded by agencies as well as parties declared ineligible under statutory or regulatory authority. Questioned Costs: None. Cause: The Organization did not have a process in place to ensure all required elements of subrecipient monitoring were documented and retained in their records. Effect: Inadequate monitoring procedures and records may not detect subrecipient noncompliance on a timely basis. This could result in the Organization entering into subrecipient agreements with organizations who are ineligible to receive federal funds or might otherwise not comply with federal laws and regulations. Recommendation: We recommend that management implement procedures to ensure that future subrecipient agreements are compared against all requirements in 2 CFR 200.331, 2 CFR 200.332, and 2 CFR 180.22 and that formal documentation of such considerations be maintained. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Finding 2023-001: Subrecipient Monitoring and Reporting Federal Programs: Assistance Listing Number #19.522 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Also, as noted in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. Condition: A full and complete risk assessment for each potential subrecipient was not documented for two subrecipients in our sample. In addition, WRC did not register their subawards in FSRS. Cause: WRC did not document the risk assessment procedures it performed and did not apply the latest compliance supplement issued by the Office of Management and Budget regarding subaward reporting requirements in FSRS. Effect or Potential Effect: WRC could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Also, WRC failed to provide the required reporting on subrecipients within FSRS in compliance with the Uniform Guidance. Questioned Costs: None noted. Context: WRC did not document the risk assessments it performed on the two subrecipients in our sample and did not register subawards in excess of $30,000 with FSRS. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that WRC ensure that risk assessment procedures over its subrecipients are performed and documented prior to providing subawards. Based on these risk assessments, WRC should assign a risk level to each subrecipient and then determine the monitoring tools to apply based on these risk levels. We also recommend that WRC update its policies and procedures to ensure all first tier subawards in excess of $30,000 are accurately and timely registered in FSRS and WRC should ensure subawards are reported in FSRS within the required time-frame.
Federal Agency: U.S. Department of Education Federal Program Name: Assessment and Evaluation Language Resource Center Assistance Listing Number: 84.229A Federal Award Identification Number and Year: 7773322/GR205913 Award Period: 08/15/2018- 08/14/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see §§200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for pass-through entities, paragraph (a)(1)(iv)). CAL should have internal controls designed to ensure compliance with these provisions. Condition: We noted CAL recorded expenses to an award after the contract’s period of performance ended in August 2023. The expenses were for an event that occurred in November of 2023. CAL did not identify and properly record the timing difference. Questioned costs: None Context: One of the three invoices we examined were not properly reflected within the financial statements and improperly allocated to an award outside of the period of performance. Management did provide an adjustment to the financial statements and Schedule of Expenditures of Federal Awards. Cause: The policies and procedures surrounding review of invoices and the dates costs were incurred were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of period of performance; however, the lack of effective internal controls over compliance requirements provides an opportunity for noncompliance. Repeat Finding: N/A Recommendation: We recommend CAL ensure consistent application review of the dates invoice were incurred and the proper reflection within the financial statements and allocation to awards. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding. As of January 2, 2024 CAL, hired a staff account (Melanie Richards) to ensure all expenses are recorded in compliance with performance periods. The Associate Director of Finance will review all postings monthly and consult with the Vice President of Finance on any corrections or recommendations.
Federal Agency: U.S. Department of Education Federal Program Name: Assessment and Evaluation Language Resource Center Assistance Listing Number: 84.229A Federal Award Identification Number and Year: 7773322/GR205913 Award Period: 08/15/2018- 08/14/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see §§200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for pass-through entities, paragraph (a)(1)(iv)). CAL should have internal controls designed to ensure compliance with these provisions. Condition: We noted CAL recorded expenses to an award after the contract’s period of performance ended in August 2023. The expenses were for an event that occurred in November of 2023. CAL did not identify and properly record the timing difference. Questioned costs: None Context: One of the three invoices we examined were not properly reflected within the financial statements and improperly allocated to an award outside of the period of performance. Management did provide an adjustment to the financial statements and Schedule of Expenditures of Federal Awards. Cause: The policies and procedures surrounding review of invoices and the dates costs were incurred were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of period of performance; however, the lack of effective internal controls over compliance requirements provides an opportunity for noncompliance. Repeat Finding: N/A Recommendation: We recommend CAL ensure consistent application review of the dates invoice were incurred and the proper reflection within the financial statements and allocation to awards. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding. As of January 2, 2024 CAL, hired a staff account (Melanie Richards) to ensure all expenses are recorded in compliance with performance periods. The Associate Director of Finance will review all postings monthly and consult with the Vice President of Finance on any corrections or recommendations.
