Finding 2021-009 Program: Office for Coastal Management Federal Financial Assistance Listing: 11.473 Federal Grantor: U.S. Department of Commerce Passed-through: National Fish and Wildlife Foundation Award No. and Year: 0318.19.070225 (2020) Compliance Requirements: Subrecipient Monitoring and Matching Type of Finding: Material Non-Compliance/Material Weakness Criteria: 2 CFR 200.303(a) - establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 200.331(b) - Requirements for Pass-Through Entities, states that all pass-through entities must assess the subrecipient’s risk of non-compliance with federal statutes, regulations, and terms and conditions of the subaward. 2 CFR 200.331(d) - establishes that the auditee must follow up and ensure subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided from the Pass Through Entity (PTE) detected through audits. 2 CFR 200.332(d) - establishes that the auditee must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. As part of monitoring the subrecipients, since there is a matching requirement within the grant, the CFSC’s procedures should monitor and ensure the subrecipients are complying the required match arrangements outlined in the subaward agreements. Condition: CFSC did not perform risk assessment for all subrecipients selected for testing. CFSC was unable to provide supporting documentation to show that they inquired with the subrecipients about any audits they had undergone or evidence that CFSC received and reviewed audit reports to ensure timely follow ups were made if any findings pertaining to the Federal Award was noted. Monitoring of matching is not done each time expenditures are incurred by a subrecipient, which increases the risk that a subrecipient may not incur the required match costs before the end of the grant period. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was not used. We selected all three subrecipients for testing. The condition noted above was identified during our procedures over CFSC’s subrecipient monitoring provisions. Repeat Finding from Prior Year: Yes –2020-001 Effect: CFSC did not perform the following, which increases the risk of noncompliance: • Required risk assessments for the subrecipients, • Review subrecipient audit reports to ensure compliance with Federal Awards or make any necessary follow-ups pertaining to any findings noted, if any. • Ensure match expenditures are incurred throughout the duration of the grant period, which increases risk that CFSC may not meet its matching requirements through its subrecipients. Cause: CFSC’s procedures did not consistently ensure that the required risk assessments, monitoring, matching through subrecipients, or subrecipient follow-up were performed. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that all required risk assessments are performed in accordance with the criteria outlined above. Views of Responsible Officials and Planned Corrective Actions: See Separate Corrective Action Plan.
Finding 2021-006: Subrecipient Monitoring Federal Programs: Research and Development Cluster: 47.076 - STEM +C Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our audit work over subrecipient monitoring, we were unable to verify that pre-award risk assessment procedures were performed. It is our understanding that AAPT has ongoing relationships with these subrecipients and evaluation of these subrecipients' risk is a continual process; however, these procedures were not documented. Cause: AAPT’s internal policies and procedures governing risk assessment on subrecipient was not performed. Effect or Potential Effect: AAPT could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures consisted of examining documentation of the subrecipient monitoring process, and evaluating internal controls over the process. Identification as a Repeat Finding, if Applicable: 2020-006. Recommendation: We recommend AAPT follow their internal policies and procedures surrounding subrecipients and document the risk assessment criteria for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.). Views of Responsible Officials and Planned Corrective Actions: Management will continue to perform risk assessment procedures and will thoroughly document the processes and evaluations. Anticipated Completion Date: 12/31/2022 Responsible Official: Michael Brosnan, CFO
Finding 2021-006: Subrecipient Monitoring Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1640791 (9/15/2016 – 8/31/2022) Significant Deficiency in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our audit work over subrecipient monitoring, we were unable to verify that pre-award risk assessment procedures were performed. It is our understanding that AAPT has ongoing relationships with these subrecipients and evaluation of these subrecipients' risk is a continual process; however, these procedures were not documented. Cause: AAPT’s internal policies and procedures governing risk assessment on subrecipient was not performed. Effect or Potential Effect: AAPT could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures consisted of examining documentation of the subrecipient monitoring process, and evaluating internal controls over the process. Identification as a Repeat Finding, if Applicable: 2020-006. Recommendation: We recommend AAPT follow their internal policies and procedures surrounding subrecipients and document the risk assessment criteria for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.). Views of Responsible Officials and Planned Corrective Actions: Management will continue to perform risk assessment procedures and will thoroughly document the processes and evaluations. Anticipated Completion Date: 12/31/2022 Responsible Official: Michael Brosnan, CFO
