Finding 2023-002: Sub-recipients Federal Program: Assistance Listing Number 19.124 Criteria: As noted in 2 CFR 200.331 part (d): Monitor the activities of the sub-recipient as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions for the sub-award; and that sub-award performance goals are achieved. Condition: During our audit, we noted that the Center does not have updated policies and procedures in place for monitoring sub-recipients to be in compliance with 2 CFR 200.331. We also noted the pre-award risk assessment procedures were not properly documented. Lastly, we noted the Center did not perform the FFATA (Federal Funding Accountability and Transparency Act) reporting requirements. Cause: The Center does not have updated policies and procedures in place to be in compliance with monitoring activities of their sub-recipients. During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Our audit procedures consisted of substantive testwork over a sample of sub-recipient expenditures. We consider our sample to representative of the population. Effect or Potential Effect: The Center could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: The Center failed to properly document its due diligence with respect to risk assessment procedures and FFATA reporting requirements. Identification as a Repeat Finding, if Applicable: 2022-001 Recommendation: As a result, we concluded that certain enhancements would add value to the Center’s due diligence with respect to its monitoring processes, and the following are our recommendations (of activities/documents that should be performed/maintained by the Center: - Enhance pre-award risk assessment; an evaluation and assignment of level of the financial (and programmatic) risk associated with the intended recipient/grantee for the purpose of determining the expected level of oversight and monitoring during the period of performance. - Enhance documentation of evidence of an evaluation process with respect to the identification of the prospective recipient. - A regularly documented review process with respect to periodic financial reports received from grantees. - An evaluation of the need for a periodic site visit. - Receipt of the grantee’s annual audit reports, if available (to ensure there are no weaknesses or deficiencies in internal control during the grant period). If there are deficiencies that directly affect the program, then a corrective action plan be established. - The Center will need to evaluate the FFATA reporting requirements and comply with the act.
Criteria: All pass-through entities must perform certain identification and monitoring procedures over subrecipients, including but not limited to the following: -A pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a federal subaward and includes the following specific required information: federal award identification information, all requirements imposed by the pass-through entity, any additional requirements to meet the pass-through entity’s responsibilities, information on the indirect cost rate, requirements to permit access to subrecipients’ records and statements, and appropriate closeout terms and conditions (2 CFR section 200.332). -A pass-through entity must ascertain that subrecipients expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement (2 CFR section 200.331(f)). This verification may be performed as part of the required monitoring under 2 CFR section 200.331(d)(2) to ensure that the subrecipient takes timely and appropriate action on deficiencies detected though audits. -When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. All non-procurement transactions entered into by a passthrough entity, including subawards to subrecipients, are considered covered transactions. Condition: The subaward agreements for the COVID-19 – Coronavirus State and Local Fiscal Recovery Funds did not include the required federal identification information per 2 CFR section 200.332. Additionally, there were no processes in place to ensure subrecipients were not suspended or debarred or to ensure the required review and follow up of subrecipient's audit findings was performed. Cause: Jewish Family and Children’s Service of Minneapolis was not aware of these responsibilities, and they were not outlined or clearly communicated in the original grant agreement. Effect: The conditions noted above resulted in noncompliance over subrecipient monitoring. Context: A sample of two subrecipients was selected for audit from a population of four. Questioned Costs: $0 Identification of Repeat Finding: The finding is not a repeat finding. Recommendation: Jewish Family and Children’s Service of Minneapolis should examine and update its subrecipient monitoring policies and ensure they conform to Uniform Guidance requirements and guidelines. Views of Responsible Officials and Planned Corrective Actions: Jewish Family and Children’s Service of Minneapolis agrees with the finding and is in the process of re-evaluating its subrecipient monitoring policies to include all requirements of the Uniform Guidance.
