Criteria or specific requirement: Per 2 CFR 200.331(a) states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes, federal award identification, subrecipient name, subrecipient?s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient?s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient?s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County?s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. A subrecipient was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. Two of the five subrecipients were missing an internal checklist that is signed by the County Manager. One of the five subrecipients was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: No. Recommendation: We recommend that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes, federal award identification, subrecipient name, subrecipient?s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient?s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient?s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County?s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. A subrecipient was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. Two of the five subrecipients were missing an internal checklist that is signed by the County Manager. One of the five subrecipients was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: No. Recommendation: We recommend that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes, federal award identification, subrecipient name, subrecipient?s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient?s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient?s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County?s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. A subrecipient was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. Two of the five subrecipients were missing an internal checklist that is signed by the County Manager. One of the five subrecipients was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: No. Recommendation: We recommend that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-004: Internal Controls over Compliance and Other Matters M. Subrecipient Monitoring U.S. DEPARTMENT OF JUSTICE Children Exposed to Violence ? Assistance Listing No. 16.818 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES COVID-19 ? Community Services Block Grant? Assistance Listing No. 93.569 Criteria: The Uniform Guidance requires program participants who are pass-through entities to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f)). All pass-through entities must also ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following specific required information: federal award identification information, all requirements imposed by the pass-through entity, any additional requirements to meet the pass-through entity?s responsibilities, information on the indirect cost rate, requirements to permit access to subrecipients? records and statements, and appropriate closeout terms and conditions (2 CFR section 200.332). Condition: The U.S. Department of Justice?s (DOJ) EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) noted compliance issues over Youthprise?s subrecipient monitoring. Deficiencies included the budget, risk assessments, determination of suitability, lobbying forms, and missing documentation as it related to its subrecipient grants. A formal letter was issued to Youthprise dated November 8, 2022, detailing the compliance issues noted. In addition, the subgrant agreements awarded for the COVID-19 ? Community Services Block Grant program did not include the required information per 2 CFR section 200.332. Cause: Internal controls were not in place to ensure Youthprise followed the subrecipient monitoring requirements outlined in 2 CFR section 200.331 and 200.332. Effect: The conditions noted above resulted in noncompliance over subrecipient monitoring by Youthprise. Context: The DOJ completed a EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) during 2022. The DOJ outlined specific recommendations in its EPDR letter dated November 22, 2022 to address the conditions noted above and requested resolution to the conditions noted in its EPDR within 20 calendar days. DOJ completed a follow-up site visit at Youthprise on July 10, 2023 and determined all compliance issues to have been adequately resolved. The original agreement from Community Action Partnership of Hennepin County for the COVID-19 ? Community Services Block Grant program did not specify that Youthprise was considered a subrecipient of these federal funds, nor did it contain the required information under 2 CFR section 200.332. Youthprise originally considered themselves a contractor under the agreement and therefore the required subaward information per 2 CFR section 200.332 was not included in the subgrant agreements. Subsequently, it was verified with the pass-through entity that Youthprise is considered a subrecipient for this program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Youthprise review procedures to ensure adequate subrecipient monitoring is being performed over all subrecipient agreements, that meet the requirements of 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in Youthprise?s Corrective Action Plan.
