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 Number: 2022-041 Prior Year Finding Number: 2021-036 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Treasury COVID-19 - Coronavirus Relief Fund ALN: 21.019 Award #: N/A Award Period: 03/01/2020 – 12/31/2021 Government Department/Agency: Office of Management and Budget (OMB) Criteria – A pass-through entity (PTE) must: Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: 1. The award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); 2. All requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); 3. Any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 1. The subrecipient’s prior experience with the same or similar subawards; 2. The results of previous audits including whether or not the subrecipient receives single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 3. Whether the subrecipient has new personnel or new or substantially changed systems; and 4. The extent and results of federal awarding agency monitoring (e.g., if the subrecipient also receives federal awards directly from a federal awarding agency). Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed two sub-awards made during 2022 and found that OMB did not evaluate the risks or monitor the two subrecipients. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements. Questioned Costs – None. Context – This is a condition identified per review of OMB’s compliance with the specified requirements and general compliance principles. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $4,500,000. Effect – OMB is not in compliance with the stated provisions. Failure to properly monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – OMB does not have internal controls in place to properly monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that OMB implement policies, procedures, and controls to ensure subrecipients are monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. OMB will establish a robust framework featuring detailed monitoring procedures, regular compliance checks, and comprehensive oversight mechanisms to ensure subrecipients adhere to federal requirements. This framework aims to promote accountability, proper use of federal funds, mitigate risks, enhance transparency, and ensure subrecipients effectively fulfill their obligations under federal statutes. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2022-045 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Treasury COVID-19 - Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Period: 03/03/2021 – 12/31/2024 Government Department/Agency: Office of Management and Budget (OMB) Criteria – A pass-through entity (PTE) must: Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: 1. The award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); 2. All requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); 3. Any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 1. The subrecipient’s prior experience with the same or similar subawards; 2. The results of previous audits including whether or not the subrecipient receives single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 3. Whether the subrecipient has new personnel or new or substantially changed systems; and 4. The extent and results of federal awarding agency monitoring (e.g., if the subrecipient also receives federal awards directly from a federal awarding agency). Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We obtained a list of subrecipients from OMB and found that the list identified internal Government of the Virgin Islands (GVI) departments and offices as subrecipients. The list of subrecipients also included an external entity whose federal expenditures are part of the GVI Schedule of Expenditures of Federal Awards. As a result, the listing of subrecipients was amended to exclude 23 projects totaling $23,559,959. Using the amended listing of subrecipients, we selected 12 of 18 subrecipients and found the following: • 3 projects which OMB did not verify if the entity underwent a single audit as required by 2 CFR part 200, subpart F. • 1 project which OMB did not complete their monitoring workbook during the fiscal year • 5 projects in which there was no evidence the monitoring workbook was reviewed by the ARPA Grants Administrator. • 6 projects where entities were identified as subrecipients but were ultimately considered to be beneficiaries of SLFRF funds and not subrecipients. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements or proper identification of subrecipients. Questioned Costs – None. Context – This is a condition identified per review of OMB’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $56,490,165. The total amount of our sample totaled $46,452,928. Effect – OMB is not in compliance with the stated provisions. Failure to properly identify and monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – OMB does not have internal controls in place to properly identify and monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that OMB implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. Starting FY25, OMB will identify and monitor federal awarding agencies, requesting single audit results for applicable recipients and including them in monitoring reviews. For revenue replacement projects, Treasury's Final Rule FAQ (13.14) states that these funds do not create subrecipient relationships, thus exempting them from the Single Audit Act due to the absence of a federal program or purpose. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number 2022-051 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Education Consolidated Grant to the Outlying Areas, ALN: 84.403A Award #: Various Award Period: Various Government Department/Agency: Department of Education (VIDE) Criteria – Per Compliance Supplement, a pass-through entity (PTE) must: • Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). • Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 1. The subrecipient’s prior experience with the same or similar subawards; 2. The results of previous audits including whether or not the subrecipient receives single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 3. Whether the subrecipient has new personnel or new or substantially changed systems; and 4. The extent and results of federal awarding agency monitoring (e.g., if the subrecipient also receives federal awards directly from a federal awarding agency). • Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We sampled subawards to 3 out of 10 subrecipients and found no supporting documentation that VIDE verified that subrecipients expected to be audited as required by 2 CFR part 200, subpart F. Additionally, there was no evidence of award monitoring performed for 2 of the 3 subrecipients tested. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements. Questioned Costs – None. Context – This is a condition identified per review of VIDE’s compliance with the specified requirements and general compliance principles. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $1,051,727. Effect – VIDE is not in compliance with the stated provisions. Failure to properly monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – VIDE does not have internal controls in place to properly monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that VIDE implement policies, procedures, and controls to ensure subrecipients are monitored in accordance with federal statutes. Views of Responsible Officials - The Government concurs with the auditor’s findings and recommendations. VIDE is committed to strengthening controls to ensure subrecipient compliance with federal audit requirements under 2 CFR Part 200, Subpart F. This includes implementing effective measures, such as explicit reporting requirements in subrecipient agreements and providing training to internal staff on subrecipient monitoring requirements and ensure consistent implementation. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2022-082 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Homeland Security Disaster Grants - Public Assistance (Presidentially Declared Disasters) ALN: 97.036 Award #: FEMA-4335-DR, FEMA-4340-DR-VI, FEMA-4513-DR Award Periods: 09/20/2017 – 09/07/2026 09/07/2017 – 09/16/2025 04/02/2020 – 05/11/2023 Government Department/Agency: Virgin Islands Territorial Emergency Management Agency (VITEMA) Criteria – A pass-through entity (PTE) must: Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: 1. The award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); 2. All requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); 3. Any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 1. The subrecipient’s prior experience with the same or similar subawards; 2. The results of previous audits including whether or not the subrecipient receives single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 3. Whether the subrecipient has new personnel or new or substantially changed systems; and 4. The extent and results of federal awarding agency monitoring (e.g., if the subrecipient also receives federal awards directly from a federal awarding agency). Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We selected 8 of 25 subrecipients and found the following: • 5 instances where we were unable to obtain subrecipient agreements. • 8 instances where we were unable to obtain Quarterly Progress Reports. • 3 instances with no Certification Letter of Completion of Work and Disaster Response and Recovery Final Inspection Report. • 8 instances with no supporting documentation that VITEMA verified that subrecipients expected to be audited as required by 2 CFR part 200, subpart F. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements or proper identification of subrecipients. Questioned Costs – None. Context – This is a condition identified per review of VITEMA’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $205,714,063. The total amount of our sample totaled $190,927,885. Effect – VITEMA is not in compliance with the stated provisions. Failure to properly identify and monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – VITEMA does not have internal controls in place to properly identify and monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that VITEMA implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. The formal process for completing and retaining Subrecipient Agreements is now operational to ensure compliance with programmatic obligations. As the Recipient, the Territory is responsible for notifying the Subrecipient when federal funds are obligated and providing them with a subrecipient agreement outlining the program's terms and conditions. The Disaster Program Financial Specialist is responsible for ensuring that the subrecipient agreement is signed by both the Applicant and the Governor's Authorized Representative and provided to the Territorial Public Assistance Officer. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding No. 2022-019 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00016, D19AP00081 D21AP10043, D21AP000138, D19AP00090 Area: Subrecipient Monitoring Questioned Costs: $549,849 Criteria: 1. In accordance with 2 CFR § 200.332, pass-through entity (PTE) must: a. Verify that the subrecipient is not excluded or disqualified in accordance with § 180.300. Verification methods are provided in § 180.300, which include confirming in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. b. Verify that a subrecipient is audited as required by subpart F. 2. In accordance with 2 CFR §200.1, a subrecipient is defined as an entity that receives a subaward from a PTE to carry out part of a Federal award. The term subrecipient does not include a beneficiary or participant. A subrecipient may also be a recipient of other Federal awards directly from a Federal agency. 3. Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient’s risk, a PTE should consider the following: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). Condition: Of nine subrecipients tested, aggregating $1,263,952 of a total population of $2,022,623, the following were noted: 1. For nine (or 100%), documentation of the risk assessments performed and verification as to whether the subrecipients are not suspended or debarred were not provided. No questioned costs for grant awards with no corresponding FY2022 expenditures. Of eight subrecipient monitoring procedure requirements tested, the following were noted: 2. For two (or 25%), the subrecipients’ performance reports did not include the required project narrative report that entails the current state or progress completion in accordance with the scope of work. 3. For eight (or 100%), no verification as to whether the subrecipients are subject to the audit requirements were provided. No questioned costs are presented as amounts are questioned at Condition 1 for grant award numbers D18AP00026, D21AP00138 and D21AP10043 while the other grant awards have no corresponding FY2022 expenditures. Cause: The CNMI does not have written subrecipient monitoring policies and procedures. In addition, the CNMI failed to enforce compliance with subrecipient monitoring requirements and lacks monitoring controls over the following: 1. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 2. Adequate documentation and systematic filing of relevant documentation supporting program costs. Effect: CNMI is in noncompliance with the applicable subrecipient monitoring requirements and questioned costs of $549,849 result for Condition 1. Identification as a Repeat Finding: Finding No. 2021-022 Recommendation: We recommend the CNMI establish an approved/adopted written subrecipient monitoring policies and procedures and implement monitoring internal control procedures over the following: 1. Verification that subrecipients are not excluded or disqualified in accordance with § 180.300, which includes confirming in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving federal funds; 2. Verification that subrecipients are audited as required by subpart F; 3. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 4. Adequate documentation and systematic filing of relevant documentations to support program costs. Views of Responsible Officials: Condition 1 - CIP agrees with this finding. To address this finding, CIP will implement a standardized risk assessment checklist to be used for all subrecipients to confirm they are not suspended, debarred, or excluded under 2 CFR §180.300; all staff responsible for subrecipient monitoring will receive training on federal requirements for exclusion checks and proper documentation procedures; and conduct periodic reviews to ensure that SAM.gov checks are consistently performed and documented for all new and existing subrecipients. Condition 2 - CIP disagrees with this finding. The subrecipient was not required to submit the required project narrative report; instead, the report was prepared and submitted by the project manager responsible for managing the project as assigned by CIP. Condition 3 - We acknowledge the finding that documentation was not provided to verify whether eight subrecipients were subject to the audit requirements. CIP will strengthen its subrecipient monitoring procedures to ensure compliance with 2 CFR 200.331(f) and related audit requirements. Refer to CNMI’s Corrective Action Plan for additional information. Auditor Response: Condition 2 - As stated in the subaward agreements, subrecipients shall furnish to the CNMI, project documents certifying beneficiary occupancy and/or substantial completion. This is done through submission of a project narrative status report to the CNMI, which includes information such as scope of work, percentage of completion, status of the project and anticipated completion date. As subrecipients are required to submit certification of project status, report should be prepared by the subrecipients and should be consistently required for all subawards.