2023-004: Subrecipient Monitoring Criteria: The Code of Federal Regulations 2 CFR 200.332 states that all pass-through entities (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)). 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. Condition: The Organization did not clearly communicate the required federal award information and applicable requirements to the subrecipients. The Organization did not evaluate the risk of non-compliance of the subrecipients in order to identify the appropriate monitoring procedures. Statistical sampling was not used in making sample selections. Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that federal award monitoring compliance requirements are being met. Effect: The Organization did not perform adequate monitoring procedures on the subrecipients. Without communication of required information, subrecipients may overspend award amounts or incur unallowable expenses towards the grant. Questioned Costs: N/A Statistical Sampling: Statistical sampling was not used in making sample selections. Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to evaluate the subrecipient risk of noncompliance to ensure subrecipients are being appropriately monitored in compliance with federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
METROPOLITAN TRANSPORTATION AUTHORITY (A Component Unit of the State of New York) SCHEDULE OF FINDINGS AND QUESTIONED COSTS- FEDERAL AWARDS (CONTINUED) YEAR ENDED DECEMBER 31, 2023 Reference Number: 2023-001 Federal Agency: U.S. Department of Homeland Security Federal Program: Rail and Transit Security Grant Program ALN Number: 97.075 Contract Number: FE2019-RA-00004; FE2020-RA-00005; FE2021-RA-00004; FE2022-RA-00006 Compliance Requirement: Subrecipient Monitoring Type of Finding: Deficiency-Non-Compliance 1. CRITERIA Subrecipient Monitoring - As stated in Uniform Grant Guidance - §200.331 Requirements for pass-through entities, all pass-through entities must: Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: • Subrecipient name (which must match the name associated with its unique entity identifier); • Subrecipient’s unique entity identifier; • Federal Award Identification Number (FAIN); • Assistance Listing Number (ALN) Number and Name; the pass-through entity must identify the dollar amount made available under each Federal award and the ALN number at time of disbursement; • Identification of whether the award is Research & Development; and • Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414 Indirect (F&A) costs); 2. CONDITION/PERSPECTIVE Metropolitan Transportation Authority (“MTA”) has subrecipient monitoring procedures in place. MTA has corporate policies and procedures regarding subrecipient contracts. We reviewed Rail and Transit Security Grant Program’s subrecipient monitoring compliance. This program had one subrecipient. Based on our review of the subrecipient contract for this program, we noted that the subrecipient contract did not have all the required elements as stated in §200.331. 3. CAUSE MTA did not ensure that the contract between MTA and the subrecipient included the ALN and all other required elements as required by 2 CFR; §200.331. 4. EFFECT The Subrecipient may not identify an MTA contract as a federal program, and therefore may not follow the required federal award requirements. Additionally the subrecipient may not include the program in the Subrecipient’s schedule of expenditures of federal awards and the program may not be audited as part of the Subrecipient’s single audit. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend that MTA implement policies and procedures to communicate the federal grant information to all subrecipients in accordance with Uniform Grant Guidance CFR 200.331 Subrecipient Requirements. 7. QUESTIONED COST None. 8. VIEWS OF RESPONSIBLE OFFICIAL The MTA Office of Security is acknowledging the sub-recipient agreement did not include the ALN Number – 97.075, Identification of whether the award is R&D and Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414 on the check list. The MTA does provide a copy of the award letter to our sub-recipient(s) and we perform yearly sub-recipient monitoring of our sub-recipient(s). Also, see “Corrective Action Plan”.