Finding 2022-004: Internal Controls over Compliance and Other Matters M. Subrecipient Monitoring U.S. DEPARTMENT OF JUSTICE Children Exposed to Violence ? Assistance Listing No. 16.818 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES COVID-19 ? Community Services Block Grant? Assistance Listing No. 93.569 Criteria: The Uniform Guidance requires program participants who are pass-through entities to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f)). All pass-through entities must also ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following specific required information: federal award identification information, all requirements imposed by the pass-through entity, any additional requirements to meet the pass-through entity?s responsibilities, information on the indirect cost rate, requirements to permit access to subrecipients? records and statements, and appropriate closeout terms and conditions (2 CFR section 200.332). Condition: The U.S. Department of Justice?s (DOJ) EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) noted compliance issues over Youthprise?s subrecipient monitoring. Deficiencies included the budget, risk assessments, determination of suitability, lobbying forms, and missing documentation as it related to its subrecipient grants. A formal letter was issued to Youthprise dated November 8, 2022, detailing the compliance issues noted. In addition, the subgrant agreements awarded for the COVID-19 ? Community Services Block Grant program did not include the required information per 2 CFR section 200.332. Cause: Internal controls were not in place to ensure Youthprise followed the subrecipient monitoring requirements outlined in 2 CFR section 200.331 and 200.332. Effect: The conditions noted above resulted in noncompliance over subrecipient monitoring by Youthprise. Context: The DOJ completed a EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) during 2022. The DOJ outlined specific recommendations in its EPDR letter dated November 22, 2022 to address the conditions noted above and requested resolution to the conditions noted in its EPDR within 20 calendar days. DOJ completed a follow-up site visit at Youthprise on July 10, 2023 and determined all compliance issues to have been adequately resolved. The original agreement from Community Action Partnership of Hennepin County for the COVID-19 ? Community Services Block Grant program did not specify that Youthprise was considered a subrecipient of these federal funds, nor did it contain the required information under 2 CFR section 200.332. Youthprise originally considered themselves a contractor under the agreement and therefore the required subaward information per 2 CFR section 200.332 was not included in the subgrant agreements. Subsequently, it was verified with the pass-through entity that Youthprise is considered a subrecipient for this program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Youthprise review procedures to ensure adequate subrecipient monitoring is being performed over all subrecipient agreements, that meet the requirements of 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in Youthprise?s Corrective Action Plan.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) 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 (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. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions ? Our examination of the program?s subrecipient monitoring requirements includes the review and approval of financial and performance reports by the program managers. The financial reports are prepared by APS? grants administrator and submitted to the program managers whilst the performance reports and information are submitted by the subrecipients directly to the program managers. Of the program?s nineteen (19) subrecipients, we examined fifteen (15) subrecipients and observed that there was no consistent evidentiary documentation to support the monitoring oversight process performed by the respective program managers. However, we noted that APS did perform the required monitoring procedures and oversight of the subrecipients? financial and programmatic activities based on our review of program reports submitted to NSF, e-mail communication and minutes of meetings held during the year. We selected four (4) subrecipients and noted that for all the subrecipients selected, APS was unable to provide consistent evidentiary documentation to show that it had reviewed the subrecipients? single audit reports during the year. A subsequent review of the subrecipients? audit reports was performed and no reported deficiencies relating to APS? subawards was noted. We also tested a sample of two subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds and three grant amendments in the FSRS Reporting System to fulfil the FFATA requirements. Cause ? Management does not have adequate internal controls and policies in place to ensure that the monitoring controls performed over its subrecipients are documented appropriately and in a timely manner. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS? noncompliance with the reporting requirements.Effect or potential effect ? APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. Failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs ? None. Context ? These are conditions identified per review of APS? compliance with specified compliance requirements using a statistically valid sample. Recommendations ? BDO recommends that APS implement policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are consistently documented and maintained. BDO also recommends that APS establish policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) 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 (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. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions ? Our examination of the program?s subrecipient monitoring requirements includes the review and approval of financial and performance reports by the program managers. The financial reports are prepared by APS? grants administrator and submitted to the program managers whilst the performance reports and information are submitted by the subrecipients directly to the program managers. Of the program?s nineteen (19) subrecipients, we examined fifteen (15) subrecipients and observed that there was no consistent evidentiary documentation to support the monitoring oversight process performed by the respective program managers. However, we noted that APS did perform the required monitoring procedures and oversight of the subrecipients? financial and programmatic activities based on our review of program reports submitted to NSF, e-mail communication and minutes of meetings held during the year. We selected four (4) subrecipients and noted that for all the subrecipients selected, APS was unable to provide consistent evidentiary documentation to show that it had reviewed the subrecipients? single audit reports during the year. A subsequent review of the subrecipients? audit reports was performed and no reported deficiencies relating to APS? subawards was noted. We also tested a sample of two subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds and three grant amendments in the FSRS Reporting System to fulfil the FFATA requirements. Cause ? Management does not have adequate internal controls and policies in place to ensure that the monitoring controls performed over its subrecipients are documented appropriately and in a timely manner. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS? noncompliance with the reporting requirements.Effect or potential effect ? APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. Failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs ? None. Context ? These are conditions identified per review of APS? compliance with specified compliance requirements using a statistically valid sample. Recommendations ? BDO recommends that APS implement policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are consistently documented and maintained. BDO also recommends that APS establish policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) 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 (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. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions ? Our examination of the program?s subrecipient monitoring requirements includes the review and approval of financial and performance reports by the program managers. The financial reports are prepared by APS? grants administrator and submitted to the program managers whilst the performance reports and information are submitted by the subrecipients directly to the program managers. Of the program?s nineteen (19) subrecipients, we examined fifteen (15) subrecipients and observed that there was no consistent evidentiary documentation to support the monitoring oversight process performed by the respective program managers. However, we noted that APS did perform the required monitoring procedures and oversight of the subrecipients? financial and programmatic activities based on our review of program reports submitted to NSF, e-mail communication and minutes of meetings held during the year. We selected four (4) subrecipients and noted that for all the subrecipients selected, APS was unable to provide consistent evidentiary documentation to show that it had reviewed the subrecipients? single audit reports during the year. A subsequent review of the subrecipients? audit reports was performed and no reported deficiencies relating to APS? subawards was noted. We also tested a sample of two subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds and three grant amendments in the FSRS Reporting System to fulfil the FFATA requirements. Cause ? Management does not have adequate internal controls and policies in place to ensure that the monitoring controls performed over its subrecipients are documented appropriately and in a timely manner. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS? noncompliance with the reporting requirements.Effect or potential effect ? APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. Failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs ? None. Context ? These are conditions identified per review of APS? compliance with specified compliance requirements using a statistically valid sample. Recommendations ? BDO recommends that APS implement policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are consistently documented and maintained. BDO also recommends that APS establish policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
