Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 200.331, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 200.331, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 200.331, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23 Type of Finding: Subrecipient Monitoring/Procurement • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per 2 CFR Part 200.331, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection. Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors. Questioned costs: $62,857 In known questioned costs. Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants. Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines. Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds. Repeat Finding: No Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance). Views of responsible officials: There is no disagreement with the audit finding.
Finding No.: 2022-023 Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Criteria: In accordance with applicable subrecipient requirements, a pass-through entity must: 1. Clearly identify to the subrecipient the award as a subaward by providing the ALN (Assistance Listings Number) and name. 2. Include the total amount provided to subrecipients from each Federal program. 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes the verification that subrecipients expected to be audited as required by 2 CFR 200, subpart F, met the audit requirements. Condition: For the year ended September 30, 2022, GovGuam reported $195.6 million in total program expenditures in the Schedule of Federal Awards (SEFA). A total of $104M represents amounts passed through to GovGuam line agencies and component units, . Of this amount, approximately $48.9 million represents payments for various programs administered by Guam Economic Development Authority (GEDA). Only $55.1 million was identified as amounts passed through to GovGuam line agencies and component units in the final SEFA, which did not include the amounts administered by GEDA. According to Executive Order No. 2021-22, dated September 7, 2021, “GEDA is appointed to serve as the Program processor for Guam, subject to continued monitoring and oversight by the Office of the Governor. The Administrator of GEDA shall serve as the official responsible for overseeing GEDA’s fulfillment of the Program, which includes the following items:…[(]i[)].. Implementing the Program, inclusive of drafting the application, standard operating procedures (SOP), and other relevant documentation. [(]ii.[)] Receiving and reviewing applications and submitting payment requests to the Department of Administration for disbursement to eligible small businesses.” Government of Guam Schedule of Findings and Questioned Costs, continued 77 Finding No.: 2022-023, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Condition, continued: Similar language is documented in other executive orders, describing GEDA as the administrator of various programs funded by ALN 21.027 and describing GEDA’s responsibility to make eligibility determinations. Therefore, GEDA meets the definition of a subrecipient, and amounts administered by GEDA should be reported in the SEFA as amounts passed through to subrecipients. Cause: GovGuam did not properly identify amounts passed through to subrecipients and did not enforce compliance with applicable subrecipient monitoring requirements. The Department of Administration believes that GEDA is not a subrecipient. Effect: GovGuam is in noncompliance with applicable subrecipient monitoring requirements. No questioned cost is reported because GEDA is undergoing a Single Audit for FY 2022. Identification as a Repeat Finding: Finding 2021-021 Recommendation: GovGuam should enforce compliance with applicable subrecipient monitoring requirements. Responsible personnel should monitor subrecipients for compliance with Single Audit Act requirements. Also, GovGuam should consider seeking guidance and confirmation from the Grantor Agency regarding the classification of GEDA as either a subrecipient or a contractor. Government of Guam Schedule of Findings and Questioned Costs, continued 78 Finding No.: 2022-023, continued Federal Agency: U.S. Department of The Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Section 9901 of the American Rescue Plan Act of 2021 Area: Subrecipient Monitoring Questioned Costs: $0 Views of Responsible Officials: As for Fiscal Year 2022, payments to beneficiaries under the GEDA program were made directly by DOA. GEDA was not in receipt of any funds and by that plain language cannot be considered a subrecipient. DOA determined in accordance with 2CFR 200.331 that GEDA was not a Subrecipient: Auditors may, but have not to date, requested access to GEDA and DOA records for verification eligibility. CFR§200.331 reads: “(c) Use of judgment in making a determination. In determining whether an agreement between a pass-through entity and another non-federal entity cast the latter as a Subrecipient or a contractor, the substance of the relations is more important than the form of the agreement. All the characteristics listed above may not be present in all cases, and the pass-through entity must use judgement in classifying each agreement as a subaward or a procurement contract.” Auditor Response: DOA’s determination differs from our judgement in classifying the agreement with GEDA. CFR§200.331 also reads: “ (a) Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient…. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity: (1) Determines who is eligible to receive what Federal assistance;… .” The substance of the relations is for GEDA to carry out a key portion of the Federal award by determining who is eligible to receive Federal assistance, as well as how much each beneficiary should receive, which is more important than the form of the agreement for DOA to act as a financial institution in writing the check. Therefore, GEDA meets the definition of a subrecipient, which is consistent with the fact that GovGuam did not subject the selection of GEDA to a procurement process. Examination by auditors of GEDA’s records as to beneficiary eligibility is not required because the compliance requirement of eligibility is not subject to audit per the OMB Compliance Supplement. Moreover, such eligibility tests would not address this finding relative to subrecipient monitoring. There is no evidence that DOA monitored GEDA’s eligibility determinations for FY 2022.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
Finding No. 2022-002: Inadequate Subrecipient Management Federal Assistance Listing Program Title and Number: Continuum of Care Program 14.267 (?CoC?) Federal Agency: U.S. Department of Housing and Urban Development Criteria: 2 CFR Section 200.331 Requirements for pass through entities and Section 570.503 Agreements with Subrecipients. Condition: Subrecipient award agreements did not include all regulatory requirements and citations. Cause: Subrecipient management documents need strengthening. Effect: The subrecipient award agreements lack accurate and accessible information to ensure that the subrecipients have adequate guidance to implement their programs in compliance with CoC regulations. Questioned Costs: None Context: The Organization has various policies and procedures available to its subrecipients, however these policies and procedures are not centralized and difficult to locate.
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.