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 Number: 2023-039 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of the Interior Government Department/Agency: Department of Planning and Natural Resources (DPNR) Economic, Social, and Political Development of the Territories ALN: 15.875 Award #: Various Award Period: Various Criteria – A pass-through entity (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)); 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)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, 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). 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. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We selected 2 of 4 subrecipients and found the following: - No supporting documentation of monitoring the subawards and evaluating the risk of noncompliance for each subrecipient. - No evidence that pass-through entity verified that subrecipients expected to be audited as required by 2 CFR part 200, subpart F. - No supporting documentation if the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient. Additionally, there was no evidence of review of performance and special reports, as no supporting documentation was available for review by the pass-through entity for 1 of the 2 subrecipients tested. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements. Questioned Costs – None. Context – This is a condition identified per review of DPNR’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2023 were $341,920. The total amount of our sample totaled $131,920. Effect – Failure to properly adhere to policies and procedures can result in noncompliance with laws and regulations and failure to meet the program's objectives. Cause – DPNR does not have policies and procedures in place to ensure personnel adhere to the internal procedures to properly monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that DPNR implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. The GVI is currently in the process of developing a comprehensive Grants Management Overarching Standard Operating Policies and Procedures (SOPP) to establish uniform guidance for all grant-related processes, including drawdowns, documentation retention, subrecipient and compliance monitoring. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2023-048 Prior Year Finding Number: 2022-045 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Treasury Government Department/Agency: Office of Management and Budget (OMB) COVID-19 – Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Period: 03/03/2021 – 12/31/2024 Criteria – A pass-through entity (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)); 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)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, 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). 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. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We selected 10 of 21 subrecipients and found no evidence the subrecipient monitoring workbook was reviewed by the American Rescue Plan Act (ARPA) Grants Administrator. Questioned Costs – None. Context – This is a condition identified per review of OMB’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2023 were $104,779,873. The total amount of our sample totaled $89,247,731. Effect – Failure to properly adhere to policies and procedures can result in noncompliance with laws and regulations and failure to meet the program’s objectives. Cause – OMB does not have policies and procedures in place to ensure personnel adhere to the internal procedures to properly monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that OMB implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. Starting FY25, OMB will identify and monitor federal awarding agencies, requesting single audit results for applicable recipients and including them in monitoring reviews. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2023-058 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Education Government Department/Agency: Department of Education (VIDE) Office of Management and Budget (OMB) COVID-19 - Education Stabilization Fund Governors (Outlying Areas) (ESF-Governor) ALN: 84.425H Award #: S425H200003, S425H210003 Award Period: 06/29/2020 - 09/30/2022 01/13/2021 - 09/30/2023 Criteria A pass-through entity (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)); 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)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, 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). 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. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that nonfederal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We selected 10 out of 27 subrecipients and noted that, all 10 samples where VIDE and OMB failed to provide the evidence of monitoring and reviewing sub-grantee to ensure effective management of sub-awards. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements or proper identification of subrecipients. Questioned Costs – None. Context – This is a condition identified per review of VIDE and OMB’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2023 was $4,220,685. The total amount of our sample totaled $3,051,101. Effect – VIDE and OMB are not in compliance with the stated provisions. Failure to properly identify and monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the program's objectives. Cause – VIDE and OMB do not have internal controls in place to properly identify and monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that VIDE and OMB implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. During the period under review, gaps in documentation and monitoring were impacted by staff turnover, leadership transitions, and programmatic shifts, which limited the consistency and precision of subrecipient oversight across programs. In response, Office of Federal Grants (OFG) has taken steps to reinforce its role as the pass-through entity and to formalize monitoring expectations and processes. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2023-086 Prior Year Finding Number: 2022-082 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Homeland Security Government Department/Agency: Virgin Islands Territorial Emergency Management Agency (VITEMA) Disaster Grants - Public Assistance (Presidentially Declared Disasters) ALN: 97.036 Award#: FEMA-4335-DR, FEMA-4340-DR-VI, FEMA-4513-DR Award Periods: 09/20/2017 – 09/07/2026 09/07/2017 – 09/16/2025 04/02/2020 – 05/11/2023 Criteria – A pass-through entity (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)); 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)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, 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). 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. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We selected 8 of 27 subrecipients and found the following: - 4 instances where we were unable to obtain subrecipient agreements. - 8 instances with no supporting documentation that VITEMA verified that subrecipients expected to be audited as required by 2 CFR part 200, subpart F. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements or proper identification of subrecipients. Questioned Costs – None. Context – This is a condition identified per review of VITEMA’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2023 was $134,242,935. The total amount of our sample totaled $124,398,401. Effect – VITEMA is not in compliance with the stated provisions. Failure to properly identify and monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the program's objectives. Cause – VITEMA does not have internal controls in place to properly identify and monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that VITEMA implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. The formal process for completing and retaining Subrecipient Agreements is now operational to ensure compliance with programmatic obligations. As the Recipient, the Territory is responsible for notifying the Subrecipient when federal funds are obligated and providing them with a subrecipient agreement outlining the program's terms and conditions. The Disaster Program Financial Specialist is responsible for ensuring that the subrecipient agreement is signed by both the Applicant and the Governor's Authorized Representative and provided to the Territorial Public Assistance Officer. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
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.