2021-005 – SUBRECIPIENT MONITORING – SUBAWARD AGREEMENTS Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Subrecipient agreements must make the subrecipient aware of the award information required by 2 CFR section 200.331(a): (1) Determines who is eligible to receive what Federal assistance; (2) Has its performance measured in relation to whether objectives of a Federal program were met; (3) Has responsibility for programmatic decision-making; (4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and (5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity. Furthermore, DoDGAR’s Appendix B Part 22 requires agreements make the subrecipient aware of federal provisions related to Nondiscrimination; Debarment and Suspension; Hatch Act; Environmental Standards; Drug-Free Workplace and other federal regulations. Condition: Standard Subrecipient agreements did not make reference to certain provisions which are required to be contained in the agreement. Questioned Costs: Not applicable. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) 2021-005 – SUBRECIPIENT MONITORING – SUBAWARD AGREEMENTS (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Context: There were twelve Subrecipient agreements executed during the year under the federal award with total expenditures of $2,086,200. Total federal expenditures listed on the Schedule of Federal Awards was $6,267,848. Cause: Internal controls and procedures related to Subrecipient monitoring requirements were not effectively designed or performed. Effect: The National Center for the Advancement of STEM Education, Inc. did not adequately include certain necessary language in the executed agreements to properly comply with Subrecipient monitoring. Recommendation: Management should establish proper policies and procedures which ensure Subrecipient agreements comply with applicable federal guidelines. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
Finding 2021-004 Noncompliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Finding 2021-005 Noncompliance with Eligibility Compliance Requirements: • Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Per 2 CFR 200.303, the auditee must establish and maintain effective internal control over federal awards and Per 2 CFR 200.403, costs must be necessary, reasonable, allocable, and authorized consistent with policies and procedures that apply uniformly to both federally financed and other activities. The costs must also occur during the proper grant period of performance. • Eligibility – Per 2 CFR 200.303 and 2 CFR 200.331, the auditee must establish and maintain internal controls to ensure that only eligible individuals, organizations, or activities receive assistance under federal awards. Criteria: An effective system of internal control over compliance requires that expenditures charged to federal awards be supported by adequate documentation and approvals to demonstrate that: • Costs are necessary, reasonable, allocable, and allowable under program requirements, and recorded properly and in the correct period. • Expenditures are for activities permitted under the terms and conditions of the award. • Expenditures are reviewed and monitored. • Participants or beneficiaries meet eligibility requirements. Condition: During our testing of expenditures and program activity for the federal program, we identified multiple instances in which transactions lacked adequate supporting documentation to demonstrate compliance with the above requirements. Specifically: • CSBG – ALN 93.569: Of the sixty expense transactions tested over CSBG, three did not have corresponding support or documentation to verify they were allowable activities, allowable costs, and they were recognized in the correct period. Specifically, invoices, purchase orders, or timesheets were missing, incomplete, or did not adequately substantiate the expenditures charged to the federal award. • During our testing, we identified an instance where 1 transaction was processed without proper documented approvals - 1 transaction totaling $842.40 • During testing of participant files over CSBG, we noted that 15 out of 60 client files could not be located, which did not allow us to properly determine if these participants were in fact eligible to be served under this program. Cause: The lack of documentation was primarily due to inadequate internal control procedures over record retention and verification. Additionally, there was significant turnover which contributed to inconsistent documentation practices. Effect or Potential Effect: Without sufficient supporting documentation and approvals, the Organization cannot demonstrate that: • Expenditures were for allowable activities. • Costs charged were necessary, reasonable, and allocable and recorded in the proper period. • Costs are reviewed and monitored. • Participants or beneficiaries met eligibility requirements. Questioned costs: Due to insufficient documentation, the amount of questioned costs could not be determined. Recommendation: We recommend the Organization strengthen its compliance-related internal controls by: • Requiring standardized documentation to support compliance with each requirement. • Implementing periodic reviews of documentation completeness before charging costs to federal awards. • Providing training to staff responsible for grant management on compliance and record retention requirements. • Retain all documentation related to federal awards in a central location. • Reinforcing the approval process by documenting and communicating approval requirements to all staff involved in initiating and processing transactions, providing mandatory training to employees on expense authorization policies, and establishing monitoring procedures to ensure approvals are consistently documented before transactions are processed. Views of responsible officials: Management agrees with the finding and the recommendation. Corrective action plan: See Management’s Corrective Action Plan (Unaudited).