Finding No. 2022-027 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Program Federal Award No.: HAF0205 Area: Subrecipient Monitoring Questioned Costs: $4,157,924 Criteria: In accordance with 2 CFR § 200.332, a pass-through entity (PTE) must establish and implement subrecipient monitoring policies and procedures, including the following: • At the time of the award, clearly identifying to the subrecipient: 1) The award as a subaward at the time of subaward by providing the information described in 2 CFR § 200.332(a)(1); 2) All requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award; and 3) Any additional requirements that the PTE imposes in order for the PTE to meet its own responsibility for the federal award. • Evaluating the impact of subrecipient activities on the PTE’s ability to comply with applicable federal regulations. Condition: 1. We are unable to obtain an understanding of the CNMI’s process to identify subawards, evaluate risk of noncompliance, and perform monitoring procedures based upon identified risks. 2. The CNMI did not provide a subrecipient agreement. Instead, a memorandum of agreement (MOA) was issued between the CNMI and the subrecipient for reimbursement of costs in the planning and administration of the program. The MOA did not have the following required information: • Subrecipient’s unique entity identifier; • Federal Award Identification Number (FAIN); • Federal award Date of award to the recipient by the Federal agency; • Subaward Period of Performance Start and End Date; • Subaward Budget Period Start and End Date; • Amount of Federal Funds Obligated by this action by CNMI; • Total Amount of Federal Funds Obligated to the subrecipient; • Total amount of the Federal award committed to the subrecipient by CNMI; • Federal award project description, as required to be responsive to the Federal Funding and Transparency Act (FFATA); • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the CNMI; • Identification of whether the award is R&D; and • Indirect cost rate for the Federal award (including if the de minimis rate is charged) 3. Documentation was not provided to demonstrate monitoring procedures were performed on the subrecipient. Total FY2022 subrecipient expenditures amounted to $4,157,924, for which the amount is questioned. 4. There was no evidence of procedures used to monitor the subrecipient’s compliance with applicable laws, regulations, and provisions of contracts and grant agreements. Further, we are aware that the subrecipient is subjected to Single Audits; however, there was no evidence that the Single Audit report was used as a monitoring tool. Cause: 1. CNMI has no existing written subrecipient monitoring policies and procedures; and 2. CNMI failed to enforce compliance with subrecipient monitoring requirements. Effect: The CNMI is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $4,157,924 result for Condition 3. Recommendation: The CNMI should establish written policies and procedures over compliance with applicable subrecipient monitoring requirements and consider obtaining training in the area of subrecipient monitoring. Views of Responsible Officials: Conditions 1 to 4 - The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. Refer to CNMI’s Corrective Action Plan for additional information.