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.
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.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Emergency Rental Assistance Program Assistance Listing Number: 21.027 and 21.023 Federal Award Identification Numberand Year: ALN 21.027 -Pub. L. No. 117-2 2021 ALN 21.023 -ERA0335 2021 Award Period: ALN 21.027 - 5/10/2021 - 12/31/2026 ALN 21.023 - 1/20/2021 - 9/30/2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to§ 200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.331 Subrecipient and contractor determinations of 2 CFR Part 200, a pass-through entity 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. According to § 200.332 Requirements for pass-through entities of 2 CFR Part 200, 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. • 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. • Verify that every subrecipient is audited as required by Subpart F ohhis 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. • 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. According to the City's subrecipient monitoring policies and procedures, monitoring of subrecipients shall be conducted as often as may be required at the discretion of the Community Development Division or at least once per program year. An annual Risk Assessment will be completed to determine a ranking for the activity. The Risk Assessment ranking score will determine whether a monitoring review will occur. According to the City's Sub-recipient Agreement, the Sub-recipient will provide to the Department of Family and Community Services cumulative quarterly program performance reports covering the Services provided under this Agreement. Reports are due no later than fifteen (15) days after the end of the reporting quarter, and shall be in accordance with City of Albuquerque reporting instructions. Condition: During our testing, it was noted that the City did not follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Management's Progress for Repeat Findings: This is a repeated and modified.finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, we noted the following exceptions related to subrecipient monitoring. ALN 21.027 • For one of the five subrecipients, the City did not utilize the risk assessment tool specific to ARPA which does have a different risk assessment ranking score determining the monitoring of the subrecipient. The City did, however, perform a monitoring visit for the subrecipient. • For one of the five subrecipients, the City was unable to locate the subrecipient/contract determination worksheet. • For one of the five subrecipients, the City was unable to locate the quarterly program performance reports submitted by the subrecipient. ALN 21.023 • For one of the five subrecipients, the most recent annual audit report for the year ended June 30, 2022 was not reviewed by the City nor included in the risk assessment. Cause: The City does not have sufficient internal controls to ensure appropriate risk assessment and subrecipient monitoring. Effect: The auditor noted instances of noncompliance. Recommendation: The City has developed standard City-wide subrecipient management and monitoring policies and procedures effective June 2023. We recommend the City design controls to ensure departments are abiding by the subrecipient management and monitoring policies and procedures including Individual departments that develop their own department specific and/or grant-specific subrecipient management policies and procedures. Management Response: The City agrees with the finding. The City's Grant Administrator will provide training to each City department which currently oversees subrecipients, ensuring that all department staff understand general and ARPA-specific subrecipient requirements. Additionally, the Grant Administrator will review City departments' subrecipient management checklists to ensure all required documentation is obtained from subrecipients and reviewed as required. This will be complete by June 30, 2024. Timeline and Responsible Position: June 2024 - Grants Administrator
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Emergency Rental Assistance Program Assistance Listing Number: 21.027 and 21.023 Federal Award Identification Numberand Year: ALN 21.027 -Pub. L. No. 117-2 2021 ALN 21.023 -ERA0335 2021 Award Period: ALN 21.027 - 5/10/2021 - 12/31/2026 ALN 21.023 - 1/20/2021 - 9/30/2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to§ 200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.331 Subrecipient and contractor determinations of 2 CFR Part 200, a pass-through entity 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. According to § 200.332 Requirements for pass-through entities of 2 CFR Part 200, 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. • 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. • Verify that every subrecipient is audited as required by Subpart F ohhis 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. • 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. According to the City's subrecipient monitoring policies and procedures, monitoring of subrecipients shall be conducted as often as may be required at the discretion of the Community Development Division or at least once per program year. An annual Risk Assessment will be completed to determine a ranking for the activity. The Risk Assessment ranking score will determine whether a monitoring review will occur. According to the City's Sub-recipient Agreement, the Sub-recipient will provide to the Department of Family and Community Services cumulative quarterly program performance reports covering the Services provided under this Agreement. Reports are due no later than fifteen (15) days after the end of the reporting quarter, and shall be in accordance with City of Albuquerque reporting instructions. Condition: During our testing, it was noted that the City did not follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Management's Progress for Repeat Findings: This is a repeated and modified.finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, we noted the following exceptions related to subrecipient monitoring. ALN 21.027 • For one of the five subrecipients, the City did not utilize the risk assessment tool specific to ARPA which does have a different risk assessment ranking score determining the monitoring of the subrecipient. The City did, however, perform a monitoring visit for the subrecipient. • For one of the five subrecipients, the City was unable to locate the subrecipient/contract determination worksheet. • For one of the five subrecipients, the City was unable to locate the quarterly program performance reports submitted by the subrecipient. ALN 21.023 • For one of the five subrecipients, the most recent annual audit report for the year ended June 30, 2022 was not reviewed by the City nor included in the risk assessment. Cause: The City does not have sufficient internal controls to ensure appropriate risk assessment and subrecipient monitoring. Effect: The auditor noted instances of noncompliance. Recommendation: The City has developed standard City-wide subrecipient management and monitoring policies and procedures effective June 2023. We recommend the City design controls to ensure departments are abiding by the subrecipient management and monitoring policies and procedures including Individual departments that develop their own department specific and/or grant-specific subrecipient management policies and procedures. Management Response: The City agrees with the finding. The City's Grant Administrator will provide training to each City department which currently oversees subrecipients, ensuring that all department staff understand general and ARPA-specific subrecipient requirements. Additionally, the Grant Administrator will review City departments' subrecipient management checklists to ensure all required documentation is obtained from subrecipients and reviewed as required. This will be complete by June 30, 2024. Timeline and Responsible Position: June 2024 - Grants Administrator