Finding 2021-004 Noncompliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Finding 2021-005 Noncompliance with Eligibility Compliance Requirements: • Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Per 2 CFR 200.303, the auditee must establish and maintain effective internal control over federal awards and Per 2 CFR 200.403, costs must be necessary, reasonable, allocable, and authorized consistent with policies and procedures that apply uniformly to both federally financed and other activities. The costs must also occur during the proper grant period of performance. • Eligibility – Per 2 CFR 200.303 and 2 CFR 200.331, the auditee must establish and maintain internal controls to ensure that only eligible individuals, organizations, or activities receive assistance under federal awards. Criteria: An effective system of internal control over compliance requires that expenditures charged to federal awards be supported by adequate documentation and approvals to demonstrate that: • Costs are necessary, reasonable, allocable, and allowable under program requirements, and recorded properly and in the correct period. • Expenditures are for activities permitted under the terms and conditions of the award. • Expenditures are reviewed and monitored. • Participants or beneficiaries meet eligibility requirements. Condition: During our testing of expenditures and program activity for the federal program, we identified multiple instances in which transactions lacked adequate supporting documentation to demonstrate compliance with the above requirements. Specifically: • CSBG – ALN 93.569: Of the sixty expense transactions tested over CSBG, three did not have corresponding support or documentation to verify they were allowable activities, allowable costs, and they were recognized in the correct period. Specifically, invoices, purchase orders, or timesheets were missing, incomplete, or did not adequately substantiate the expenditures charged to the federal award. • During our testing, we identified an instance where 1 transaction was processed without proper documented approvals - 1 transaction totaling $842.40 • During testing of participant files over CSBG, we noted that 15 out of 60 client files could not be located, which did not allow us to properly determine if these participants were in fact eligible to be served under this program. Cause: The lack of documentation was primarily due to inadequate internal control procedures over record retention and verification. Additionally, there was significant turnover which contributed to inconsistent documentation practices. Effect or Potential Effect: Without sufficient supporting documentation and approvals, the Organization cannot demonstrate that: • Expenditures were for allowable activities. • Costs charged were necessary, reasonable, and allocable and recorded in the proper period. • Costs are reviewed and monitored. • Participants or beneficiaries met eligibility requirements. Questioned costs: Due to insufficient documentation, the amount of questioned costs could not be determined. Recommendation: We recommend the Organization strengthen its compliance-related internal controls by: • Requiring standardized documentation to support compliance with each requirement. • Implementing periodic reviews of documentation completeness before charging costs to federal awards. • Providing training to staff responsible for grant management on compliance and record retention requirements. • Retain all documentation related to federal awards in a central location. • Reinforcing the approval process by documenting and communicating approval requirements to all staff involved in initiating and processing transactions, providing mandatory training to employees on expense authorization policies, and establishing monitoring procedures to ensure approvals are consistently documented before transactions are processed. Views of responsible officials: Management agrees with the finding and the recommendation. Corrective action plan: See Management’s Corrective Action Plan (Unaudited).