Finding No. 2022-031 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Subrecipient Monitoring Questioned Costs: $61,003,095 Criteria: Per the U.S. Treasury Interim and Final Rules, the U.S. Treasury is aligning the definition of subrecipient in the final rule with the definition of subrecipient in the Uniform Guidance, wherein, subrecipients are entities that receive a subaward from a recipient to carry out a program or project on behalf of the recipient with the recipient’s Federal award funding but does not include an individual that is a beneficiary of such award. The recipient remains responsible for monitoring and overseeing the subrecipient’s use of Fiscal Recovery Funds and other activities related to the award to ensure that the subrecipient complies with the statutory and regulatory requirements and the terms and conditions of the award. Recipients also remain responsible for reporting to Treasury on their subrecipients’ use of payments from the Fiscal Recovery Funds for the duration of the award. Accordingly, in accordance with 2 CFR § 200.332, pass-through entity (PTE) must: 1. Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A PTE must provide the best available information when some of the information below is unavailable. A PTE must provide the unavailable information when it is obtained. One of the required information includes: (1) Federal award identification: (i) Subrecipient’s unique entity identifier; (ii) Federal Award Identification Number (FAIN); (iii) Subaward Period of Performance Start and End Date; (iv) Subaward Budget Period Start and End Date; (v) Amount of Federal Funds Obligated in the subaward; (vi) Total Amount of Federal Funds Obligated to the subrecipient by the PTE, including the current financial obligation; (vii) Total Amount of Federal Funds Obligated to the subrecipient by the PTE, including the current financial obligation; and (viii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement. (2) All requirements of the subaward, including requirements imposed by 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 for the pass-through entity to meet its responsibilities under the Federal award. This includes information and certifications (see § 200.415) required for submitting financial and performance reports that the pass-through entity must provide to the Federal agency; (4) A requirement that the subrecipient permit the pass-through entity and auditors to access the subrecipient's records and financial statements for the pass-through entity to fulfill its monitoring requirements; and (5) Appropriate terms and conditions concerning the closeout of the subaward. 2. Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient’s risk, a PTE should consider the following: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). 3. Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The PTE is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a PTE must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the PTE as required by §200.521. (4) Resolve audit findings specifically related to the subaward. However, the PTE is not responsible for resolving cross-cutting audit findings that apply to the subaward and other Federal awards or subawards. If a subrecipient has a current Single Audit report and has not been excluded from receiving Federal funding (meaning, has not been debarred or suspended), the PTE may rely on the subrecipient’s cognizant agency for audit or oversight agency for audit to perform audit follow-up and make management decisions related to cross-cutting audit findings in accordance with section § 200.513(a)(4)(viii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 4. Verify that a subrecipient is audited as required by subpart F. 5. Consider whether the results of a subrecipient's audit, site visits, or other monitoring necessitate adjustments to the pass-through entity's records. Further, in accordance with 31 CFR § 19.300, prior to entering into subawards with award funds, recipients must verify that such subrecipients are not suspended, debarred, or otherwise excluded from receiving federal funds. Condition: 1. Of seventeen subrecipients tested, aggregating $60,403,095 of a total population of $61,003,095, the following were noted: a. For seventeen (or 100%), documentations of the risk assessments performed and verification as to whether the subrecipients are not suspended or debarred were not provided. b. For two (or 12%), subrecipient agreements were not provided. No questioned costs are presented as amounts are questioned at Condition 1a. c. For two (or 12%), subrecipients’ unique entity identifiers, the federal award identification numbers (FAIN), amounts of federal funds obligated by this action by the PTE to the subrecipients, total amount of federal funds obligated to the subrecipients by the PTE, including the current financial obligations and the appropriate terms and conditions concerning the closeout of the subawards, were not included in the subrecipient agreements. No questioned costs are presented as amounts are questioned at Condition 1a. d. For ten (or 59%), subawards were supported with financial assistance request letters from the subrecipients and not with a subaward agreement that CNMI utilizes for other subawards. Accordingly, other than the date of request, amount requested and purpose of the financial assistance, all other required subaward information pursuant to 2 CFR § 200.332, were not indicated. No questioned costs as amounts are questioned at Condition 1a. e. For one (or 6%), no monitoring procedures were performed. No questioned cost is presented as the amount is questioned at Condition 1a. 2. Of sixteen subrecipient monitoring procedure requirements tested, aggregating $58,537,352 of a total population of $58,537,352, for sixteen (or 100%), documentation on monitoring procedures performed were not provided. In addition, documentation of preventive measures taken to mitigate risk from subrecipients that showed elevated risk factors or for identified unallowable activities were not documented and no verification as to whether the subrecipients are subject to the audit requirements. 