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
2023-006 – Subrecipient Monitoring Federal Program: Refugee and Entrant Assistance Program Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.566 Repeat of Prior Finding: No Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance Criteria According to 2 CFR § 200.331, a pass-through entity 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. If determined to be a subrecipient, the entity must adhere to the provisions in 2 CFR § 200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR § 200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR § 200 including Subpart F, if applicable. Condition and Context The Organization did not have written policies and procedures in place to ensure that subrecipients are monitored and managed in accordance with Uniform Guidance 2 CFR § 200.332. The Organization did not have procedures in place to properly identify the party receiving funds from the Organization as a subrecipient and therefore assumed that the recipient was a subcontractor. As the proper determination was not made, there were no written agreements between the Organization and the subrecipients. Cause The Organization was unaware of these requirements and determined the receiver of the funds to be a subcontractor. Accordingly, there was no monitoring performed by the Organization over the subrecipient. Effect or Potential Effect Without a proper written grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements. The Organization could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Questioned Costs None noted. Recommendations We recommend that the Organization establish a written policy to monitor subrecipients and develop procedures for determining if the party receiving the funds is considered to be a subrecipient or a contractor. Further, we recommend maintaining a template to be in compliance with applicable regulations, ensuring that the subrecipient is aware of their responsibilities to adhere to federal regulations. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendations. See the attached corrective action plan
Program: AL 21.026 – COVID-19 Homeowner Assistance Fund – Subrecipient Monitoring Grant Number & Year: N/A Federal Grantor Agency: U.S. Department of the Treasury Criteria: Per 2 CFR § 1000.10 (January 1, 2023) the U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements set forth at 2 CFR part 200. 2 CFR § 200.331 (January 1, 2023) states the following, in relevant part: The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a pass-through entity 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. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. (a) 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 of 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. (b) Contractors. A contract is for the purpose of obtaining goods and services for the non-Federal entity’s own use and creates a procurement relationship with the contractor. See the definition of contract in § 200.1 of this part. Characteristics indicative of a procurement relationship between the non-Federal entity and a contractor are when the contractor: (1) Provides the goods and services within normal business operations; (2) Provides similar goods or services to many different purchasers; (3) Normally operates in a competitive environment; (4) Provides goods or services that are ancillary to the operation of the Federal program; and (5) Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons. (c) Use of judgment in making determination. In determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed above may not be present in all cases, and the pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract. 2 CFR § 200.511(b) (January 1, 2023) states, as is relevant, the following: The summary schedule of prior audit findings must report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. . . . (2) When audit findings were not corrected or were only partially corrected, the summary schedule must describe the reasons for the finding's recurrence and planned corrective action, and any partial corrective action taken. When corrective action taken is significantly different from corrective action previously reported in a corrective action plan or in the Federal agency's or pass-through entity's management decision, the summary schedule must provide an explanation. (3) When the auditee believes the audit findings are no longer valid or do not warrant further action, the reasons for this position must be described in the summary schedule. Condition: The Agency did not properly consider the Nebraska Investment Finance Authority (NIFA) to be a subrecipient. Additionally, the Agency did not properly complete the Summary Schedule of Prior Audit Findings. Repeat Finding: 2022-055 Questioned Costs: None Statistical Sample: No Context: In the previous fiscal year, the Agency considered NIFA to be a subrecipient and reported $451,581 in subrecipient expenditures on the Schedule of Expenditures of Federal Awards (SEFA). During the fiscal year ended June 30, 2023, the Agency paid NIFA $92,255 for ongoing Homeowner Assistance Fund (HAF) program administration. These payments were not reported as subrecipient expenditures because the Agency changed its determination and now considers NIFA to be a contractor rather than a subrecipient of the program. The APA disagrees with the Agency’s position that NIFA should be considered a contractor, as NIFA determines, to a substantial degree, the eligibility of applicants and, through that determination, informs State Accounting of which assistance payments are to be made and to whom. Additionally, NIFA is required to adhere to applicable Federal program requirements in the Federal award, and NIFA is administering the HAF program for a public purpose, not for the benefit of the Agency. Further, the position that NIFA is a contractor, rather than a subrecipient, of the HAF program does not reflect the Agency’s position in the Summary Schedule of Prior Audit Findings. The Schedule notes the following partial action taken: The Military Department will use subrecipient policies and procedures it has in place to continue to monitor the performance of NIFA and ensure that Federal guidelines are followed, and requirements are met. The Schedule also noted the following corrective action planned: The Military Department will modify the memorandum of Understanding between the parties to identify NIFA as a subrecipient and advise them of any additional requirements. The Agency’s position that NIFA is not a subrecipient of the HAF program was not properly communicated in the Summary Schedule of Prior Audit Findings as required by 2 CFR § 200.511(b)(2). Cause: Agency oversight. Effect: Noncompliance with Federal guidelines. Recommendation: We recommend the Agency implement procedures to review Federal guidelines to ensure subrecipients are properly identified, and that the Summary Schedule of Prior Audit Findings is completed properly. Management Response: Due to the Agency’s turnover recently, the response to this audit finding was in error. We agree with the finding and consider NIFA to be a Sub-Recipient.