Finding Number: 2023-015 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: 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 – 09/20/2023 Department of Energy and Environment (DOEE); Office of Neighborhood Safety and Engagement (ONSE); Various Other District Agencies 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 requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. 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 examination of the program’s subrecipient monitoring requirements includes submission and review of monthly financial and performance reports. We noted for one (1) out of 41 samples, the subrecipient failed to submit their monthly financial and performance reports. • For one (1) out of 41 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. In addition, grant expenditures totaling approximately $1.9 million were erroneously excluded as subrecipient expenditures on the Schedule of Federal Awards under assistance listing number 21.027, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. The District subsequently adjusted the SEFA to reflect the correct amount of subrecipient expenditures incurred for the program. Questioned Costs – Not determinable. Context – This is a condition identified per review of the 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. Also, the District is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. In addition, the District did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation – We recommend that the agencies maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients, and to adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DOEE, ONSE and various other District agencies agree with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2023-036 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Department of Behavioral Health (DBH) 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. Eligibility of Subrecipients: The Substance Abuse and Mental Health Services Administration (SAMHSA) promulgated the Funding Opportunity Announcement (FOA) No. TI-20-012 to seek applicants for the Opioid STR federal program. Page 67 of the FOA states “Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal award, including a portion of the scope of work or objectives. Grant recipients are responsible for ensuring that all subrecipients comply with the terms and conditions of the award, per 45 CFR Section 75.101.” This provision indicates that 45 CFR Section 75.202 applies to all grant agreements, including subawards. 45 CFR Section 75.202(b) requires the federal awarding agency must provide certain information about the federal award and states, in part (5), General Eligibility Requirements, The statutory, regulatory or other eligibility factors or considerations that determine the applicant’s qualification for Federal awards under the program (e.g., type of non-Federal entity). Earmarking Requirements for Subrecipients: Award recipients must continue to comply with the requirements for subrecipients monitoring and management as outlined in the provisions of 45 CFR Section 75.351-352 and should ensure written subaward/subcontract agreements are in place. The written agreement must require that subrecipients comply with the same terms and conditions as the prime recipient, as applicable (i.e., financial management requirements, audit requirements, etc.) and should describe the scope of work, deliverables, etc. The grant agreements provide that the District may use no more than ten (10) percent of the total grant award for administrative costs and developing the infrastructure necessary for expansion of services. Also, no more than ten (10) percent of the total grant award may be used for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Monitoring of Subrecipients: Uniform Guidance in 2 CFR Section 200.331(a) 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. Also, in accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. Condition – During our testing of Subrecipient Monitoring compliance requirement, we noted the following: For Eligibility of Subrecipients: We identified ten (10) instances out of ten (10) tested, in which the subrecipients’ eligibility determination was not documented or maintained. Earmarking Requirements for Subrecipients: During our testing of the State Targeted Response to the Opioid Crisis Program, we noted that the agency used a different established indirect cost rate in monitoring the earmarking of awardees than the maximum administrative costs/indirect costs. For three (3) out of ten (10) samples selected for testing, the awardees exceeded the ten (10) percent funding limitation for administrative costs/indirect costs. Also, DBH does not have a process to monitor the ten (10) percent earmarking requirement for costs of developing the infrastructure necessary for expansion of services; and for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Monitoring of Subrecipients: Although, DBH performs risk assessment and site visits to monitor subrecipients, we noted three (3) instances out of ten (10) samples, in which the subrecipients’ site visit and/or risk assessment was not documented or maintained. In addition, DBH did not track subrecipient costs versus vendor costs within their financial reporting system, which resulted to issues in verifying the completeness and accuracy of subrecipient population. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified subrecipient monitoring requirements 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 DBH maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls into place to resolve the issues. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Specifically, the County had not verified that a subrecipient that was expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement (2 CFR section 200.331(f)). Cause/Effect: The County did not have adequate procedures in place for monitoring that a subrecipient had complied with federal regulations. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients. Views of Responsible Officials and Planned Corrective Actions: The County will review the monitoring plan related to the program and ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Specifically, the County had not verified that a subrecipient that was expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement (2 CFR section 200.331(f)). Cause/Effect: The County did not have adequate procedures in place for monitoring that a subrecipient had complied with federal regulations. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients. Views of Responsible Officials and Planned Corrective Actions: The County will review the monitoring plan related to the program and ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