3. Of sixty monitoring procedure requirements tested at the invoice/disbursement level, aggregating $58,438,922 of a total population of $61,003,095, the following were noted: a. For six (or 10%), review and approval of invoices and/or payments to ensure that subrecipients used the subaward for authorized purposes in compliance with Federal statutes, regulations, and the terms and conditions of the subawards, were not evident. No questioned costs are presented as expenditures pertain to subawards that were questioned at Condition 1a for Award Numbers CNMI22037 and COVID-19 Care Force Project. b. For twenty-four (or 40%), either the check payments and/or invoices or equivalent documentations were not provided; accordingly, the CNMI was not able to substantiate that monitoring procedures were performed to ensure that subrecipients used the subaward for authorized purposes in compliance with Federal statutes, regulations, and the terms and conditions of the subawards. No questioned costs are presented as expenditures pertain to subawards that were questioned at Condition 1a for Award Numbers NMPMG, CNMI 22037, CNMI22044 and COVID-19 Care Force Project and at Condition 2 for Award Reference Number 5302. Cause: The CNMI does not have approved/adopted written subrecipient monitoring policies and procedures. In addition, the CNMI failed to enforce compliance with subrecipient monitoring requirements and lacks monitoring controls over the following: 1. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 2. Adequate documentation and systematic filing of relevant documentation supporting program costs. In addition, for award number CNMI22044, the Entity’s management has determined that it should be classified as a contractor under the agreement as the Entity’s role is to promote the program within the CNMI, develop a marketing and promotional campaign and disburse the award to the recipients identified by the CNMI. The Entity was not involved in reviewing and deciding which grant applicant is eligible to receive the grant. CNMI’s role in the review of grant applications and eligibility determination may have caused confusion as to whether the Entity that received the funds is a subrecipient or a contractor. As of the auditor’s report date, the CNMI and the Entity have yet to conclude whether the Entity received the funds in the role of a subrecipient or a contractor. Effect: The CNMI is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $61,003,095 for Condition 1. Identification as a Repeat Finding: Finding No. 2021-033 Recommendation: We recommend the CNMI establish approved/adopted written subrecipient monitoring policies and procedures and an approved template that includes all required clauses needed for subrecipient agreements. In addition, CNMI should implement monitoring internal control procedures over the following: 1. Preventive measures taken to mitigate risk from subrecipients that showed elevated risk factors or for identified unallowable activities are adequately documented. Recommendation, continued: 2. Verification that subrecipients are audited as required by subpart F; 3. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 4. Provide subrecipients with training and technical assistance on program-related matters, including thorough explanation of their role as subrecipients; 5. Adequate documentation and systematic filing of relevant documentation to support program costs. Views of Responsible Officials: Conditions 1 to 3 - The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. Refer to CNMI’s Corrective Action Plan for additional information.
Finding 2022-003 ? Subrecipient and Contractor Determinations Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A ? Direct Program Award Year: Fiscal Year 2021-2022 Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per ?200.331, a pass-through entity (the County) must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. A pass-through entity (the County) with subrecipients is required to evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Depending upon the pass-through entity?s assessment of risk posed by the subrecipient, the entity must develop techniques/tools to ensure proper accountability and compliance with program requirements and achievement of performance goals by the subrecipient. Condition During our testing of compliance with the subrecipient monitoring requirement, we noted that the County did not have formal, written subrecipient monitoring policies or procedures in place, as the Subrecipient Monitoring Policy document was adopted on June 21, 2022. In addition, management did not conduct pre-award evaluations of whether the agreements made by the County for the disbursement of CSLFRF payments cast the party receiving the funds in the role of a subrecipient or contractor, as four out of four CSLFRF recipients were missing documentation regarding the characteristics which support the classifications and the judgments used to make such determinations. Also, the County did not evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. 20 Cause of Condition The County?s existing internal control system is not properly designed to meet the control objectives under subrecipient monitoring. Repeat Finding No. Effect of Condition There is increased risk of noncompliance with the subrecipient monitoring requirement as set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Failure to perform a comprehensive risk assessment prior to executing subaward agreements may result in an incomplete understanding of a subrecipient?s risk profile, and insufficient monitoring or only relying on self-reporting can allow certain risks to go unaddressed and lead to noncompliance with grant requirements. In addition, an incorrect determination could have a significant impact on whether the party receiving federal funds is required to have an audit. Recommendation We recommend the County design and implement internal control activities over the subrecipient monitoring compliance requirement under the Uniform Guidance. We also recommend the County establish policies and procedures, especially documentation requirements, to make pre-award determinations of whether each agreement it makes for the disbursement of Federal award funds casts the party receiving the funds in the role of a subrecipient or a contractor. In addition, we recommend the County implement a training program for all staff directly involved in the administration of Federal award funds to become knowledgeable of the cost principles and requirements under the Uniform Guidance. Management Response and Corrective Action Plan Management agrees with the findings and has provided the following corrective action plan. 1. County will assess existing policies, design, and implement additional internal control activities over the subrecipients to improve monitoring compliance requirements under the Uniform Guidance. 2. County will establish policies and procedures to document pre-award determinations of whether each agreement it makes for the disbursement of Federal award funds casts the party receiving the funds in the role of a subrecipient or a contractor. 3. County will implement a training program for all staff directly involved in the administration of Federal award funds to become knowledgeable of the cost principles and requirements under the Uniform Guidance.