Criteria or specific requirement: 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) 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 or UEI 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 research and development (R&D) and indirect cost rate for federal award. Condition: During our testing, we noted subrecipients had required information omitted from the sub agreements to the subrecipients including Assistance Listing Number (ALN) and title, subrecipient’s DUNS/UEI number, Federal Award Identification Number (FAIN), identification of whether the award is R&D, and indirect cost rate for federal award. Questioned costs: None. Context: Seventeen out of the seventeen subrecipients (100 percent) (with awards totaling $796,482) did not include required information in sub agreements issued to subrecipients. Cause: Lack of sufficient controls in place to ensure that subaward agreements contain all required information. Effect: Failure to communicate required information could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: Yes, finding 2022 -012 Recommendation: We recommend that the agency 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. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 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) 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 or UEI 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 research and development (R&D) and indirect cost rate for federal award. Condition: During our testing, we noted subrecipients had required information omitted from the sub agreements to the subrecipients including Assistance Listing Number (ALN) and title, subrecipient’s DUNS/UEI number, Federal Award Identification Number (FAIN), identification of whether the award is R&D, and indirect cost rate for federal award. Questioned costs: None. Context: Seventeen out of the seventeen subrecipients (100 percent) (with awards totaling $796,482) did not include required information in sub agreements issued to subrecipients. Cause: Lack of sufficient controls in place to ensure that subaward agreements contain all required information. Effect: Failure to communicate required information could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: Yes, finding 2022 -012 Recommendation: We recommend that the agency 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. 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/UEI 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 Number (ALN) and name, identification of whether the award is R&D and indirect cost rate for federal award. 2 CFR 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 statutes, regulations, and the terms and conditions of the Federal award. Condition: Subaward agreements with subrecipients, including Assistance Listing Number (ALN) and title, subrecipient’s DUNS/UEI number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award, were not included. Questioned costs: None. Context: Sixty out of the sixty subrecipients (100 percent) tested did not have required information in the applicable subawards. Cause: Lack of sufficient internal controls to ensure subawards include required information. Effect: Failure to communicate required information could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: Yes, Finding 2022 - 009 Recommendation: We recommend that the agency 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. Views of responsible officials: There is no disagreement with the audit finding.
COVID-19 Healthy and Equitable Communities-Enhancing Local Capacity-Alaska Initiative to Address COVID-19 Among High Risk, Rural, and Underserved Alaskans---Assistance Listing No. 93.391; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Healthy and Equitable Communities-Enhancing Local Capacity-Immunization Cooperative Agreements--- Assistance Listing No. 93.268; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Criteria and Condition: In accordance with the 2 CFR Part 200, Appendix XI OMB Compliance Supplement May 2023 section “Subrecipient Monitoring” and in accordance with 2 CFR section 200.331(a) says a pass-through entity (PTE) must (1) identify the award and applicable requirements clearly to their subrecipients. This includes clearly identifying the award as a subaward at the time of subaward by providing information described in 2 CFR section 200.331(a)(1). In accordance with the OMB Compliance Supplement May 2023 section “Other Audit Advisories” when COVID-19 funding is subawarded by a pass-through entity from an existing program, the information furnished to subrecipients should distinguish the subawards of incremental COVID-19 funding included in the subawards from non-COVID-19 funding. Without this clear identification, there is a high risk the nine subrecipients were not properly informed they received specific non-COVID-19 and COVID-19 federal funds. Cause: The Center served at the request of the Fairbanks North Star Borough as their designated agency to distribute the Health and Equitable funding from the State of Alaska. The Center did not receive the proper information, training, or guidance from the pass-through entity State of Alaska on how to be a compliant pass-through entity. In effect, the Center did not know to review the requirements from OMB Compliance Supplement May 2023 or 2 CFR section 200.331(a)(1) during the process and procedures of disbursing out awards to subrecipients. The Center used a template used by the State of Alaska. Potential Effect: We estimate taht three of the nine subrecipients potentially did not properly report the Assistance Listing Numbers and grant awards on their FY23 SEFA. This would quantify to approximately 40 percent of the pass-through funds. Questioned Costs: none noted Context: Auditor selected a random sample of six out of nine subrecipients which is approximately 66 percent of the total population. We believe this sample is representative of the population. We inspected the associated subrecipient agreements and inquired with management to validate if they were in compliance with properly identifying to the subrecipients in accordance with the OMB Compliance Supplement May 2023 and 2 CFR 200.331(a)(1). Recommendations: We recommend the Center ensure the required factors of 2 CFR 200.331(a) (1) and the OMB Compliance Supplement May 2023 are identified clearly to the subrecipients in their agreements. We recommend all Subrecipient Monitoring requirements out of the OMB Compliance Supplement are read and understood and implemented for any future subrecipient activity. We recommend reaching out to any subrecipients who have already received these funds to ensure they have properly stated SEFAs. View of Responsible Officials: Management agrees with the finding. Please see the Corrective Action Plan.