Finding 2021-006 Noncompliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Finding 2021-007 Noncompliance with Eligibility Compliance Requirements: • Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Per 2 CFR 200.303, the auditee must establish and maintain effective internal control over federal awards and Per 2 CFR 200.403, costs must be necessary, reasonable, allocable, and authorized consistent with policies and procedures that apply uniformly to both federally financed and other activities. The costs must also occur during the proper grant period of performance. • Eligibility – Per 2 CFR 200.303 and 2 CFR 200.331, the auditee must establish and maintain internal controls to ensure that only eligible individuals, organizations, or activities receive assistance under federal awards. Criteria: An effective system of internal control over compliance requires that expenditures charged to federal awards be supported by adequate documentation to demonstrate that: • Costs are necessary, reasonable, allocable, and allowable under program requirements and recorded in the proper period. • Expenditures are for activities permitted under the terms and conditions of the award and recorded properly. • Expenditures are reviewed and monitored. • Participants or beneficiaries meet eligibility requirements. Condition: During our testing of expenditures and program activity for the federal program, we identified multiple instances in which transactions lacked adequate supporting documentation to demonstrate compliance with the above requirements. Specifically: • TANF – ALN 93.558: Of the sixty expense transactions tested over TANF, two did not have corresponding support or documentation to verify they were allowable activities and allowable costs. Specifically, invoices, purchase orders, or timesheets were missing, incomplete, or did not adequately substantiate the expenditures charged to the federal award in the proper period. • During our testing, we identified an instance where 8 transactions were processed without proper documented approvals - 8 transaction totaling $12,694.19 • During testing of participant files over TANF, we noted that five out of 60 client files could not be located, which did not allow us to properly determine if these participants were in fact eligible to be served under this program. Cause: The lack of documentation was primarily due to inadequate internal control procedures over record retention and verification. Additionally, there was significant turnover which contributed to inconsistent documentation practices. Effect or Potential Effect: Without sufficient supporting documentation, the Organization cannot demonstrate that: • Expenditures were for allowable activities. • Costs charged were necessary, reasonable, and allocable and recorded properly. • Expenditures were reviewed and monitored. • Participants or beneficiaries met eligibility requirements. Questioned costs: Due to insufficient documentation, the amount of questioned costs could not be determined. Recommendation: We recommend the Organization strengthen its compliance-related internal controls by: • Requiring standardized documentation to support compliance with each requirement. • Implementing periodic reviews of documentation completeness before charging costs to federal awards. • Providing training to staff responsible for grant management on compliance and record retention requirements. • Retain all documentation related to federal awards in a central location. • Reinforcing the approval process by documenting and communicating approval requirements to all staff involved in initiating and processing transactions, providing mandatory training to employees on expense authorization policies, and establishing monitoring procedures to ensure approvals are consistently documented before transactions are processed. Views of responsible officials: Management agrees with the finding and the recommendation. Corrective action plan: See Management’s Corrective Action Plan (Unaudited).
Finding 2021-006 Noncompliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Finding 2021-007 Noncompliance with Eligibility Compliance Requirements: • Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Per 2 CFR 200.303, the auditee must establish and maintain effective internal control over federal awards and Per 2 CFR 200.403, costs must be necessary, reasonable, allocable, and authorized consistent with policies and procedures that apply uniformly to both federally financed and other activities. The costs must also occur during the proper grant period of performance. • Eligibility – Per 2 CFR 200.303 and 2 CFR 200.331, the auditee must establish and maintain internal controls to ensure that only eligible individuals, organizations, or activities receive assistance under federal awards. Criteria: An effective system of internal control over compliance requires that expenditures charged to federal awards be supported by adequate documentation to demonstrate that: • Costs are necessary, reasonable, allocable, and allowable under program requirements and recorded in the proper period. • Expenditures are for activities permitted under the terms and conditions of the award and recorded properly. • Expenditures are reviewed and monitored. • Participants or beneficiaries meet eligibility requirements. Condition: During our testing of expenditures and program activity for the federal program, we identified multiple instances in which transactions lacked adequate supporting documentation to demonstrate compliance with the above requirements. Specifically: • TANF – ALN 93.558: Of the sixty expense transactions tested over TANF, two did not have corresponding support or documentation to verify they were allowable activities and allowable costs. Specifically, invoices, purchase orders, or timesheets were missing, incomplete, or did not adequately substantiate the expenditures charged to the federal award in the proper period. • During our testing, we identified an instance where 8 transactions were processed without proper documented approvals - 8 transaction totaling $12,694.19 • During testing of participant files over TANF, we noted that five out of 60 client files could not be located, which did not allow us to properly determine if these participants were in fact eligible to be served under this program. Cause: The lack of documentation was primarily due to inadequate internal control procedures over record retention and verification. Additionally, there was significant turnover which contributed to inconsistent documentation practices. Effect or Potential Effect: Without sufficient supporting documentation, the Organization cannot demonstrate that: • Expenditures were for allowable activities. • Costs charged were necessary, reasonable, and allocable and recorded properly. • Expenditures were reviewed and monitored. • Participants or beneficiaries met eligibility requirements. Questioned costs: Due to insufficient documentation, the amount of questioned costs could not be determined. Recommendation: We recommend the Organization strengthen its compliance-related internal controls by: • Requiring standardized documentation to support compliance with each requirement. • Implementing periodic reviews of documentation completeness before charging costs to federal awards. • Providing training to staff responsible for grant management on compliance and record retention requirements. • Retain all documentation related to federal awards in a central location. • Reinforcing the approval process by documenting and communicating approval requirements to all staff involved in initiating and processing transactions, providing mandatory training to employees on expense authorization policies, and establishing monitoring procedures to ensure approvals are consistently documented before transactions are processed. Views of responsible officials: Management agrees with the finding and the recommendation. Corrective action plan: See Management’s Corrective Action Plan (Unaudited).