2023-004: U.S. Department of Agriculture Soil and Water Conservation Assistance Listing #10.902 Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance and Non-Compliance Grant Award Number: NR230436XXXXC017 Criteria: The OMB Compliance Supplement (2 CFR 200.331) requires that pass-through entities (PTE) disbursing federal funds to subrecipients have a formalized policy for identifying the subrecipient meets the applicable requirements, for evaluating risk, for monitoring subrecipient activity, and for ensuring accountability of For-Profit Subrecipients, if applicable. As part of the risk assessment, entities must ensure subrecipients are not suspended or debarred. During monitoring activities, the PTE is required to obtain the subrecipients’ audit reports so that any findings can be evaluated by the PTE’s management. Condition: Several required elements per 2 CFR 200.331 being absent from the subrecipient agreements, including: - Subrecipients’ unique entity identifier - Federal award date of award to Wallowa Resources by the USDA - ALN number and dollar amount made available by the USDA Wallowa Resources was unable to provide support that subrecipients were assessed for suspension and debarment during the risk assessment. Cause: Wallowa Resources did not have a formalized policy for subrecipient monitoring which resulted in several required elements per 2 CFR 200.331 being absent from the subrecipient agreements, lack of retention for work performed during the risk assessment and monitoring activities. Effect: Certain compliance elements related to subrecipient monitoring not met as a result of ineffective controls. Questioned Costs: None Context/Sampling: There were four subrecipients within the scope of this audit, of which 75% were tested and the above-noted items were consistent. Repeat Finding from Prior Year: No Recommendation: We recommend Wallowa Resources implement a formal subrecipient monitoring policy using the guidance of 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes, federal award identification, subrecipient name, subrecipient’s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient’s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient’s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County’s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. Quarterly reports were also not submitted to the County by the subrecipients subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. One of the five subrecipients was missing an internal checklist that is signed by the County Manager. Five of the five subrecipients were provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: Yes, repeat of prior year finding 2022-004. Recommendation: CLA recommends that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes, federal award identification, subrecipient name, subrecipient’s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient’s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient’s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County’s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. Quarterly reports were also not submitted to the County by the subrecipients subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. One of the five subrecipients was missing an internal checklist that is signed by the County Manager. Five of the five subrecipients were provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: Yes, repeat of prior year finding 2022-004. Recommendation: CLA recommends that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes, federal award identification, subrecipient name, subrecipient’s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient’s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient’s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County’s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. Quarterly reports were also not submitted to the County by the subrecipients subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. One of the five subrecipients was missing an internal checklist that is signed by the County Manager. Five of the five subrecipients were provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: Yes, repeat of prior year finding 2022-004. Recommendation: CLA recommends that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
NATIONAL SCIENCE FOUNDATION Program Information Assistance Listing # 47.076 STEM Education Grant No. (FAIN) 2005484 Grant Period - September 1, 2020 – August 31, 2023 Grant No. (FAIN) 2005942 Grant Period – August 15, 2020 – July 31, 2024 2023-001 Documentation of Subawards Material Weakness Criteria: The Code of Federal Regulations (CFR) Section 200.331 requires a pass-through entity (PTE) to 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)). Condition: A sample of three subawards were selected. Two of the three subawards did not have a subaward agreement. Also, there were no controls in place to detect or prevent these agreements from not being obtained. Cause: This is the first year that the Foundation was required to have a Single audit and as such is still in the process of developing and adopting specific policies for subawards and subrecipients. Effect: During 2023 contemporaneous documentation was not obtained from subawardees and subrecipients. Auditor’s Recommendation: We recommend that management adopt an internal control policy which requires all sub-awardees to have a subaward agreement or memorandum of understanding (MOU). Views of Responsible Officials and Planned Corrective Actions: The Foundation’s management team agrees with this finding and remains fully committed to both developing and adopting specific policies for subawards and subrecipients which will better ensure its internal practices are in alignment with the Uniform Guidance.
2 CFR § 200.331 requires a pass-through entity to clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward by providing the information described in 2 CFR section 200.331(a)(1); (2) all requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award; and (3) any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibilities for the Federal award. The Harrison County Department of Job and Family Services (HCDJFS) did not have proper internal controls in place to ensure subrecipient monitoring was properly performed. HCDJFS contracted with a subrecipient to provide services related to its Comprehensive Case Management Employment Program (CCMEP) of the Temporary Assistance for Needy Families (TANF) federal grant. The HCDJFS did not perform necessary monitoring procedures under the Uniform Guidance over this subrecipient. Failure to adequately monitor subrecipients increases the risk that subrecipients may not properly utilize federal funds or adhere to program requirements. The Harrison County Department of Job and Family Services should review the Uniform Guidance in 2 CFR part 200, which lists its responsibilities as a pass-through entity, establish and maintain its own internal control procedures over compliance with grant requirements, and create a subrecipient monitoring policy to meet the Uniform Guidance audit requirements. The HCDJFS should also document its subrecipient monitoring controls and reviews and maintain the documentation over the monitoring over its subrecipient.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR Part 200.332, pass through entities are responsible for performing monitoring procedures based upon identified risks and must retain documentation to provide reasonable assurance that subrecipients used the subawards for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Pass through entities are also responsible for ensuring and documenting the determination of valid subrecipients per 2 CFR Part 200.331. Condition: There was no documentation to support the key control that the ED reviews and approves subrecipients’ reimbursement requests as a means of monitoring subrecipient activities. Additionally, there was ambiguity in the subaward agreements about whether the grantees were subrecipients, subcontractors, or beneficiaries. Questioned costs: None. Context: In a statistically valid sample, all 13 subrecipients tested were missing evidence of the ED’s review that subrecipient costs and activities were allowable and met the requirements of the award. None of the subaward agreements tested included all of the information required by 2 CFR section 200.332(a) to sufficiently inform the subrecipients that they were recipients of federal funds and must comply with federal statues, regulations ,and terms and conditions of the federal award. Cause: Lack of adequate knowledge about subrecipient monitoring requirements. Effect: Potential for fraudulent transactions and misuse of subaward by subrecipients due to lack of oversight. Repeat Finding: No. Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). Views of responsible officials: There is no disagreement with the audit finding.