COVID-19 Healthy and Equitable Communities-Enhancing Local Capacity-Alaska Initiative to Address COVID-19 Among High Risk, Rural, and Underserved Alaskans---Assistance Listing No. 93.391; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Healthy and Equitable Communities-Enhancing Local Capacity-Immunization Cooperative Agreements--- Assistance Listing No. 93.268; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Criteria and Condition: In accordance with the 2 CFR Part 200, Appendix XI OMB Compliance Supplement May 2023 section “Subrecipient Monitoring” and in accordance with 2 CFR section 200.331(a) says a pass-through entity (PTE) must (1) identify the award and applicable requirements clearly to their subrecipients. This includes clearly identifying the award as a subaward at the time of subaward by providing information described in 2 CFR section 200.331(a)(1). In accordance with the OMB Compliance Supplement May 2023 section “Other Audit Advisories” when COVID-19 funding is subawarded by a pass-through entity from an existing program, the information furnished to subrecipients should distinguish the subawards of incremental COVID-19 funding included in the subawards from non-COVID-19 funding. Without this clear identification, there is a high risk the nine subrecipients were not properly informed they received specific non-COVID-19 and COVID-19 federal funds. Cause: The Center served at the request of the Fairbanks North Star Borough as their designated agency to distribute the Health and Equitable funding from the State of Alaska. The Center did not receive the proper information, training, or guidance from the pass-through entity State of Alaska on how to be a compliant pass-through entity. In effect, the Center did not know to review the requirements from OMB Compliance Supplement May 2023 or 2 CFR section 200.331(a)(1) during the process and procedures of disbursing out awards to subrecipients. The Center used a template used by the State of Alaska. Potential Effect: We estimate taht three of the nine subrecipients potentially did not properly report the Assistance Listing Numbers and grant awards on their FY23 SEFA. This would quantify to approximately 40 percent of the pass-through funds. Questioned Costs: none noted Context: Auditor selected a random sample of six out of nine subrecipients which is approximately 66 percent of the total population. We believe this sample is representative of the population. We inspected the associated subrecipient agreements and inquired with management to validate if they were in compliance with properly identifying to the subrecipients in accordance with the OMB Compliance Supplement May 2023 and 2 CFR 200.331(a)(1). Recommendations: We recommend the Center ensure the required factors of 2 CFR 200.331(a) (1) and the OMB Compliance Supplement May 2023 are identified clearly to the subrecipients in their agreements. We recommend all Subrecipient Monitoring requirements out of the OMB Compliance Supplement are read and understood and implemented for any future subrecipient activity. We recommend reaching out to any subrecipients who have already received these funds to ensure they have properly stated SEFAs. View of Responsible Officials: Management agrees with the finding. Please see the Corrective Action Plan.