Finding 2021-008 Noncompliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Finding 2021-009 Noncompliance with Eligibility Compliance Requirements: • Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Per 2 CFR 200.303, the auditee must establish and maintain effective internal control over federal awards and per 2 CFR 200.403, costs must be necessary, reasonable, allocable, and authorized consistent with policies and procedures that apply uniformly to both federally financed and other activities. The costs must also occur during the proper grant period of performance. • Eligibility – Per 2 CFR 200.303 and 2 CFR 200.331, the auditee must establish and maintain internal controls to ensure that only eligible individuals, organizations, or activities receive assistance under federal awards. Criteria: An effective system of internal control over compliance requires that expenditures charged to federal awards be supported by adequate documentation to demonstrate that: • Costs are necessary, reasonable, allocable, and allowable under program requirements. • Expenditures are for activities permitted under the terms and conditions of the award and recorded properly. • Participants or beneficiaries meet eligibility requirements. Condition: During our testing of expenditures and program activity for the federal program, we identified multiple instances in which transactions lacked adequate supporting documentation to demonstrate compliance with the above requirements. Specifically: • SSVF – ALN 64.033: Of the sixty expense transactions tested over SSVF, four did not have corresponding support or documentation to verify they were allowable activities, allowable costs, and recognized in the correct period. Specifically, invoices, purchase orders, or timesheets were missing, incomplete, or did not adequately substantiate the expenditures charged to the federal award. During testing of SSVF participant files, we noted that 13 out of 60 client files could not be located or were missing required documentation within their file, which did not allow us to properly determine if these participants were in fact eligible to be served under this program. Cause: The lack of documentation was primarily due to inadequate internal control procedures over record retention and verification. Additionally, there was significant turnover which contributed to inconsistent documentation practices. Effect or Potential Effect: Without sufficient supporting documentation, the Organization cannot demonstrate that: • Expenditures were for allowable activities. • Costs charged were necessary, reasonable, and allocable and recorded properly. • Participants or beneficiaries met eligibility requirements. Questioned costs: Due to insufficient documentation, the amount of questioned costs could not be determined. Recommendation: We recommend the Organization strengthen its compliance-related internal controls by: • Requiring standardized documentation to support compliance with each requirement. • Implementing periodic reviews of documentation completeness before charging costs to federal awards. • Providing training to staff responsible for grant management on compliance and record retention requirements. • Retain all documentation related to federal awards in a central location. Views of responsible officials: Management agrees with the finding and the recommendation. Corrective action plan: See Management’s Corrective Action Plan (Unaudited).