"Finding 2022-002: Sub-recipients Information on the Federal Programs: Assistance Listing Number 20.521 Criteria or Specific Requirement: As noted in 2 CFR 200.331 part (d): Monitor the activities of the sub-recipient as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions for the sub-award; and that sub-award performance goals are achieved. Condition: During the audit, we noted that JCA does not have policies and procedures in place for monitoring sub-recipients. Cause: JCA does not have policies and procedures in place to be in compliance with monitoring activities of their sub-recipients. Our audit procedures consisted of substantive testwork over a sample of sub-recipient expenditures that were selected based on a threshold. We consider our sample to representative of the population. Effect or Potential Effect: JCA could inadvertently engage in relationships with sub-recipients of higher risk without the appropriate level of oversight (monitoring) to ensure sub-recipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None Context: JCA failed to adequately perform risk assessment procedures, or document its due diligence with monitoring sub-recipients over each of its sub-recipients. Identification as a Repeat Finding, if Applicable: N/A Recommendation: Accordingly, we concluded that certain enhancements would add value to JCA's due diligence with respect to its monitoring processes, and the following are our recommendations (of activities/documents that should be performed/maintained by JCA: ?Create pre-award risk assessment; an evaluation of the financial (and programmatic) risk associated with the intended recipient/grantee for the purpose of determining the expected level of oversight during the period of performance. ?Clearly define in the policies and procedures the difference between a sub-recipient versus a sub-contractor. ?Evidence of an evaluation process with respect to the identification of the prospective recipient. ?A regularly documented review process with respect to periodic financial reports received from grantees. ?An evaluation of the need for a periodic site visit. ?Receipt of the grantee's annual audit reports, if available (to ensure there are no weaknesses or deficiencies in internal control during the grant period). If there are deficiencies that directly the program, then a corrective action plan be established. ?JCA will need to evaluate the FFATA (Federal Funding Accountability and Transparency Act) reporting requirements and comply with the act. "
"Finding 2022-002: Sub-recipients Information on the Federal Programs: Assistance Listing Number 20.521 Criteria or Specific Requirement: As noted in 2 CFR 200.331 part (d): Monitor the activities of the sub-recipient as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions for the sub-award; and that sub-award performance goals are achieved. Condition: During the audit, we noted that JCA does not have policies and procedures in place for monitoring sub-recipients. Cause: JCA does not have policies and procedures in place to be in compliance with monitoring activities of their sub-recipients. Our audit procedures consisted of substantive testwork over a sample of sub-recipient expenditures that were selected based on a threshold. We consider our sample to representative of the population. Effect or Potential Effect: JCA could inadvertently engage in relationships with sub-recipients of higher risk without the appropriate level of oversight (monitoring) to ensure sub-recipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None Context: JCA failed to adequately perform risk assessment procedures, or document its due diligence with monitoring sub-recipients over each of its sub-recipients. Identification as a Repeat Finding, if Applicable: N/A Recommendation: Accordingly, we concluded that certain enhancements would add value to JCA's due diligence with respect to its monitoring processes, and the following are our recommendations (of activities/documents that should be performed/maintained by JCA: ?Create pre-award risk assessment; an evaluation of the financial (and programmatic) risk associated with the intended recipient/grantee for the purpose of determining the expected level of oversight during the period of performance. ?Clearly define in the policies and procedures the difference between a sub-recipient versus a sub-contractor. ?Evidence of an evaluation process with respect to the identification of the prospective recipient. ?A regularly documented review process with respect to periodic financial reports received from grantees. ?An evaluation of the need for a periodic site visit. ?Receipt of the grantee's annual audit reports, if available (to ensure there are no weaknesses or deficiencies in internal control during the grant period). If there are deficiencies that directly the program, then a corrective action plan be established. ?JCA will need to evaluate the FFATA (Federal Funding Accountability and Transparency Act) reporting requirements and comply with the act. "
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
Finding 2022-002 U.S. Department of Health and Human Services Assistance Listing Number 93.044, 93.045, 93.053 ? Aging Cluster Non-compliance with Subrecipient Monitoring Repeat Findings: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 6 out of 6 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County creates a subaward template document that includes all of the required disclosures per the Uniform Guidance, and ensure that the document is used to prepare all subaward contracts throughout the County. Views of Responsible Officials: The County agrees with the finding and notes that the required disclosures per the Uniform Guidance are presented to departments during the Department of Finance?s annual year-end training sessions. This material is available for departments to refer back to throughout the year. The Department of Finance will work to ensure these requirements are presented to targeted individuals who are responsible for subaward contracts. See Section V for the corrective action plan.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must 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. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must 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. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must 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. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must 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. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