COVID-19 Healthy and Equitable Communities-Enhancing Local Capacity-Alaska Initiative to Address COVID-19 Among High Risk, Rural, and Underserved Alaskans---Assistance Listing No. 93.391; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Healthy and Equitable Communities-Enhancing Local Capacity-Immunization Cooperative Agreements--- Assistance Listing No. 93.268; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Criteria and Condition: In accordance with the 2 CFR Part 200, Appendix XI OMB Compliance Supplement May 2023 section “Subrecipient Monitoring” and in accordance with 2 CFR section 200.331(a) says a pass-through entity (PTE) must (1) identify the award and applicable requirements clearly to their subrecipients. This includes clearly identifying the award as a subaward at the time of subaward by providing information described in 2 CFR section 200.331(a)(1). In accordance with the OMB Compliance Supplement May 2023 section “Other Audit Advisories” when COVID-19 funding is subawarded by a pass-through entity from an existing program, the information furnished to subrecipients should distinguish the subawards of incremental COVID-19 funding included in the subawards from non-COVID-19 funding. Without this clear identification, there is a high risk the nine subrecipients were not properly informed they received specific non-COVID-19 and COVID-19 federal funds. Cause: The Center served at the request of the Fairbanks North Star Borough as their designated agency to distribute the Health and Equitable funding from the State of Alaska. The Center did not receive the proper information, training, or guidance from the pass-through entity State of Alaska on how to be a compliant pass-through entity. In effect, the Center did not know to review the requirements from OMB Compliance Supplement May 2023 or 2 CFR section 200.331(a)(1) during the process and procedures of disbursing out awards to subrecipients. The Center used a template used by the State of Alaska. Potential Effect: We estimate taht three of the nine subrecipients potentially did not properly report the Assistance Listing Numbers and grant awards on their FY23 SEFA. This would quantify to approximately 40 percent of the pass-through funds. Questioned Costs: none noted Context: Auditor selected a random sample of six out of nine subrecipients which is approximately 66 percent of the total population. We believe this sample is representative of the population. We inspected the associated subrecipient agreements and inquired with management to validate if they were in compliance with properly identifying to the subrecipients in accordance with the OMB Compliance Supplement May 2023 and 2 CFR 200.331(a)(1). Recommendations: We recommend the Center ensure the required factors of 2 CFR 200.331(a) (1) and the OMB Compliance Supplement May 2023 are identified clearly to the subrecipients in their agreements. We recommend all Subrecipient Monitoring requirements out of the OMB Compliance Supplement are read and understood and implemented for any future subrecipient activity. We recommend reaching out to any subrecipients who have already received these funds to ensure they have properly stated SEFAs. View of Responsible Officials: Management agrees with the finding. Please see the Corrective Action Plan.
COVID-19 Healthy and Equitable Communities-Enhancing Local Capacity-Alaska Initiative to Address COVID-19 Among High Risk, Rural, and Underserved Alaskans---Assistance Listing No. 93.391; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Healthy and Equitable Communities-Enhancing Local Capacity-Immunization Cooperative Agreements--- Assistance Listing No. 93.268; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Criteria and Condition: In accordance with the 2 CFR Part 200, Appendix XI OMB Compliance Supplement May 2023 section “Subrecipient Monitoring” and in accordance with 2 CFR section 200.331(a) says a pass-through entity (PTE) must (1) identify the award and applicable requirements clearly to their subrecipients. This includes clearly identifying the award as a subaward at the time of subaward by providing information described in 2 CFR section 200.331(a)(1). In accordance with the OMB Compliance Supplement May 2023 section “Other Audit Advisories” when COVID-19 funding is subawarded by a pass-through entity from an existing program, the information furnished to subrecipients should distinguish the subawards of incremental COVID-19 funding included in the subawards from non-COVID-19 funding. Without this clear identification, there is a high risk the nine subrecipients were not properly informed they received specific non-COVID-19 and COVID-19 federal funds. Cause: The Center served at the request of the Fairbanks North Star Borough as their designated agency to distribute the Health and Equitable funding from the State of Alaska. The Center did not receive the proper information, training, or guidance from the pass-through entity State of Alaska on how to be a compliant pass-through entity. In effect, the Center did not know to review the requirements from OMB Compliance Supplement May 2023 or 2 CFR section 200.331(a)(1) during the process and procedures of disbursing out awards to subrecipients. The Center used a template used by the State of Alaska. Potential Effect: We estimate taht three of the nine subrecipients potentially did not properly report the Assistance Listing Numbers and grant awards on their FY23 SEFA. This would quantify to approximately 40 percent of the pass-through funds. Questioned Costs: none noted Context: Auditor selected a random sample of six out of nine subrecipients which is approximately 66 percent of the total population. We believe this sample is representative of the population. We inspected the associated subrecipient agreements and inquired with management to validate if they were in compliance with properly identifying to the subrecipients in accordance with the OMB Compliance Supplement May 2023 and 2 CFR 200.331(a)(1). Recommendations: We recommend the Center ensure the required factors of 2 CFR 200.331(a) (1) and the OMB Compliance Supplement May 2023 are identified clearly to the subrecipients in their agreements. We recommend all Subrecipient Monitoring requirements out of the OMB Compliance Supplement are read and understood and implemented for any future subrecipient activity. We recommend reaching out to any subrecipients who have already received these funds to ensure they have properly stated SEFAs. View of Responsible Officials: Management agrees with the finding. Please see the Corrective Action Plan.