FINDING 2022-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number or Year (or Other Identifying Number): CY2021 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Condition and Context The City received a total State and Local Fiscal Recovery Funds (SLFRF) allocation of $18,042,360. The City enlisted a non-profit, Heart City Health Center, Inc., to assist with public health information and paid them $50,000. The payment was made under the Responding to Public Health and Economic Impacts of COVID-19 eligible use category. Documentation to support the payment included an invoice from the Heart City Health Center, Inc., Board of Works Resolution 21-R-19, and Ordinance 5861. The Board of Works approved Resolution 21-R-19 on December 28, 2021. The resolution states in part, "Heart City Health Center is a separate legal entity from the City of Elkhart and as a separate legal entity, requires the formation of a subrecipient agreement to transfer funds from the City's ARPA Coronavirus State and Local Fiscal Recovery Funds allocation to Heart City Health . . . now, therefore be it resolved, the Board of Public Works approves Heart City Health Center Inc. as a subrecipient of fifty thousand dollars in ARPA state and local fiscal recovery funds, and authorizes the Department of Law to prepare an appropriates subrecipient agreement for execution by the Board of Works and Heart City Health Center Inc. for the purposes approved herein . . ." The City provided SLFRF award funds to the Heart City Health Center, Inc. to carry out a program on the City's behalf, making the Heart City Health Center, Inc. a subrecipient of the City, as noted in their resolution, and, therefore, subject to subrecipient monitoring. The City was unable provide a copy of the subaward agreement or other supporting documentation to show evaluation of the subrecipient's risk of noncompliance or monitoring activities demonstrating compliance with the subrecipient monitoring requirement. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.331(a) states in part: "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. . . . 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 . . ." 2 CFR 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward . . . (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per ? 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with ? 200.405(d). (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward. . . . (b) Evaluate each subrecipient's risk of noncompliance with Federal statues, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring . . . (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the passthrough entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. . . ." Cause The system of internal controls as established by management of the City was not properly designed nor implemented. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. The City was responsible for providing a subaward agreement and monitoring the nonprofit. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal controls and develop policies and procedures to ensure subrecipients are provided with an adequate subaward agreement and monitored as appropriate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022-002 Finding – Federal Award Type: Subrecipient Monitoring –Material Non-Compliance and Weakness in Internal Control Over Compliance. Identification of Federal Program: Research and Development Cluster: AL Number: 81.086 Conservation Research and Development Program Criteria / Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2CFR§200.331, a pass-through entity must clearly identify to the subrecipient the award as a subaward by providing the required federal information related to the award, 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 provisions of contracts and grants agreements. The pass-through entity must evaluate risk of non-compliance of each subrecipient, monitoring the subrecipient and ensuring accountability of for-profit subrecipients. Condition / Context: Forth passed through $75,170 in funding to subrecipients under Assistance Listing 81.086. During our audit, we noted that Forth did not have documented written procedures or controls in place to ensure compliance with the U.S. Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) subrecipient monitoring requirements. Per review of subaward contracts, required federal contract information was not clearly identified. Further, subrecipients were not evaluated for risk of non-compliance, were not monitored, and there were no procedures in place to ensure the accountability of for-profit subrecipients. Cause: Procedures are not in place to ensure that Forth is providing adequate subaward
2022-004 Subrecipient Monitoring Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Effort Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Award Period: 2022 and 2021 Pass-through Entity: n/a Questioned Costs: None Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The requirements for subrecipient monitoring for the subaward are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of the award. The County must do the following: (1) Review the pass-through entity (PTE’s) subrecipient monitoring policies and procedures to gain an understanding of the PTE’s process to identify subawards, evaluate risk of noncompliance, and perform monitoring procedures based upon identified risks. (2) Review subaward documents including the terms and conditions of the subaward to ascertain if, at the time of subaward (or subsequent subaward modification), the PTE made 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. (3) Review the PTE’s documentation of monitoring the subaward and consider if the PTE’s monitoring provided reasonable assurance that the subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. (4) Ascertain if the PTE verified that subrecipients expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement (2 CFR section 200.331(f)). This verification may be performed as part of the required monitoring under 2 CFR section 200.331(d)(2) to ensure that the subrecipient takes timely and appropriate action on deficiencies detected though audits. Condition: During our testing, it was noted the County did not have adequate controls designed to ensure that subrecipient monitoring requirements were being met. Context: Of the 3 subrecipients tested, all 3 did not included signed, formal agreements between the County and subrecipients. Cause: The County has not designed and implemented internal controls to ensure compliance with subrecipient