2023-004 SUBRECIPIENT MONITORING U.S. Department of Environmental Protection ALN 66.456 – National Estuary Program Federal Award ID Number: 4T-02D39922 and CE-00D90119 2023 Funding 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 the requirement for the subaward contract to include information such as the federal award identification (Assistance Listing Number (ALN) and name of the federal program), 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: Subrecipient awards did not consistently include the required language including the ALN and the pass-through of Federal award requirements. Additionally, 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: In some cases, the Council used the contract template for a subaward for a state financial assistance program rather than for a Federal award and, as a result, required information and language was missing from the contract. Further, the Council did not update its procedures over subrecipient monitoring to include follow-up of any deficiencies pertaining to the subrecipients’ use of the Federal funding detected through audits, on-site reviews or other means. Effect: Without the required language in the subrecipient contracts, subrecipients may not have the information necessary for them to establish appropriate controls over compliance required by the Federal award and to appropriately identify the Federal award and related expenditures on their Schedule of Expenditures of Federal Awards, if applicable. Additionally, 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. Required language was not included in two of the eight subrecipient awards tested. For one of these two contracts, the contract was originally funded with local share and applied to the Federal award only after the grantor modified the award to allow the Council to apply pre-award expenditures to the grant program. Recommendation: The Council should review existing subrecipient agreements and amend any contracts that may be missing the required Uniform Guidance language. Management should ensure that future contracts use the template appropriate for the funding source (Federal, state or non-grant funded). To ensure compliance with the requirements for subrecipient monitoring, the Council should establish processes to (1) review and reports required by the subrecipient contract; (2) document the Council’s follow-up on action taken by the subrecipient on any deficiencies detected through audits, on-site reviews or other means; and (3) issue a management decision for audit findings pertaining to the Federal award provided to the subrecipient.
2023-004 SUBRECIPIENT MONITORING U.S. Department of Environmental Protection ALN 66.456 – National Estuary Program Federal Award ID Number: 4T-02D39922 and CE-00D90119 2023 Funding 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 the requirement for the subaward contract to include information such as the federal award identification (Assistance Listing Number (ALN) and name of the federal program), 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: Subrecipient awards did not consistently include the required language including the ALN and the pass-through of Federal award requirements. Additionally, 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: In some cases, the Council used the contract template for a subaward for a state financial assistance program rather than for a Federal award and, as a result, required information and language was missing from the contract. Further, the Council did not update its procedures over subrecipient monitoring to include follow-up of any deficiencies pertaining to the subrecipients’ use of the Federal funding detected through audits, on-site reviews or other means. Effect: Without the required language in the subrecipient contracts, subrecipients may not have the information necessary for them to establish appropriate controls over compliance required by the Federal award and to appropriately identify the Federal award and related expenditures on their Schedule of Expenditures of Federal Awards, if applicable. Additionally, 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. Required language was not included in two of the eight subrecipient awards tested. For one of these two contracts, the contract was originally funded with local share and applied to the Federal award only after the grantor modified the award to allow the Council to apply pre-award expenditures to the grant program. Recommendation: The Council should review existing subrecipient agreements and amend any contracts that may be missing the required Uniform Guidance language. Management should ensure that future contracts use the template appropriate for the funding source (Federal, state or non-grant funded). To ensure compliance with the requirements for subrecipient monitoring, the Council should establish processes to (1) review and reports required by the subrecipient contract; (2) document the Council’s follow-up on action taken by the subrecipient on any deficiencies detected through audits, on-site reviews or other means; and (3) issue a management decision for audit findings pertaining to the Federal award provided to the subrecipient.