SUBRECIPIENT MONITORING Material Weakness Material Noncompliance 2022-017 Strengthen Controls over On-Site Monitoring for the Low Income Home Energy Assistance Program (LIHEAP). ALN Number 93.568 Low Income Home Energy Assistance (LIHEAP) Federal Award No. G2001MSLIE4 2001MSE5C3 G2101MSLIEAR Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The terms and conditions of the grant agreements between the Mississippi Department of Human Services (MDHS) and the U.S. Department of Health and Human Services require MDHS to administer grants in compliance with the Code of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr Part 200.331) designates MDHS as a pass through entity to properly identify subgrant requirements to subrecipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subrecipients as necessary to ensure that subgrants are used for authorized purposes, complies with the terms and conditions of the subgrants and achieves performance goals. The auditor evaluated the Mississippi Department of Human Services' (MDHS's) compliance with subrecipient monitoring requirements based on written policies and procedures designed by MDHS's Office of Compliance - Division of Monitoring (DM) to satisfy during-the-award monitoring requirements. DM procedures require: an on-site monitoring review of each subrecipient contract at least once during the subgrant period. Monitoring tools/checklists are used during each on-site monitoring review to provide guidance and to document a review was performed. The on-site monitoring workpapers are reviewed and approved by DM supervisory personnel prior to issuance of a written report, the Initial Report of Findings & Recommendations, which is used for communicating finding(s) and/or questioned costs to subrecipients. The written report should be issued within 60 days from the date of the exit conference, which is normally held on the last day of the on-site review. Additionally, if the initial report identifies any administrative findings or questioned costs, a response to the findings is required to be submitted by the subrecipient to DM within thirty (30) working days from the date the report was issued. Additionally, The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Manual specifies that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that: the agency perform appropriate multi-level reviews over the monitoring process and the agency ensures timely communication from the subgrantees and timely resolution of findings in order to prevent; detect; and deter fraud, waste, and abuse or the misuse of federal funds. Condition When performing testwork over subrecipient on-site monitoring for 123 subgrant contracts during state fiscal year 2021, we noted the following exceptions: ? Four instances, or 3 percent, in which the Supervisor's Checklist was not included for Subrecipient on the FY 2021 Monitoring Reviews Smartsheet; therefore, auditor could not verify Supervisory Review of the Monitoring process. ? Two instances, 2 percent, in which Initial Report was not issued within 60 working days of the exit conference. ? One instance, or 1 percent, in which the Division of Monitoring did not receive a response from a subrecipient in regards to the Initial Finding Letter, or the response was not received within 30 days of the receipt of the Initial Findings Letter. ? Three instances, or 2 percent, in which auditor could not verify clearance or resolution of monitoring findings. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect MDHS programmatic funding divisions rely upon DM monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subreceipients in an effective manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring. We also recommend the agency ensure subgrants are monitored timely and that the "Report of Findings & Recommendations" prepared as a result of the on-site monitoring be issued in a timely manner to enable immediate corrective action procedures to be initiated. Additionally, we recommend that the agency maintain all supporting monitoring tools, reports, and correspondence in the monitoring file. Repeat Finding Yes, 2021-013; 2020-030 in 2020; 2019-042 in 2019; 2018-046 in 2018; 2017-037. Statistically Valid No.
SUBRECIPIENT MONITORING Material Weakness Material Noncompliance 2022-017 Strengthen Controls over On-Site Monitoring for the Low Income Home Energy Assistance Program (LIHEAP). ALN Number 93.568 Low Income Home Energy Assistance (LIHEAP) Federal Award No. G2001MSLIE4 2001MSE5C3 G2101MSLIEAR Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The terms and conditions of the grant agreements between the Mississippi Department of Human Services (MDHS) and the U.S. Department of Health and Human Services require MDHS to administer grants in compliance with the Code of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr Part 200.331) designates MDHS as a pass through entity to properly identify subgrant requirements to subrecipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subrecipients as necessary to ensure that subgrants are used for authorized purposes, complies with the terms and conditions of the subgrants and achieves performance goals. The auditor evaluated the Mississippi Department of Human Services' (MDHS's) compliance with subrecipient monitoring requirements based on written policies and procedures designed by MDHS's Office of Compliance - Division of Monitoring (DM) to satisfy during-the-award monitoring requirements. DM procedures require: an on-site monitoring review of each subrecipient contract at least once during the subgrant period. Monitoring tools/checklists are used during each on-site monitoring review to provide guidance and to document a review was performed. The on-site monitoring workpapers are reviewed and approved by DM supervisory personnel prior to issuance of a written report, the Initial Report of Findings & Recommendations, which is used for communicating finding(s) and/or questioned costs to subrecipients. The written report should be issued within 60 days from the date of the exit conference, which is normally held on the last day of the on-site review. Additionally, if the initial report identifies any administrative findings or questioned costs, a response to the findings is required to be submitted by the subrecipient to DM within thirty (30) working days from the date the report was issued. Additionally, The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Manual specifies that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that: the agency perform appropriate multi-level reviews over the monitoring process and the agency ensures timely communication from the subgrantees and timely resolution of findings in order to prevent; detect; and deter fraud, waste, and abuse or the misuse of federal funds. Condition When performing testwork over subrecipient on-site monitoring for 123 subgrant contracts during state fiscal year 2021, we noted the following exceptions: ? Four instances, or 3 percent, in which the Supervisor's Checklist was not included for Subrecipient on the FY 2021 Monitoring Reviews Smartsheet; therefore, auditor could not verify Supervisory Review of the Monitoring process. ? Two instances, 2 percent, in which Initial Report was not issued within 60 working days of the exit conference. ? One instance, or 1 percent, in which the Division of Monitoring did not receive a response from a subrecipient in regards to the Initial Finding Letter, or the response was not received within 30 days of the receipt of the Initial Findings Letter. ? Three instances, or 2 percent, in which auditor could not verify clearance or resolution of monitoring findings. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect MDHS programmatic funding divisions rely upon DM monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subreceipients in an effective manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring. We also recommend the agency ensure subgrants are monitored timely and that the "Report of Findings & Recommendations" prepared as a result of the on-site monitoring be issued in a timely manner to enable immediate corrective action procedures to be initiated. Additionally, we recommend that the agency maintain all supporting monitoring tools, reports, and correspondence in the monitoring file. Repeat Finding Yes, 2021-013; 2020-030 in 2020; 2019-042 in 2019; 2018-046 in 2018; 2017-037. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
SUBRECIPIENT MONITORING The Department?s internal control structure does not ensure all subrecipients are monitored in accordance with federal requirements. Criteria: All pass-through entities must monitor subrecipients 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 (2 CFR 200.332(d) through (f)). A pass-through entity (PTE) is responsible for: During-the-Award Monitoring ? Monitoring the activities of the subrecipient (through reporting, site visits, regular contact or other means) 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)). 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. The PTE must verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR section 200.501 (2 CFR section 200.332(f)). Federal award recipients must determine whether each agreement entered into for the disbursement of federal program funds casts the entity receiving the funds in the role of a subrecipient or a contractor based on the following definitions (2 CFR 200.331): ? A subrecipient receives federal funds from a non-federal entity to carry out part of a federal program. The legal agreement between the two parties creates a federal assistance relationship commonly known as a sub-award. ? A contractor is an entity (dealer, distributor, merchant or other seller) who has a legal agreement with a non-federal entity to provide goods and services needed to carry out the program under the federal award. Condition: RIDOT passes federal awards through to many organization types, including municipalities, non-profits, and colleges/universities. The Department did not have documentation supporting the monitoring of three subrecipients, two of which are non-profits and one of which is a university. The Department did not review the audit reports for six subrecipients or have any documentation supporting its determination as to whether the subrecipients were required to have an audit as required by 2 CFR 200 subpart F. RIDOT identified three vendors providing goods or services to the department as subrecipients. Cause: Policies, procedures and established controls do not encompass all federal requirements. Effect: Monitoring controls and procedures may be insufficient to ensure that subrecipients are complying with applicable program regulations and requirements. Questioned Costs: None Valid Statistical Sample: Not Applicable RECOMMENDATION 2022-050 Enhance policies, procedures, and controls over subrecipient monitoring to ensure compliance with 2 CFR sections 200.332(d) through (f).
SUBRECIPIENT MONITORING The Department?s internal control structure does not ensure all subrecipients are monitored in accordance with federal requirements. Criteria: All pass-through entities must monitor subrecipients 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 (2 CFR 200.332(d) through (f)). A pass-through entity (PTE) is responsible for: During-the-Award Monitoring ? Monitoring the activities of the subrecipient (through reporting, site visits, regular contact or other means) 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)). 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. The PTE must verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR section 200.501 (2 CFR section 200.332(f)). Federal award recipients must determine whether each agreement entered into for the disbursement of federal program funds casts the entity receiving the funds in the role of a subrecipient or a contractor based on the following definitions (2 CFR 200.331): ? A subrecipient receives federal funds from a non-federal entity to carry out part of a federal program. The legal agreement between the two parties creates a federal assistance relationship commonly known as a sub-award. ? A contractor is an entity (dealer, distributor, merchant or other seller) who has a legal agreement with a non-federal entity to provide goods and services needed to carry out the program under the federal award. Condition: RIDOT passes federal awards through to many organization types, including municipalities, non-profits, and colleges/universities. The Department did not have documentation supporting the monitoring of three subrecipients, two of which are non-profits and one of which is a university. The Department did not review the audit reports for six subrecipients or have any documentation supporting its determination as to whether the subrecipients were required to have an audit as required by 2 CFR 200 subpart F. RIDOT identified three vendors providing goods or services to the department as subrecipients. Cause: Policies, procedures and established controls do not encompass all federal requirements. Effect: Monitoring controls and procedures may be insufficient to ensure that subrecipients are complying with applicable program regulations and requirements. Questioned Costs: None Valid Statistical Sample: Not Applicable RECOMMENDATION 2022-050 Enhance policies, procedures, and controls over subrecipient monitoring to ensure compliance with 2 CFR sections 200.332(d) through (f).
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.