Questioned Costs: $88,135 Criteria: In accordance with 2 CFR § 200.403–.405, costs charged to federal awards must be allowable, allocable, and supported by valid documentation. Additionally, under 2 CFR § 200.318–.320, all contracts must be awarded with clear terms and timeframes and must be executed prior to the provision of goods or services. For subawards, 2 CFR § 200.331 requires that subrecipient agreements be in writing and include all legally required terms and conditions. Payments made outside the terms of a written, active contract — particularly beyond expiration dates — may be deemed unallowable due to lack of legal obligation and documentation. Condition: Of the ten contracts selected for testing, seven were expired at the time payments were made. In total, the Organization paid $88,135 for services rendered beyond the contract end dates, including payments to one subrecipient and multiple consultants or contractors. The Organization indicated that all payments were budgeted within the approved federal grant agreements; however, these payments were not supported by amendments, extensions, or new agreements authorizing continued work or compensation. Additionally, in four additional instances, one selected for testing, contracts specified hourly or deliverable rates and defined service periods but contained inaccurate or inconsistent total compensation amounts. One of four contracts made payments under these agreements that exceeded the stated contract total. Overall, the discrepancies created ambiguity about the authorized funding limit and raise concerns about enforceability and allowability of the costs under federal award terms. Cause: The Organization did not have sufficient procedures in place to monitor contract expiration dates or to ensure that updated agreements were executed before authorizing payments. In these cases, services continued based on verbal agreements or historical practice rather than a valid, enforceable contract. Effect: As a result, $88,135 in costs were incurred and charged to the federal grant without a valid contractual basis. Even though the costs were budgeted, the lack of a valid, active contract invalidates the legal obligation required for allowability under 2 CFR § 200.403 and § 200.405. Therefore, the costs are questioned pending resolution with the federal awarding agency. Furthermore, the absence of executed agreements represents a significant internal control deficiency and increases the risk of unauthorized or disputed expenditures. The inconsistencies in contractual rates expose the Organization to the risk of paying amounts not clearly authorized by written agreements and may result in questioned or disallowed costs, especially if contract limits are exceeded. Weaknesses in contract drafting and review also constitute a significant deficiency in internal control over compliance. Identification of Repeat Finding: ☐ Yes ☑ No Recommendation: We recommend that the Organization: • Develop and implement a contract tracking system to monitor start and end dates. • Require that all contracts, extensions, and amendments be executed before services are rendered or payments are issued. • Provide training to program and procurement staff on federal procurement standards and contract management. • Review existing contracts to ensure compliance and take corrective action for any others that may have expired. • Work with the awarding agency to determine whether any portion of the $88,135 must be refunded.
SOME FEDERAL AWARDS MAY CONTAIN COST LIMITATIONS ON RECOVERY OF INDIRECT COSTS THAT DIFFER FROM THE FEDERALLY NEGOTIATED INDIRECT COST RATES. IN THESE CASES, THE INDIRECT COST RATE WILL BE SPECIFIED IN THE AWARD, AD DESCRIBED IN 2 CFR SECTIONS 200.210(A)(15) AND 200.331(A)(1)(XIII). NONPROFIT ORGANIZATIONS MUST CONFORM TO COST PRINCIPLES IN 2 CFR PART 200, SUBPART E, APPENDIX IV, AND CAS (IF APPLICABLE), AND IN ACCORDANCE WITH ANY NEGOTIATED RATE AGREEMENTS AND SPECIFIC AWARD CONDITIONS/LIMITATIONS. ADDITIONALLY, RATES USED MUST BE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AWARD AND THE AMOUNTS CLAIMED MUST BE APPLIED TO THE APPROPRIATE BASE. IDAHO IMMUNIZATION COALITION, INC. WAS UNABLE TO PROVIDE DOCUMENTATION OF AN APPROPRIATE BASE OF EXPENDITURES FOR THE AWARD APPROVED RATE WAS APPLIED TO.