Finding No.: 2023-018 Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must: 1. Clearly identify to the subrecipient the award as a subaward by providing the ALN (Assistance Listings Number) and name. 2. Include the total amount provided to subrecipients from each Federal program. 3. 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. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200, subpart F, met the audit requirements. Condition: For the year ended September 30, 2023, GovGuam reported $80.6 million in total program expenditures in the Schedule of Federal Awards (SEFA). A total of $28.3M represents amounts passed through to GovGuam line agencies and component units. Of this amount, approximately $847,464 represents payments for various programs administered by Guam Economic Development Authority (GEDA). Only $27.5 million was identified as amounts passed through to GovGuam line agencies and component units in the final SEFA, which did not include the amounts administered by GEDA. According to Executive Order No. 2021-22, dated September 7, 2021, “GEDA is appointed to serve as the Program processor for Guam, subject to continued monitoring and oversight by the Office of the Governor. The Administrator of GEDA shall serve as the official responsible for overseeing GEDA’s fulfillment of the Program, which includes the following items:…[(]i[)].. Implementing the Program, inclusive of drafting the application, standard operating procedures (SOP), and other relevant documentation. [(]ii.[)] Receiving and reviewing applications and submitting payment requests to the Department of Administration for disbursement to eligible small businesses.” Government of Guam Schedule of Findings and Questioned Costs, continued 58 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Condition, continued: Similar language is documented in other executive orders, describing GEDA as the administrator of various programs funded by ALN 21.027 and describing GEDA’s responsibility to make eligibility determinations. Therefore, GEDA meets the definition of a subrecipient, and amounts administered by GEDA should be reported in the SEFA as amounts passed through to subrecipients. Cause: GovGuam did not properly identify amounts passed through to subrecipients and did not enforce compliance with applicable subrecipient monitoring requirements. The Department of Administration believes that GEDA is not a subrecipient. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. No questioned cost is reported because GEDA underwent a Single Audit for FY 2023. Identification as a Repeat Finding: Finding 2022-023 Recommendation: GovGuam should enforce compliance with applicable subrecipient monitoring requirements. Also, GovGuam should consider seeking guidance and confirmation from the Grantor Agency regarding the classification of GEDA as either a subrecipient or a contractor. Views of Responsible Officials: The Government continues to disagree with the auditor. The language of CFR 200.331(c) is clear that it is the judgment of the pass-through entity that is important. The auditor does not explain the reasoning for reaching a different opinion. Many jurisdictions have engaged third-party administrators for programs without concluding that they become sub-recipients. Government of Guam Schedule of Findings and Questioned Costs, continued 59 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Auditor Response: The language of 2 CFR 200.331(c) is clear that “the pass-through entity must use judgement” and that “the substance of the relationship is more important than the form of the agreement.” The language of 2 CFR 200.331(a)(1) is also clear that a characteristic of a subrecipient is that the entity “Determines who is eligible to receive what Federal assistance.” The Condition sets forth our rationale.
Finding 2023-001: Subrecipient Monitoring and Reporting Federal Programs: Assistance Listing Number #19.522 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Also, as noted in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. Condition: A full and complete risk assessment for each potential subrecipient was not documented for two subrecipients in our sample. In addition, WRC did not register their subawards in FSRS. Cause: WRC did not document the risk assessment procedures it performed and did not apply the latest compliance supplement issued by the Office of Management and Budget regarding subaward reporting requirements in FSRS. Effect or Potential Effect: WRC could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Also, WRC failed to provide the required reporting on subrecipients within FSRS in compliance with the Uniform Guidance. Questioned Costs: None noted. Context: WRC did not document the risk assessments it performed on the two subrecipients in our sample and did not register subawards in excess of $30,000 with FSRS. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that WRC ensure that risk assessment procedures over its subrecipients are performed and documented prior to providing subawards. Based on these risk assessments, WRC should assign a risk level to each subrecipient and then determine the monitoring tools to apply based on these risk levels. We also recommend that WRC update its policies and procedures to ensure all first tier subawards in excess of $30,000 are accurately and timely registered in FSRS and WRC should ensure subawards are reported in FSRS within the required time-frame.
Federal Agency: U.S. Department of Education Federal Program Name: Assessment and Evaluation Language Resource Center Assistance Listing Number: 84.229A Federal Award Identification Number and Year: 7773322/GR205913 Award Period: 08/15/2018- 08/14/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see §§200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for pass-through entities, paragraph (a)(1)(iv)). CAL should have internal controls designed to ensure compliance with these provisions. Condition: We noted CAL recorded expenses to an award after the contract’s period of performance ended in August 2023. The expenses were for an event that occurred in November of 2023. CAL did not identify and properly record the timing difference. Questioned costs: None Context: One of the three invoices we examined were not properly reflected within the financial statements and improperly allocated to an award outside of the period of performance. Management did provide an adjustment to the financial statements and Schedule of Expenditures of Federal Awards. Cause: The policies and procedures surrounding review of invoices and the dates costs were incurred were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of period of performance; however, the lack of effective internal controls over compliance requirements provides an opportunity for noncompliance. Repeat Finding: N/A Recommendation: We recommend CAL ensure consistent application review of the dates invoice were incurred and the proper reflection within the financial statements and allocation to awards. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding. As of January 2, 2024 CAL, hired a staff account (Melanie Richards) to ensure all expenses are recorded in compliance with performance periods. The Associate Director of Finance will review all postings monthly and consult with the Vice President of Finance on any corrections or recommendations.