COVID-19 Healthy and Equitable Communities-Enhancing Local Capacity-Alaska Initiative to Address COVID-19 Among High Risk, Rural, and Underserved Alaskans---Assistance Listing No. 93.391; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Healthy and Equitable Communities-Enhancing Local Capacity-Immunization Cooperative Agreements--- Assistance Listing No. 93.268; Grant No. 601-314-22001; Grant period: Year ended June 30, 2023; Pass-through entity name: State of Alaska- Department of Health and Social Services-Division of Public Health Criteria and Condition: In accordance with the 2 CFR Part 200, Appendix XI OMB Compliance Supplement May 2023 section “Subrecipient Monitoring” and in accordance with 2 CFR section 200.331(a) says a pass-through entity (PTE) must (1) identify the award and applicable requirements clearly to their subrecipients. This includes clearly identifying the award as a subaward at the time of subaward by providing information described in 2 CFR section 200.331(a)(1). In accordance with the OMB Compliance Supplement May 2023 section “Other Audit Advisories” when COVID-19 funding is subawarded by a pass-through entity from an existing program, the information furnished to subrecipients should distinguish the subawards of incremental COVID-19 funding included in the subawards from non-COVID-19 funding. Without this clear identification, there is a high risk the nine subrecipients were not properly informed they received specific non-COVID-19 and COVID-19 federal funds. Cause: The Center served at the request of the Fairbanks North Star Borough as their designated agency to distribute the Health and Equitable funding from the State of Alaska. The Center did not receive the proper information, training, or guidance from the pass-through entity State of Alaska on how to be a compliant pass-through entity. In effect, the Center did not know to review the requirements from OMB Compliance Supplement May 2023 or 2 CFR section 200.331(a)(1) during the process and procedures of disbursing out awards to subrecipients. The Center used a template used by the State of Alaska. Potential Effect: We estimate taht three of the nine subrecipients potentially did not properly report the Assistance Listing Numbers and grant awards on their FY23 SEFA. This would quantify to approximately 40 percent of the pass-through funds. Questioned Costs: none noted Context: Auditor selected a random sample of six out of nine subrecipients which is approximately 66 percent of the total population. We believe this sample is representative of the population. We inspected the associated subrecipient agreements and inquired with management to validate if they were in compliance with properly identifying to the subrecipients in accordance with the OMB Compliance Supplement May 2023 and 2 CFR 200.331(a)(1). Recommendations: We recommend the Center ensure the required factors of 2 CFR 200.331(a) (1) and the OMB Compliance Supplement May 2023 are identified clearly to the subrecipients in their agreements. We recommend all Subrecipient Monitoring requirements out of the OMB Compliance Supplement are read and understood and implemented for any future subrecipient activity. We recommend reaching out to any subrecipients who have already received these funds to ensure they have properly stated SEFAs. View of Responsible Officials: Management agrees with the finding. Please see the Corrective Action Plan.
(2023-054) Title: Internal control over DOT subrecipient and contractor determinations needs improvement Prior Year Findings: None State Department: Transportation State Bureau: Finance and Administration Planning Federal Agency: U.S. Department of Transportation Assistance Listing Title: Formula Grants for Rural Areas and Tribal Transit Program (COVID-19) Assistance Listing Number: 20.509 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Reporting Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.331; 2 CFR 200.510 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department 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. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) and include the total amount provided to subrecipients from each Federal program. Condition: The Department must complete and submit exhibits and related schedules to the Office of the State Controller (OSC) at the close of each fiscal year to report Federal award information for inclusion on the State’s SEFA. OSC is responsible for compiling this information on behalf of the State. The Office of the State Auditor reviewed SEFA amounts reported to OSC by the Department and identified $3,064,233 of Federal expenditures incorrectly reported as amounts provided to subrecipients that should have been reported as direct expenditures. The Department did not properly document the role of the parties receiving the funds as vendors and contractors or subrecipients. As a result, vendor and contractor payments were incorrectly included in the initial amount reported on the SEFA as amounts provided to subrecipients. Context: The Department erroneously reported amounts provided to subrecipients totaling $16.3 million and direct expenditures totaling $5.6 million. The correct amounts provided to subrecipients totaled $13.3 million and direct expenditures totaled $8.7 million for fiscal year 2023. Cause: • Lack of adequate procedures • Lack of supervisory oversight Effect: • Inaccurate classifications of subrecipients versus vendors could lead to monitoring the activities of vendors, thus utilizing resources that could be allocated to other program needs. • Incomplete or inaccurate reporting of expenditures on the SEFA, which is submitted to the Federal government, may result in incorrect information used for programmatic, policy or statistical purposes. Recommendation: We recommend that the Department enhance procedures to: • document the subrecipient determination process to properly classify vendors and contractors versus subrecipients; and • improve preparation, review, and submission of SEFA information to OSC. Corrective Action Plan: See F-25 Management’s Response: The Department agrees with this finding. The Department will update procedures to ensure the classification of subrecipients versus contractors is documented and to improve the SEFA information that is submitted. Contact: Kathleen Malcolm, Financial Processing Director, MDOT, 207-624-3292 (State Number: 23-1402-01)