2023-008 - Uniform Guidance Subrecipient Monitoring - Significant Deficiency/Noncompliance Federal Program: Assistance Listing #21.027, Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of Treasury, Pass Through Entity Identifying Number: Not Available Assistance Listing #21.023, Emergency Rental Assistance Program, U.S. Department of Treasury, Passed through the Pennsylvania Department of Human Services, Pass-Through Entity Identifying Number: N/A Prior Year Finding Number 2022-004 Criteria: The requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), §200.331 Requirements for Pass-through Entities, requires entities who pass federal funding through to subrecipients evaluate each subrecipient's risk of noncompliance. As detailed in 2 CFR sections 200.331(d) through (f), the Uniform Guidance requires pass-through entities to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient, as detailed in 2 CFR section 200.521. Condition/Context: As part of our follow-up on previous audit findings and based on our current year testing, it was noted that the County is not formally documenting its monitoring activities over its subrecipients in compliance with the Uniform Guidance. Questioned Costs: N/A Cause: While the County has monitoring processes in place for subrecipients, it is not currently documenting certain of the initial risk assessment decisions or the occurrence of ongoing monitoring activities for its subrecipient, representing a significant deficiency in internal control over compliance. Effect: The County is not in compliance with certain requirements of the Uniform Guidance. Recommendation: We recommend that County management perform and document the various monitoring activities performed with regard to its subrecipients. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to provide better oversight and monitoring of entities that receive pass-through grant dollars. See corrective action plan.
2023-008 - Uniform Guidance Subrecipient Monitoring - Significant Deficiency/Noncompliance Federal Program: Assistance Listing #21.027, Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of Treasury, Pass Through Entity Identifying Number: Not Available Assistance Listing #21.023, Emergency Rental Assistance Program, U.S. Department of Treasury, Passed through the Pennsylvania Department of Human Services, Pass-Through Entity Identifying Number: N/A Prior Year Finding Number 2022-004 Criteria: The requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), §200.331 Requirements for Pass-through Entities, requires entities who pass federal funding through to subrecipients evaluate each subrecipient's risk of noncompliance. As detailed in 2 CFR sections 200.331(d) through (f), the Uniform Guidance requires pass-through entities to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. This includes issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient, as detailed in 2 CFR section 200.521. Condition/Context: As part of our follow-up on previous audit findings and based on our current year testing, it was noted that the County is not formally documenting its monitoring activities over its subrecipients in compliance with the Uniform Guidance. Questioned Costs: N/A Cause: While the County has monitoring processes in place for subrecipients, it is not currently documenting certain of the initial risk assessment decisions or the occurrence of ongoing monitoring activities for its subrecipient, representing a significant deficiency in internal control over compliance. Effect: The County is not in compliance with certain requirements of the Uniform Guidance. Recommendation: We recommend that County management perform and document the various monitoring activities performed with regard to its subrecipients. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to provide better oversight and monitoring of entities that receive pass-through grant dollars. See corrective action plan.
Federal Agency: U.S. Department of Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP3412 - 2023 Award Period: 2023 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Related to subrecipient monitoring requirements of State and Local Fiscal Recovery Funds, there should be a documented control in place to ensure all subrecipients of federal grants are in compliance with Title 2 U.S. Code of Federal Regulations § 200.331 - 200.333. Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our testing it was noted that, for 1 of 1 subrecipients tested, the county was not able to provide any documentation of the review performed to ensure they are meeting federal requirements surrounding subrecipient monitoring. Questioned costs: None Context: 1 of 1 subrecipients selected for testing were missing documentation. Cause: The County has a monitoring checklist they complete, but did not have adequate documentation that it was completed. Effect: It is possible that the County subrecipient could be ineligible to receive funding if an error is made in compiling the information since there is no control in place in some instances to ensure that errors are not being made prior to payment. Repeat finding: No Recommendation: We recommend that the County establish clear policies and procedures for formal review and approval of subrecipient monitoring checklists. Views of responsible officials: There is no disagreement with the finding.