monitoring requirements. Effect: The County was not communicating the required information to subrecipients through a formal agreement. Recommendation: We recommend the County implement internal control(s) to ensure that required subrecipient monitoring through formal agreements is completed. Repeat Finding: No Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Program: Assistance Listing #14.228, Community Development Block Grant, U.S. Department of Housing and Urban Development, Passed through the Pennsylvania Department of Community and Economic Development, Pass-Through Entity Identifying Numbers: C000066177, C000067301, C000070907, C000073805, C000076178, C000075471 and C000062142 Assistance Listing #21.023, Emergency Rental Assistance Program, U.S. Department of Treasury, Passed through the Pennsylvania Department of Human Services, Pass-Through Entity Identifying Number: N/A Prior Year Finding Number 2021-004 Criteria: The requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), §200.331 Requirements for Pass-through Entities, requires entities who pass federal funding through to subrecipients evaluate each subrecipient's risk of noncompliance. As detailed in 2 CFR sections 200.331(d) through (f), the Uniform Guidance requires pass-through entities to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient, as detailed in 2 CFR section 200.521. Condition: As part of our follow-up on previous audit findings, it was noted that the County is not performing monitoring activities over its subrecipient in compliance with the Uniform Guidance. Additionally, it was noted that the County did not issue a management decision for an audit finding pertaining to the Federal award provided to the subrecipient in a prior year. Questioned Costs: N/A Cause: The County does not have in place sufficient monitoring activities for its subrecipient, representing a significant deficiency in internal control over compliance. Effect: The County is not in compliance with certain requirements of the Uniform Guidance. Context: Title IV-E funding is passed through to the Lycoming-Clinton Mental Health and Intellectual Disabilities Joinder Board. The governing body of the Joinder consists of the Board of Commissioners of Lycoming and Clinton Counties, which allow each County 50% control. While it has been determined that the County has risk assessment and subrecipient monitoring policies and procedures in place for its pass-through entities related to other federal programs, management at the County has taken the position that the Title IV-E program is being monitored because of the unique nature of the funding being passed through to the Joinder Board. Recommendation: We recommend that County management perform monitoring activities for the Title IV-E program similar to the policies and procedures it has in place for its other pass-through activities. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to provide better oversight and monitoring of entities that receive pass-through grant dollars. See corrective action plan.
Federal Program: Assistance Listing #14.228, Community Development Block Grant, U.S. Department of Housing and Urban Development, Passed through the Pennsylvania Department of Community and Economic Development, Pass-Through Entity Identifying Numbers: C000066177, C000067301, C000070907, C000073805, C000076178, C000075471 and C000062142 Assistance Listing #21.023, Emergency Rental Assistance Program, U.S. Department of Treasury, Passed through the Pennsylvania Department of Human Services, Pass-Through Entity Identifying Number: N/A Prior Year Finding Number 2021-004 Criteria: The requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), §200.331 Requirements for Pass-through Entities, requires entities who pass federal funding through to subrecipients evaluate each subrecipient's risk of noncompliance. As detailed in 2 CFR sections 200.331(d) through (f), the Uniform Guidance requires pass-through entities to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient, as detailed in 2 CFR section 200.521. Condition: As part of our follow-up on previous audit findings, it was noted that the County is not performing monitoring activities over its subrecipient in compliance with the Uniform Guidance. Additionally, it was noted that the County did not issue a management decision for an audit finding pertaining to the Federal award provided to the subrecipient in a prior year. Questioned Costs: N/A Cause: The County does not have in place sufficient monitoring activities for its subrecipient, representing a significant deficiency in internal control over compliance. Effect: The County is not in compliance with certain requirements of the Uniform Guidance. Context: Title IV-E funding is passed through to the Lycoming-Clinton Mental Health and Intellectual Disabilities Joinder Board. The governing body of the Joinder consists of the Board of Commissioners of Lycoming and Clinton Counties, which allow each County 50% control. While it has been determined that the County has risk assessment and subrecipient monitoring policies and procedures in place for its pass-through entities related to other federal programs, management at the County has taken the position that the Title IV-E program is being monitored because of the unique nature of the funding being passed through to the Joinder Board. Recommendation: We recommend that County management perform monitoring activities for the Title IV-E program similar to the policies and procedures it has in place for its other pass-through activities. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to provide better oversight and monitoring of entities that receive pass-through grant dollars. See corrective action plan.