Federal Agency: U.S. Department of Education Federal Program Name: Assessment and Evaluation Language Resource Center Assistance Listing Number: 84.229A Federal Award Identification Number and Year: 7773322/GR205913 Award Period: 08/15/2018- 08/14/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see §§200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for pass-through entities, paragraph (a)(1)(iv)). CAL should have internal controls designed to ensure compliance with these provisions. Condition: We noted CAL recorded expenses to an award after the contract’s period of performance ended in August 2023. The expenses were for an event that occurred in November of 2023. CAL did not identify and properly record the timing difference. Questioned costs: None Context: One of the three invoices we examined were not properly reflected within the financial statements and improperly allocated to an award outside of the period of performance. Management did provide an adjustment to the financial statements and Schedule of Expenditures of Federal Awards. Cause: The policies and procedures surrounding review of invoices and the dates costs were incurred were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of period of performance; however, the lack of effective internal controls over compliance requirements provides an opportunity for noncompliance. Repeat Finding: N/A Recommendation: We recommend CAL ensure consistent application review of the dates invoice were incurred and the proper reflection within the financial statements and allocation to awards. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding. As of January 2, 2024 CAL, hired a staff account (Melanie Richards) to ensure all expenses are recorded in compliance with performance periods. The Associate Director of Finance will review all postings monthly and consult with the Vice President of Finance on any corrections or recommendations.
Finding Number: 2023-015 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: 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 – 09/20/2023 Department of Energy and Environment (DOEE); Office of Neighborhood Safety and Engagement (ONSE); Various Other District Agencies 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 requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. 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 examination of the program’s subrecipient monitoring requirements includes submission and review of monthly financial and performance reports. We noted for one (1) out of 41 samples, the subrecipient failed to submit their monthly financial and performance reports. • For one (1) out of 41 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. In addition, grant expenditures totaling approximately $1.9 million were erroneously excluded as subrecipient expenditures on the Schedule of Federal Awards under assistance listing number 21.027, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. The District subsequently adjusted the SEFA to reflect the correct amount of subrecipient expenditures incurred for the program. Questioned Costs – Not determinable. Context – This is a condition identified per review of the 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. Also, the District is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. In addition, the District did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation – We recommend that the agencies maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients, and to adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DOEE, ONSE and various other District agencies agree with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2023-036 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Department of Behavioral Health (DBH) 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. Eligibility of Subrecipients: The Substance Abuse and Mental Health Services Administration (SAMHSA) promulgated the Funding Opportunity Announcement (FOA) No. TI-20-012 to seek applicants for the Opioid STR federal program. Page 67 of the FOA states “Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal award, including a portion of the scope of work or objectives. Grant recipients are responsible for ensuring that all subrecipients comply with the terms and conditions of the award, per 45 CFR Section 75.101.” This provision indicates that 45 CFR Section 75.202 applies to all grant agreements, including subawards. 45 CFR Section 75.202(b) requires the federal awarding agency must provide certain information about the federal award and states, in part (5), General Eligibility Requirements, The statutory, regulatory or other eligibility factors or considerations that determine the applicant’s qualification for Federal awards under the program (e.g., type of non-Federal entity). Earmarking Requirements for Subrecipients: Award recipients must continue to comply with the requirements for subrecipients monitoring and management as outlined in the provisions of 45 CFR Section 75.351-352 and should ensure written subaward/subcontract agreements are in place. The written agreement must require that subrecipients comply with the same terms and conditions as the prime recipient, as applicable (i.e., financial management requirements, audit requirements, etc.) and should describe the scope of work, deliverables, etc. The grant agreements provide that the District may use no more than ten (10) percent of the total grant award for administrative costs and developing the infrastructure necessary for expansion of services. Also, no more than ten (10) percent of the total grant award may be used for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Monitoring of Subrecipients: Uniform Guidance in 2 CFR Section 200.331(a) 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. Also, in accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. Condition – During our testing of Subrecipient Monitoring compliance requirement, we noted the following: For Eligibility of Subrecipients: We identified ten (10) instances out of ten (10) tested, in which the subrecipients’ eligibility determination was not documented or maintained. Earmarking Requirements for Subrecipients: During our testing of the State Targeted Response to the Opioid Crisis Program, we noted that the agency used a different established indirect cost rate in monitoring the earmarking of awardees than the maximum administrative costs/indirect costs. For three (3) out of ten (10) samples selected for testing, the awardees exceeded the ten (10) percent funding limitation for administrative costs/indirect costs. Also, DBH does not have a process to monitor the ten (10) percent earmarking requirement for costs of developing the infrastructure necessary for expansion of services; and for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Monitoring of Subrecipients: Although, DBH performs risk assessment and site visits to monitor subrecipients, we noted three (3) instances out of ten (10) samples, in which the subrecipients’ site visit and/or risk assessment was not documented or maintained. In addition, DBH did not track subrecipient costs versus vendor costs within their financial reporting system, which resulted to issues in verifying the completeness and accuracy of subrecipient population. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified subrecipient monitoring requirements 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 DBH maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls into place to resolve the issues. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Specifically, the County had not verified that a subrecipient that was expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement (2 CFR section 200.331(f)). Cause/Effect: The County did not have adequate procedures in place for monitoring that a subrecipient had complied with federal regulations. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients. Views of Responsible Officials and Planned Corrective Actions: The County will review the monitoring plan related to the program and ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Specifically, the County had not verified that a subrecipient that was expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement (2 CFR section 200.331(f)). Cause/Effect: The County did not have adequate procedures in place for monitoring that a subrecipient had complied with federal regulations. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients. Views of Responsible Officials and Planned Corrective Actions: The County will review the monitoring plan related to the program and ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
2023-004 SUBRECIPIENT MONITORING U.S. Department of Environmental Protection ALN 66.456 – National Estuary Program Federal Award ID Number: 4T-02D39922 and CE-00D90119 2023 Funding 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 the requirement for the subaward contract to include information such as the federal award identification (Assistance Listing Number (ALN) and name of the federal program), 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: Subrecipient awards did not consistently include the required language including the ALN and the pass-through of Federal award requirements. Additionally, 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: In some cases, the Council used the contract template for a subaward for a state financial assistance program rather than for a Federal award and, as a result, required information and language was missing from the contract. Further, the Council did not update its procedures over subrecipient monitoring to include follow-up of any deficiencies pertaining to the subrecipients’ use of the Federal funding detected through audits, on-site reviews or other means. Effect: Without the required language in the subrecipient contracts, subrecipients may not have the information necessary for them to establish appropriate controls over compliance required by the Federal award and to appropriately identify the Federal award and related expenditures on their Schedule of Expenditures of Federal Awards, if applicable. Additionally, 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. Required language was not included in two of the eight subrecipient awards tested. For one of these two contracts, the contract was originally funded with local share and applied to the Federal award only after the grantor modified the award to allow the Council to apply pre-award expenditures to the grant program. Recommendation: The Council should review existing subrecipient agreements and amend any contracts that may be missing the required Uniform Guidance language. Management should ensure that future contracts use the template appropriate for the funding source (Federal, state or non-grant funded). To ensure compliance with the requirements for subrecipient monitoring, the Council should establish processes to (1) review and reports required by the subrecipient contract; (2) document the Council’s follow-up on action taken by the subrecipient on any deficiencies detected through audits, on-site reviews or other means; and (3) issue a management decision for audit findings pertaining to the Federal award provided to the subrecipient.
2023-004 SUBRECIPIENT MONITORING U.S. Department of Environmental Protection ALN 66.456 – National Estuary Program Federal Award ID Number: 4T-02D39922 and CE-00D90119 2023 Funding 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 the requirement for the subaward contract to include information such as the federal award identification (Assistance Listing Number (ALN) and name of the federal program), 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: Subrecipient awards did not consistently include the required language including the ALN and the pass-through of Federal award requirements. Additionally, 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: In some cases, the Council used the contract template for a subaward for a state financial assistance program rather than for a Federal award and, as a result, required information and language was missing from the contract. Further, the Council did not update its procedures over subrecipient monitoring to include follow-up of any deficiencies pertaining to the subrecipients’ use of the Federal funding detected through audits, on-site reviews or other means. Effect: Without the required language in the subrecipient contracts, subrecipients may not have the information necessary for them to establish appropriate controls over compliance required by the Federal award and to appropriately identify the Federal award and related expenditures on their Schedule of Expenditures of Federal Awards, if applicable. Additionally, 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. Required language was not included in two of the eight subrecipient awards tested. For one of these two contracts, the contract was originally funded with local share and applied to the Federal award only after the grantor modified the award to allow the Council to apply pre-award expenditures to the grant program. Recommendation: The Council should review existing subrecipient agreements and amend any contracts that may be missing the required Uniform Guidance language. Management should ensure that future contracts use the template appropriate for the funding source (Federal, state or non-grant funded). To ensure compliance with the requirements for subrecipient monitoring, the Council should establish processes to (1) review and reports required by the subrecipient contract; (2) document the Council’s follow-up on action taken by the subrecipient on any deficiencies detected through audits, on-site reviews or other means; and (3) issue a management decision for audit findings pertaining to the Federal award provided to the subrecipient.