Finding 2023-001 – Reporting Identification of federal program: Assistance Listing No. 93.558 – Temporary Assistance for Needy Families. Criteria or specific requirement: Section 200.332 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for pass-through entities. A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(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 200.332(a)(3)). Condition: The Organization was not able to provide executed agreements with its subrecipients covering the period under audit that meet the requirements of Section 200.332 of the Uniform Guidance. Cause: Management indicated that the existing subaward agreements, which do not cover the year ended December 31, 2023, were not updated due to an oversight attributed to personnel vacancies. Effect or potential effect: Noncompliance with Section 200.332 of the Uniform Guidance could result in misunderstanding in program compliance requirements. Questioned cost: not applicable. Context: The Organization was not able to provide executed agreements that cover the audit period for the two subawards made under this program. Recommendation: We recommend that the Organization update and execute agreements with its subrecipients that contains all the required elements of Section 200.332 of the Uniform Guidance. Views of responsible officials: The Organization concurs with this finding. See page 40 for corrective action plan.
Finding 2023-001 – Reporting Identification of federal program: Assistance Listing No. 93.558 – Temporary Assistance for Needy Families. Criteria or specific requirement: Section 200.332 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for pass-through entities. A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(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 200.332(a)(3)). Condition: The Organization was not able to provide executed agreements with its subrecipients covering the period under audit that meet the requirements of Section 200.332 of the Uniform Guidance. Cause: Management indicated that the existing subaward agreements, which do not cover the year ended December 31, 2023, were not updated due to an oversight attributed to personnel vacancies. Effect or potential effect: Noncompliance with Section 200.332 of the Uniform Guidance could result in misunderstanding in program compliance requirements. Questioned cost: not applicable. Context: The Organization was not able to provide executed agreements that cover the audit period for the two subawards made under this program. Recommendation: We recommend that the Organization update and execute agreements with its subrecipients that contains all the required elements of Section 200.332 of the Uniform Guidance. Views of responsible officials: The Organization concurs with this finding. See page 40 for corrective action plan.
Finding 2023-001 – Reporting Identification of federal program: Assistance Listing No. 93.558 – Temporary Assistance for Needy Families. Criteria or specific requirement: Section 200.332 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for pass-through entities. A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(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 200.332(a)(3)). Condition: The Organization was not able to provide executed agreements with its subrecipients covering the period under audit that meet the requirements of Section 200.332 of the Uniform Guidance. Cause: Management indicated that the existing subaward agreements, which do not cover the year ended December 31, 2023, were not updated due to an oversight attributed to personnel vacancies. Effect or potential effect: Noncompliance with Section 200.332 of the Uniform Guidance could result in misunderstanding in program compliance requirements. Questioned cost: not applicable. Context: The Organization was not able to provide executed agreements that cover the audit period for the two subawards made under this program. Recommendation: We recommend that the Organization update and execute agreements with its subrecipients that contains all the required elements of Section 200.332 of the Uniform Guidance. Views of responsible officials: The Organization concurs with this finding. See page 40 for corrective action plan.
Finding 2023-001 – Reporting Identification of federal program: Assistance Listing No. 93.558 – Temporary Assistance for Needy Families. Criteria or specific requirement: Section 200.332 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for pass-through entities. A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(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 200.332(a)(3)). Condition: The Organization was not able to provide executed agreements with its subrecipients covering the period under audit that meet the requirements of Section 200.332 of the Uniform Guidance. Cause: Management indicated that the existing subaward agreements, which do not cover the year ended December 31, 2023, were not updated due to an oversight attributed to personnel vacancies. Effect or potential effect: Noncompliance with Section 200.332 of the Uniform Guidance could result in misunderstanding in program compliance requirements. Questioned cost: not applicable. Context: The Organization was not able to provide executed agreements that cover the audit period for the two subawards made under this program. Recommendation: We recommend that the Organization update and execute agreements with its subrecipients that contains all the required elements of Section 200.332 of the Uniform Guidance. Views of responsible officials: The Organization concurs with this finding. See page 40 for corrective action plan.