SOME FEDERAL AWARDS MAY CONTAIN COST LIMITATIONS ON RECOVERY OF INDIRECT COSTS THAT DIFFER FROM THE FEDERALLY NEGOTIATED INDIRECT COST RATES. IN THESE CASES, THE INDIRECT COST RATE WILL BE SPECIFIED IN THE AWARD, AD DESCRIBED IN 2 CFR SECTIONS 200.210(A)(15) AND 200.331(A)(1)(XIII). NONPROFIT ORGANIZATIONS MUST CONFORM TO COST PRINCIPLES IN 2 CFR PART 200, SUBPART E, APPENDIX IV, AND CAS (IF APPLICABLE), AND IN ACCORDANCE WITH ANY NEGOTIATED RATE AGREEMENTS AND SPECIFIC AWARD CONDITIONS/LIMITATIONS. ADDITIONALLY, RATES USED MUST BE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AWARD AND THE AMOUNTS CLAIMED MUST BE APPLIED TO THE APPROPRIATE BASE. IDAHO IMMUNIZATION COALITION, INC. WAS UNABLE TO PROVIDE DOCUMENTATION OF AN APPROPRIATE BASE OF EXPENDITURES FOR THE AWARD APPROVED RATE WAS APPLIED TO.
Finding 2022-001 – Subrecipient Monitoring Criteria: In accordance with 2 CFR §200.331(d), pass-through entities are required to monitor the activities of subrecipients as necessary to ensure that subawards are used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. Additionally, effective subrecipient monitoring should include review of financial and compliance reporting, follow-up on deficiencies, and ensuring that subrecipients properly meet Federal and other compliance requirements. Condition: During our testing of subrecipient monitoring controls, we noted that the Organization did not adequately monitor a subrecipient that was awarded Federal funds. Specifically, the subrecipient failed to collect and remit required payroll taxes and did not file quarterly IRS Form 941 payroll tax returns. The Organization did not identify these compliance issues in the course of its monitoring procedures. Cause: The Organization has not established sufficient subrecipient monitoring procedures to verify that subrecipients are fulfilling all required financial, tax, and compliance obligations. Monitoring activities typically involved reviewing invoices, time sheets, program reports, but did not include reviewing for compliance with Federal payroll and tax reporting requirements. Furthermore, there was not a clear understanding between the grantor (City of Chicago), the Community Based Organizations and the Chicago Parks Foundation regarding the necessity to specially monitor the process of payroll tax return preparation. Effect: Failure to adequately monitor subrecipients increases the risk of noncompliance with Federal requirements and could result in questioned costs, repayment of Federal funds, penalties, or reputational risk to the Organization as the pass-through entity. The absence of proper oversight also exposes Federal awards to potential misuse or mismanagement by the Community Based Organization, which where the subrecipients. Questioned Costs: At the time of our audit, the amount of questioned costs, if any, has not been determined. Recommendation: We recommend that the Organization strengthen its subrecipient monitoring procedures by: • Implementing monitoring activities that include verification of payroll tax filings (e.g., IRS Form 941) and remittances for subrecipients. • Establishing policies requiring periodic certification or submission of compliance documentation from subrecipients. • Providing training to staff responsible for subrecipient monitoring to ensure all aspects of Federal compliance are addressed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The Organization will implement enhanced monitoring procedures, including requiring subrecipients to provide evidence of payroll tax compliance, and will expand its monitoring checklist to ensure IRS filing obligations are met.