Finding No.: 2023-018 Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Criteria: In accordance with applicable subrecipient monitoring requirements, a pass-through entity must: 1. Clearly identify to the subrecipient the award as a subaward by providing the ALN (Assistance Listings Number) and name. 2. Include the total amount provided to subrecipients from each Federal program. 3. 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. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200, subpart F, met the audit requirements. Condition: For the year ended September 30, 2023, GovGuam reported $80.6 million in total program expenditures in the Schedule of Federal Awards (SEFA). A total of $28.3M represents amounts passed through to GovGuam line agencies and component units. Of this amount, approximately $847,464 represents payments for various programs administered by Guam Economic Development Authority (GEDA). Only $27.5 million was identified as amounts passed through to GovGuam line agencies and component units in the final SEFA, which did not include the amounts administered by GEDA. According to Executive Order No. 2021-22, dated September 7, 2021, “GEDA is appointed to serve as the Program processor for Guam, subject to continued monitoring and oversight by the Office of the Governor. The Administrator of GEDA shall serve as the official responsible for overseeing GEDA’s fulfillment of the Program, which includes the following items:…[(]i[)].. Implementing the Program, inclusive of drafting the application, standard operating procedures (SOP), and other relevant documentation. [(]ii.[)] Receiving and reviewing applications and submitting payment requests to the Department of Administration for disbursement to eligible small businesses.” Government of Guam Schedule of Findings and Questioned Costs, continued 58 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Condition, continued: Similar language is documented in other executive orders, describing GEDA as the administrator of various programs funded by ALN 21.027 and describing GEDA’s responsibility to make eligibility determinations. Therefore, GEDA meets the definition of a subrecipient, and amounts administered by GEDA should be reported in the SEFA as amounts passed through to subrecipients. Cause: GovGuam did not properly identify amounts passed through to subrecipients and did not enforce compliance with applicable subrecipient monitoring requirements. The Department of Administration believes that GEDA is not a subrecipient. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. No questioned cost is reported because GEDA underwent a Single Audit for FY 2023. Identification as a Repeat Finding: Finding 2022-023 Recommendation: GovGuam should enforce compliance with applicable subrecipient monitoring requirements. Also, GovGuam should consider seeking guidance and confirmation from the Grantor Agency regarding the classification of GEDA as either a subrecipient or a contractor. Views of Responsible Officials: The Government continues to disagree with the auditor. The language of CFR 200.331(c) is clear that it is the judgment of the pass-through entity that is important. The auditor does not explain the reasoning for reaching a different opinion. Many jurisdictions have engaged third-party administrators for programs without concluding that they become sub-recipients. Government of Guam Schedule of Findings and Questioned Costs, continued 59 Finding No.: 2023-018, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Auditor Response: The language of 2 CFR 200.331(c) is clear that “the pass-through entity must use judgement” and that “the substance of the relationship is more important than the form of the agreement.” The language of 2 CFR 200.331(a)(1) is also clear that a characteristic of a subrecipient is that the entity “Determines who is eligible to receive what Federal assistance.” The Condition sets forth our rationale.
Subrecipient Monitoring Federal Agency: U.S. Department of the Treasury Federal Program Title: Emergency Rental Assistance Program ALN: 21.023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0266 – 2021, 1505-0270 – 2021. January 6, 2022 – December 29, 2022 and May 5, 2021 – September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non_x0002_Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR sections 200.332 (d) through (f), all pass-through entities 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. Condition: TDHCA maintains a Master Planning Summary (MPS) to track all active subrecipient contracts that have expenditures in the planning phase, which are to be considered for sampling and potential selection for review. During our testing, we noted one subrecipient contract with expenditures during the fiscal year that was not included in the MPS for potential selection for a review. Questioned costs: None. Context: See “Condition.” Cause: Management is not adhering to the subrecipient monitoring procedures to ensure all active subrecipient contracts with expenditures incurred during the fiscal year are at least considered for review by being included in the MPS. Effect: Failure to complete proper monitoring over subrecipients may lead to noncompliance with grant terms and conditions. Repeat finding: No Recommendation: We recommend that TDHCA strengthen its internal controls to ensure that all subrecipients are included in the MPS and subject to review. Views of responsible officials: The Department’s Compliance Subrecipient Monitoring (CMSM) staff acknowledges that a subrecipient was erroneously not included in the Master Planning Summary. However, the Department’s procedures for risk assessment and monitoring activities for this review period remain compliant with 2 CFR section 200.303(a) as well as 2 CFR section 200.331(6)(b). Risk assessment for non-formula funded contracts is 100% risk based. Both risk assessment and subsequent monitoring functions represent a snapshot of the Department’s pass-through activities and 100% review is not required. It is the Department’s stance that this error does not materially impact the risk assessment process or the scope of this audit.