Finding 2021-008 Noncompliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Finding 2021-009 Noncompliance with Eligibility Compliance Requirements: • Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Per 2 CFR 200.303, the auditee must establish and maintain effective internal control over federal awards and per 2 CFR 200.403, costs must be necessary, reasonable, allocable, and authorized consistent with policies and procedures that apply uniformly to both federally financed and other activities. The costs must also occur during the proper grant period of performance. • Eligibility – Per 2 CFR 200.303 and 2 CFR 200.331, the auditee must establish and maintain internal controls to ensure that only eligible individuals, organizations, or activities receive assistance under federal awards. Criteria: An effective system of internal control over compliance requires that expenditures charged to federal awards be supported by adequate documentation to demonstrate that: • Costs are necessary, reasonable, allocable, and allowable under program requirements. • Expenditures are for activities permitted under the terms and conditions of the award and recorded properly. • Participants or beneficiaries meet eligibility requirements. Condition: During our testing of expenditures and program activity for the federal program, we identified multiple instances in which transactions lacked adequate supporting documentation to demonstrate compliance with the above requirements. Specifically: • SSVF – ALN 64.033: Of the sixty expense transactions tested over SSVF, four did not have corresponding support or documentation to verify they were allowable activities, allowable costs, and recognized in the correct period. Specifically, invoices, purchase orders, or timesheets were missing, incomplete, or did not adequately substantiate the expenditures charged to the federal award. During testing of SSVF participant files, we noted that 13 out of 60 client files could not be located or were missing required documentation within their file, which did not allow us to properly determine if these participants were in fact eligible to be served under this program. Cause: The lack of documentation was primarily due to inadequate internal control procedures over record retention and verification. Additionally, there was significant turnover which contributed to inconsistent documentation practices. Effect or Potential Effect: Without sufficient supporting documentation, the Organization cannot demonstrate that: • Expenditures were for allowable activities. • Costs charged were necessary, reasonable, and allocable and recorded properly. • Participants or beneficiaries met eligibility requirements. Questioned costs: Due to insufficient documentation, the amount of questioned costs could not be determined. Recommendation: We recommend the Organization strengthen its compliance-related internal controls by: • Requiring standardized documentation to support compliance with each requirement. • Implementing periodic reviews of documentation completeness before charging costs to federal awards. • Providing training to staff responsible for grant management on compliance and record retention requirements. • Retain all documentation related to federal awards in a central location. Views of responsible officials: Management agrees with the finding and the recommendation. Corrective action plan: See Management’s Corrective Action Plan (Unaudited).
Finding 2020-006: Subrecipient Monitoring Federal Programs: Research and Development Cluster: 47.076 - STEM +C Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our audit work over subrecipient monitoring, we were unable to verify that pre-award risk assessment procedures were performed. It is our understanding that AAPT has ongoing relationships with these subrecipients and evaluation of these subrecipients' risk is a continual process; however, these procedures were not documented. Cause: AAPT’s internal policies and procedures governing risk assessment on subrecipient was not performed. Effect or Potential Effect: AAPT could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures consisted of examining documentation of the subrecipient monitoring process, and evaluating internal controls over the process. Identification as a Repeat Finding, if Applicable: 2019-005. Recommendation: We recommend AAPT follow their internal policies and procedures surrounding subrecipients and document the risk assessment criteria for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.). Views of Responsible Officials and Planned Corrective Actions: Management will continue to perform risk assessment procedures and will thoroughly document the processes and evaluations. Anticipated Completion Date: 12/17/2021 Responsible Official: Michael Brosnan, CFO
Finding 2020-006: Subrecipient Monitoring Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1640791 (9/15/2016 – 8/31/2022) Significant Deficiency in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our audit work over subrecipient monitoring, we were unable to verify that pre-award risk assessment procedures were performed. It is our understanding that AAPT has ongoing relationships with these subrecipients and evaluation of these subrecipients' risk is a continual process; however, these procedures were not documented. Cause: AAPT’s internal policies and procedures governing risk assessment on subrecipient was not performed. Effect or Potential Effect: AAPT could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures consisted of examining documentation of the subrecipient monitoring process, and evaluating internal controls over the process. Identification as a Repeat Finding, if Applicable: 2019-005. Recommendation: We recommend AAPT follow their internal policies and procedures surrounding subrecipients and document the risk assessment criteria for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.). Views of Responsible Officials and Planned Corrective Actions: Management will continue to perform risk assessment procedures and will thoroughly document the processes and evaluations. Anticipated Completion Date: 12/31/2022 Responsible Official: Michael Brosnan, CFO