Finding 2023-002: Pre-Award Risk Assessment for Sub-Recipient Information on the Federal Program: 93.048 Criteria: 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 testing performed over subrecipient expenditures, we were unable to obtain evidence that pre-award risk assessment procedures were performed over subrecipients, consistent with 2 CFR §200.332(b). Cause: The Organization's internal policies and procedures governing risk assessment on subrecipients was not performed. Effect or Potential Effect: The Organization could inadvertently be engaged 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 substantive testwork over a sample of subrecipients. We consider our sample to be representative of the population. The samples were made using statistical sampling and we believe the condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the Organization follow their internal policies regarding performing a pre-award risk assessment on all new sub-recipients engaged throughout the life of the award. For repeat sub-recipients, the risk assessment should be re-visited throughout the award term to ensure that conditions have not changed and the original risk assessment remains reasonable.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: COVID-19 Community Development Block Grants Assistance Listing Number: 14.228 Federal Award Identification Number and Year: B-20-DW-27-0001, 2023 Pass-Through Agency: Minnesota Department of Employment and Economic Development, Business and Community Development Division Pass-Through Number: B-20-DW-27-0001 Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: Recipients of $150,000 or more of grant funds must submit, no later than 7 days after the end of each calendar quarter, a quarterly report to the State. Quarterly reports mush be in accordance with reporting requirements set forth in section 15011 of the CARES Act. The Grantee will monitor the activities of the sub-recipient according to 2 CFR §200.303 and 2 CFR §200.331 as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the sub-award; and that sub-award performance goals are achieved. This includes reviewing financial and programmatic reports required by the pass-through entity. Condition: Proper records were not retained for reports and there was no oversight by County management of the reports being submitted by the subrecipient to the State. Questioned Costs: None noted. Context: For one of two quarterly reports tested, there was no record on file for the report that was submitted. For one of two quarterly reports tested, the report was not submitted by the deadline listed in the grant agreement. For all reports, it was noted that there was no review by County management of the reports submitted by the subrecipient and the County received a copy of the report at the same time as the submission was completed. Cause: Insufficient management oversight. Effect: Ineligible costs could be reported. Repeat Finding: No. Recommendation: We recommend that the County reviews their policies to ensure reporting requirements are met including a review of the subrecipient reports prior to submission. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: COVID-19 Community Development Block Grants Assistance Listing Number: 14.228 Federal Award Identification Number and Year: B-20-DW-27-0001, 2023 Pass-Through Agency: Minnesota Department of Employment and Economic Development, Business and Community Development Division Pass-Through Number: B-20-DW-27-0001 Compliance Requirement Affected: Subrecipient Monitoring Award Period: Year Ended December 31, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: The grantee will monitor the activities of the sub-recipient according to 2 CFR §200.303 and 2 CFR §200.331 as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the sub-award; and that sub-award performance goals are achieved. Condition: Proper records were not retained as required by subrecipient monitoring purposes. Questioned Costs: None noted. Context: There are no monitoring policies or procedures in place at the County. There was no documentation on file to support that the County monitored the subrecipient to ensure they used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward or that the subrecipient audits were completed in accordance with requirements. Cause: Insufficient management oversight. Effect: Ineligible costs could be reported. Repeat Finding: No. Recommendation: We recommend that the County reviews their policies to ensure they are monitoring subrecipients and retaining documentation as required by federal guidelines. Views of responsible officials: There is no disagreement with the audit finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient 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.).
Federal Programs – AL 93.569 – Community Services Block Grant Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2023, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – Due to internal control deficiency noted in 2023-002, the subrecipient monitoring requirement was not in compliance during the current year. Context– Of the total federal expenditures under the program noted above, $276,165 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with CAPND staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the five subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is not a repeat finding.
Federal Programs – AL 93.569 – Community Services Block Grant Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2023, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – Due to internal control deficiency noted in 2023-002, the subrecipient monitoring requirement was not in compliance during the current year. Context– Of the total federal expenditures under the program noted above, $276,165 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with CAPND staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the five subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is not a repeat finding.