Subrecipient Monitoring Federal Agency: U.S. Department of the Treasury Federal Program Title: Emergency Rental Assistance Program ALN: 21.023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0266 – 2021, 1505-0270 – 2021. January 6, 2022 – December 29, 2022 and May 5, 2021 – September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non_x0002_Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR sections 200.332 (d) through (f), all pass-through entities 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. Condition: TDHCA maintains a Master Planning Summary (MPS) to track all active subrecipient contracts that have expenditures in the planning phase, which are to be considered for sampling and potential selection for review. During our testing, we noted one subrecipient contract with expenditures during the fiscal year that was not included in the MPS for potential selection for a review. Questioned costs: None. Context: See “Condition.” Cause: Management is not adhering to the subrecipient monitoring procedures to ensure all active subrecipient contracts with expenditures incurred during the fiscal year are at least considered for review by being included in the MPS. Effect: Failure to complete proper monitoring over subrecipients may lead to noncompliance with grant terms and conditions. Repeat finding: No Recommendation: We recommend that TDHCA strengthen its internal controls to ensure that all subrecipients are included in the MPS and subject to review. Views of responsible officials: The Department’s Compliance Subrecipient Monitoring (CMSM) staff acknowledges that a subrecipient was erroneously not included in the Master Planning Summary. However, the Department’s procedures for risk assessment and monitoring activities for this review period remain compliant with 2 CFR section 200.303(a) as well as 2 CFR section 200.331(6)(b). Risk assessment for non-formula funded contracts is 100% risk based. Both risk assessment and subsequent monitoring functions represent a snapshot of the Department’s pass-through activities and 100% review is not required. It is the Department’s stance that this error does not materially impact the risk assessment process or the scope of this audit.
2023 – 003 (Previously 2022-002) Subrecipient Monitoring Federal Agency: US Department of Health and Human Services Federal Program Name: Maternal, Infant, Early Childhood Home Visiting Assistance Listing Number: 93.870 Federal Award Identification Number and Year: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Award Period: X10MC43597 - 9/1/2021-9/29/23 X10MC39703 - 9/30/2020-9/29/2022 X11MC41939 -05/01/21-09/30/23 6X11MC45479-01-02 - 12/31/21-9/30/24 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: The PTE must make the subrecipient aware of the award information required by 2 CFR section 200.331(a) sufficient for the PTE to comply with Federal statutes, regulations, and the terms and conditions of the award Condition: While the program has improved in its subrecipient monitoring efforts, the subaward agreements lack all required elements of a subaward. There were agreements included with all. Questioned costs: None Context: We tested 5 subrecipients; 4 agreements were incomplete Cause: Lack of knowledge of all required elements. Agreements contained some of the elements, but not all. Effect: Noncompliance with requirements of a subaward. Repeat Finding: Yes Recommendation: We recommend the program create an agreement template that contains the required elements of a subaward to distribute to its subreceipients Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-001: Sub-recipients Information on the Federal Programs: Assistance Listing Number 20.521 Criteria or Specific Requirement: As noted in 2 CFR 200.331 part (d): Monitor the activities of the sub-recipient as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions for the sub-award; and that sub-award performance goals are achieved. Condition: During the audit, we noted that JCA does not have policies and procedures in place for monitoring sub-recipients. Cause: JCA does not have policies and procedures in place to be in compliance with monitoring activities of their sub-recipients. Our audit procedures consisted of substantive testwork over a sample of sub-recipient expenditures that were selected based on a threshold. We consider our sample to representative of the population. Effect or Potential Effect: JCA could inadvertently engage in relationships with sub-recipients of higher risk without the appropriate level of oversight (monitoring) to ensure sub-recipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None Context: JCA failed to adequately perform risk assessment procedures, or document its due diligence with monitoring sub-recipients over each of its sub-recipients. Identification as a Repeat Finding, if Applicable: 2022-002 Recommendation: Accordingly, we concluded that certain enhancements would add value to JCA's due diligence with respect to its monitoring processes, and the following are our recommendations (of activities/documents that should be performed/maintained by JCA: -Create pre-award risk assessment; an evaluation of the financial (and programmatic) risk associated with the intended recipient/grantee for the purpose of determining the expected level of oversight during the period of performance. - Clearly define in the policies and procedures the difference between a sub-recipient versus a sub-contractor. - Evidence of an evaluation process with respect to the identification of the prospective recipient. - A regularly documented review process with respect to periodic financial reports received from grantees. - An evaluation of the need for a periodic site visit. - Receipt of the grantee's annual audit reports, if available (to ensure there are no weaknesses or deficiencies in internal control during the grant period). If there are deficiencies that directly the program, then a corrective action plan be established. - JCA will need to evaluate the FFATA (Federal Funding Accountability and Transparency Act) reporting requirements and comply with the act.