(2023-054) Title: Internal control over DOT subrecipient and contractor determinations needs improvement Prior Year Findings: None State Department: Transportation State Bureau: Finance and Administration Planning Federal Agency: U.S. Department of Transportation Assistance Listing Title: Formula Grants for Rural Areas and Tribal Transit Program (COVID-19) Assistance Listing Number: 20.509 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Reporting Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.331; 2 CFR 200.510 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department 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. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) and include the total amount provided to subrecipients from each Federal program. Condition: The Department must complete and submit exhibits and related schedules to the Office of the State Controller (OSC) at the close of each fiscal year to report Federal award information for inclusion on the State’s SEFA. OSC is responsible for compiling this information on behalf of the State. The Office of the State Auditor reviewed SEFA amounts reported to OSC by the Department and identified $3,064,233 of Federal expenditures incorrectly reported as amounts provided to subrecipients that should have been reported as direct expenditures. The Department did not properly document the role of the parties receiving the funds as vendors and contractors or subrecipients. As a result, vendor and contractor payments were incorrectly included in the initial amount reported on the SEFA as amounts provided to subrecipients. Context: The Department erroneously reported amounts provided to subrecipients totaling $16.3 million and direct expenditures totaling $5.6 million. The correct amounts provided to subrecipients totaled $13.3 million and direct expenditures totaled $8.7 million for fiscal year 2023. Cause: • Lack of adequate procedures • Lack of supervisory oversight Effect: • Inaccurate classifications of subrecipients versus vendors could lead to monitoring the activities of vendors, thus utilizing resources that could be allocated to other program needs. • Incomplete or inaccurate reporting of expenditures on the SEFA, which is submitted to the Federal government, may result in incorrect information used for programmatic, policy or statistical purposes. Recommendation: We recommend that the Department enhance procedures to: • document the subrecipient determination process to properly classify vendors and contractors versus subrecipients; and • improve preparation, review, and submission of SEFA information to OSC. Corrective Action Plan: See F-25 Management’s Response: The Department agrees with this finding. The Department will update procedures to ensure the classification of subrecipients versus contractors is documented and to improve the SEFA information that is submitted. Contact: Kathleen Malcolm, Financial Processing Director, MDOT, 207-624-3292 (State Number: 23-1402-01)
Federal Agency: US Department of Education (ED) Program Name: Elementary and Second School Emergency Relief Fund ALN #: 84.425D Award Numbers: 826 DOE ISBE Loyola Partnership; Federal Award Year 2022 - 2023 Questioned Costs: N/A 2023-009. Finding: Lack of Subrecipient Monitoring The University of Illinois Springfield did not properly perform required subrecipient monitoring procedures on a certain subrecipient and the internal controls in place failed to ensure all monitoring procedures were performed. For one out of two subrecipients tested, the University of Illinois Springfield did not properly perform subrecipient monitoring procedures. The incorrect agreement template was used which did not allow for the required data elements and a risk evaluation was not performed in order to ensure accountability of for-profit subrecipients under the Education Stabilization Fund. Uniform Grant Guidance (2 CFR 200.331 and 2 CFR 200.332) requires all pass-through entities to: identify the award and applicable requirements, evaluate risk, monitor the activities of the subrecipient, and ensure accountability of for-profit subrecipients. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that subrecipient monitoring is performed over all subawards. University officials stated due to staff turnover and workload, the agreement template issued was incorrect and a risk assessment was not conducted for the subrecipient. Lack of properly documented evidence of subrecipient monitoring policies and procedures may result in the loss of future funding. (Finding Code No. 2023-009) Recommendation: We recommend the University of Illinois Springfield review current processes and procedures to ensure subrecipient monitoring is performed for all subawards. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agency: US Department of Education (ED) Program Name: Elementary and Second School Emergency Relief Fund ALN #: 84.425D Award Numbers: 826 DOE ISBE Loyola Partnership; Federal Award Year 2022 - 2023 Questioned Costs: N/A 2023-009. Finding: Lack of Subrecipient Monitoring The University of Illinois Springfield did not properly perform required subrecipient monitoring procedures on a certain subrecipient and the internal controls in place failed to ensure all monitoring procedures were performed. For one out of two subrecipients tested, the University of Illinois Springfield did not properly perform subrecipient monitoring procedures. The incorrect agreement template was used which did not allow for the required data elements and a risk evaluation was not performed in order to ensure accountability of for-profit subrecipients under the Education Stabilization Fund. Uniform Grant Guidance (2 CFR 200.331 and 2 CFR 200.332) requires all pass-through entities to: identify the award and applicable requirements, evaluate risk, monitor the activities of the subrecipient, and ensure accountability of for-profit subrecipients. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that subrecipient monitoring is performed over all subawards. University officials stated due to staff turnover and workload, the agreement template issued was incorrect and a risk assessment was not conducted for the subrecipient. Lack of properly documented evidence of subrecipient monitoring policies and procedures may result in the loss of future funding. (Finding Code No. 2023-009) Recommendation: We recommend the University of Illinois Springfield review current processes and procedures to ensure subrecipient monitoring is performed for all subawards. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient 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); 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 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)). A PTE must also 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)), and 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)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient 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); 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 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)). A PTE must also 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)), and 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)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient 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); 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 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)). A PTE must also 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)), and 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)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient 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); 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 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)). A PTE must also 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)), and 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)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.