Finding 2020-006: Subrecipient Monitoring Federal Programs: Research and Development Cluster: 47.076 - STEM +C Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our audit work over subrecipient monitoring, we were unable to verify that pre-award risk assessment procedures were performed. It is our understanding that AAPT has ongoing relationships with these subrecipients and evaluation of these subrecipients' risk is a continual process; however, these procedures were not documented. Cause: AAPT’s internal policies and procedures governing risk assessment on subrecipient was not performed. Effect or Potential Effect: AAPT could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures consisted of examining documentation of the subrecipient monitoring process, and evaluating internal controls over the process. Identification as a Repeat Finding, if Applicable: 2019-005. Recommendation: We recommend AAPT follow their internal policies and procedures surrounding subrecipients and document the risk assessment criteria for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.). Views of Responsible Officials and Planned Corrective Actions: Management will continue to perform risk assessment procedures and will thoroughly document the processes and evaluations. Anticipated Completion Date: 12/17/2021 Responsible Official: Michael Brosnan, CFO
Finding 2020-006: Subrecipient Monitoring Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1640791 (9/15/2016 – 8/31/2022) Significant Deficiency in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our audit work over subrecipient monitoring, we were unable to verify that pre-award risk assessment procedures were performed. It is our understanding that AAPT has ongoing relationships with these subrecipients and evaluation of these subrecipients' risk is a continual process; however, these procedures were not documented. Cause: AAPT’s internal policies and procedures governing risk assessment on subrecipient was not performed. Effect or Potential Effect: AAPT could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures consisted of examining documentation of the subrecipient monitoring process, and evaluating internal controls over the process. Identification as a Repeat Finding, if Applicable: 2019-005. Recommendation: We recommend AAPT follow their internal policies and procedures surrounding subrecipients and document the risk assessment criteria for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.). Views of Responsible Officials and Planned Corrective Actions: Management will continue to perform risk assessment procedures and will thoroughly document the processes and evaluations. Anticipated Completion Date: 12/31/2022 Responsible Official: Michael Brosnan, CFO
Federal Program Information Federal Agency: National Endowment for the Arts Award Name(s): Promotion of the Arts Partnership Agreements Assistance Listing Number(s): 45.025 Award Year: 2020 Compliance Requirement: Subrecipient Monitoring Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information as required in 2 CFR 200.331(a). Additionally, a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward as required in 2 CFR 200.331(b). Condition and Context During our audit, we tested a sample of 16 of 105 subrecipients to determine if the subrecipient agreements contained all required elements per 2 CFR 200.331(a) and ensure sufficient evaluation of the subrecipient’s risk of noncompliance was performed. As a result of our testing, it was identified that the agreements tested did not contain the subrecipient’s unique entity identifier, federal award identification number, federal award date, and federal award project description. Additionally, the Organization did not perform an evaluation of the subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring. Cause The Organization did not have adequate controls in place to ensure all required elements were included in subrecipient agreements or to evaluate risk of subrecipient’s noncompliance. Effect or Potential Effect Due to the weakness in internal controls and compliance finding noted above, the Organization did not comply with the requirements of the Uniform Guidance regarding communication to subrecipients all the specified elements in 2 CFR 200.331. This impacts the subrecipients’ ability to properly identify federal funding. No questioned costs are reported as this requirement is administrative in nature. Recommendation The Organization should update its subrecipient agreements, policies, and procedures to ensure inclusion of all required elements and implement risk assessment procedures to comply with the Uniform Guidance. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19- MC-42-0018 Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions Type of Finding: Material weakness in internal control over major program; Noncompliance Criteria: Section 2 CFR 200.331 of the Uniform Guidance states that pass-thru entities must evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. This evaluation may include, but is not limited to, (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a single audit and the extent to which the same or similar subaward has been audited as a major program; and (3) Whether the subrecipient has new personnel or new or substantially changed systems. Based on the results of the evaluation, the City would then have to consider the extent to which monitoring procedures are required. At a minimum, the City must, (1) Review financial and performance reports required by the City, (2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the City detected through audits, on-site reviews, and other means, and (3) Issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the City as required by Section 200.521 of the Uniform Guidance. Additionally, the City must perform monitoring visits as stipulated in the contracts between the City and the subrecipients. Condition: The City does not have policies and procedures in place to perform the required risk assessment of subrecipients to determine the extent of monitoring procedures, and then perform and document the monitoring procedures performed. Cause: There is no documentation of any subrecipient risk assessment being performed for grants provided to subrecipients for 2019, and only partial documentation of any subrecipient monitoring procedures being performed. Effect: Subrecipient monitoring procedures were not properly performed and documented by the City. Questioned costs: There are no questioned costs associated with this finding. Context: The City needs to create and implement a policy to perform risk assessment of subrecipients, in order to determine the extent of monitoring procedures and performance of the monitoring procedures themselves. Recommendation: We recommend the City implement procedures to ensure risk assessment of subrecipients prior to each subaward is performed in accordance with the Uniform Guidance requirements and thoroughly documented. We further recommend that the required subrecipient monitoring be performed and documented for each subaward.