Finding No.: 2022-023 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 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, 2022, GovGuam reported $195.6 million in total program expenditures in the Schedule of Federal Awards (SEFA). A total of $104M represents amounts passed through to GovGuam line agencies and component units, . Of this amount, approximately $48.9 million represents payments for various programs administered by Guam Economic Development Authority (GEDA). Only $55.1 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 77 Finding No.: 2022-023, 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 is undergoing a Single Audit for FY 2022. Identification as a Repeat Finding: Finding 2021-021 Recommendation: GovGuam should enforce compliance with applicable subrecipient monitoring requirements. Responsible personnel should monitor subrecipients for compliance with Single Audit Act 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. Government of Guam Schedule of Findings and Questioned Costs, continued 78 Finding No.: 2022-023, 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 Views of Responsible Officials: As for Fiscal Year 2022, payments to beneficiaries under the GEDA program were made directly by DOA. GEDA was not in receipt of any funds and by that plain language cannot be considered a subrecipient. DOA determined in accordance with 2CFR 200.331 that GEDA was not a Subrecipient: Auditors may, but have not to date, requested access to GEDA and DOA records for verification eligibility. CFR§200.331 reads: “(c) Use of judgment in making a determination. In determining whether an agreement between a pass-through entity and another non-federal entity cast the latter as a Subrecipient or a contractor, the substance of the relations is more important than the form of the agreement. All the characteristics listed above may not be present in all cases, and the pass-through entity must use judgement in classifying each agreement as a subaward or a procurement contract.” Auditor Response: DOA’s determination differs from our judgement in classifying the agreement with GEDA. CFR§200.331 also reads: “ (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…. 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;… .” The substance of the relations is for GEDA to carry out a key portion of the Federal award by determining who is eligible to receive Federal assistance, as well as how much each beneficiary should receive, which is more important than the form of the agreement for DOA to act as a financial institution in writing the check. Therefore, GEDA meets the definition of a subrecipient, which is consistent with the fact that GovGuam did not subject the selection of GEDA to a procurement process. Examination by auditors of GEDA’s records as to beneficiary eligibility is not required because the compliance requirement of eligibility is not subject to audit per the OMB Compliance Supplement. Moreover, such eligibility tests would not address this finding relative to subrecipient monitoring. There is no evidence that DOA monitored GEDA’s eligibility determinations for FY 2022.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 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 subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 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 subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 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 subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 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 subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Finding No.: 2022-023 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 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, 2022, GovGuam reported $195.6 million in total program expenditures in the Schedule of Federal Awards (SEFA). A total of $104M represents amounts passed through to GovGuam line agencies and component units, . Of this amount, approximately $48.9 million represents payments for various programs administered by Guam Economic Development Authority (GEDA). Only $55.1 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 77 Finding No.: 2022-023, 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 is undergoing a Single Audit for FY 2022. Identification as a Repeat Finding: Finding 2021-021 Recommendation: GovGuam should enforce compliance with applicable subrecipient monitoring requirements. Responsible personnel should monitor subrecipients for compliance with Single Audit Act 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. Government of Guam Schedule of Findings and Questioned Costs, continued 78 Finding No.: 2022-023, 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 Views of Responsible Officials: As for Fiscal Year 2022, payments to beneficiaries under the GEDA program were made directly by DOA. GEDA was not in receipt of any funds and by that plain language cannot be considered a subrecipient. DOA determined in accordance with 2CFR 200.331 that GEDA was not a Subrecipient: Auditors may, but have not to date, requested access to GEDA and DOA records for verification eligibility. CFR§200.331 reads: “(c) Use of judgment in making a determination. In determining whether an agreement between a pass-through entity and another non-federal entity cast the latter as a Subrecipient or a contractor, the substance of the relations is more important than the form of the agreement. All the characteristics listed above may not be present in all cases, and the pass-through entity must use judgement in classifying each agreement as a subaward or a procurement contract.” Auditor Response: DOA’s determination differs from our judgement in classifying the agreement with GEDA. CFR§200.331 also reads: “ (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…. 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;… .” The substance of the relations is for GEDA to carry out a key portion of the Federal award by determining who is eligible to receive Federal assistance, as well as how much each beneficiary should receive, which is more important than the form of the agreement for DOA to act as a financial institution in writing the check. Therefore, GEDA meets the definition of a subrecipient, which is consistent with the fact that GovGuam did not subject the selection of GEDA to a procurement process. Examination by auditors of GEDA’s records as to beneficiary eligibility is not required because the compliance requirement of eligibility is not subject to audit per the OMB Compliance Supplement. Moreover, such eligibility tests would not address this finding relative to subrecipient monitoring. There is no evidence that DOA monitored GEDA’s eligibility determinations for FY 2022.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.