Federal Programs – AL 93.569 – Community Services Block Grant Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2023, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – Due to internal control deficiency noted in 2023-002, the subrecipient monitoring requirement was not in compliance during the current year. Context– Of the total federal expenditures under the program noted above, $276,165 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with CAPND staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the five subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is not a repeat finding.
Finding Number: 2023-001 Internal Control over Compliance and Compliance with the Subrecipient Monitoring Compliance Requirement, Repeat Finding, Finding No. 2022-001 Identification of the Major Federal Program: Programs: Government Agency: Inclusion Across the Nation of Communities of Learners of Underrepresented Discoverers in Engineering and Science Assistance Listing Number: 47.076 Award Number: HRD-1834540 Award Years: 09/01/2018 – 02/28/2025 PhysTEC: Building a Solution to the National Physics Teacher Shortage Assistance Listing Number: 47.049 Award Number: PHY-1707990 Award Years: 07/01/2017 – 06/30/2023 National Science Foundation (NSF) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. reviewing financial and programmatic (performance and special reports) required by the PTE; 2. following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means; 3. issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions – Our examination of the program’s subrecipient monitoring requirements includes the review and approval of financial and performance quarterly reports by the program managers. The quarterly reports are prepared by APS’ grants administrator with inputs provided by the subrecipient submitted to the program managers. Of the program’s twenty (20) subrecipients, we examined eight (8) subrecipients and observed that although the respective program managers had monitoring oversight of the various grant’s financial and programmatic activities, there was no formal evidentiary documentation to support the monitoring oversight process performed by the program managers. Furthermore, our examination of the program’s subrecipient monitoring requirements includes follow-ups by APS to ensure the subrecipients take timely and appropriate action on all deficiencies pertaining to federal awards provided to the subrecipients which have been detected through reviews of audits, on-site reviews, and other means. We selected six (6) subrecipients for testing and noted that for two (2) samples selected APS was unable to provide evidence that it monitored the subrecipients through review of its single audit reports, on-site reviews, and other means. We also tested a sample of three (3) subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds timely and on one (1) of the sub awards reported, the contract award amount reported is less than the actual expenditures incurred by the subrecipient. APS began implementation of its corrective action plan on June 5, 2023, and the exceptions identified above is as a result of the fact that APS was still in the implementation process of its corrective action plan. Cause - Management does not have adequate internal controls and policies and procedures in place to ensure that a review is performed on the financial and programmatic reports in a timely manner and to ensure that its subrecipients do not have any audit deficiencies relating to federal award programs and if any deficiencies are detected, that the subrecipients takes timely and appropriate action to resolve the deficiencies identified. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS’ noncompliance with the reporting requirements. Effect or potential effect – APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. In addition, failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs – None. Context – These are conditions identified per review of APS compliance with specified compliance requirements using a statistically valid sample. Recommendations – BDO recommends that APS continue to apply the implemented policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are documented and maintained. Furthermore, APS should continue to implement policies to obtain and review single audit reports of its subrecipients in order to ensure compliance with all the required laws, guidelines and requirement under the award. BDO recommends that APS continues to implement established policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS’ corrective action is described in the Management’s Corrective Action Plan included below.
Finding Number: 2023-001 Internal Control over Compliance and Compliance with the Subrecipient Monitoring Compliance Requirement, Repeat Finding, Finding No. 2022-001 Identification of the Major Federal Program: Programs: Government Agency: Inclusion Across the Nation of Communities of Learners of Underrepresented Discoverers in Engineering and Science Assistance Listing Number: 47.076 Award Number: HRD-1834540 Award Years: 09/01/2018 – 02/28/2025 PhysTEC: Building a Solution to the National Physics Teacher Shortage Assistance Listing Number: 47.049 Award Number: PHY-1707990 Award Years: 07/01/2017 – 06/30/2023 National Science Foundation (NSF) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. reviewing financial and programmatic (performance and special reports) required by the PTE; 2. following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means; 3. issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions – Our examination of the program’s subrecipient monitoring requirements includes the review and approval of financial and performance quarterly reports by the program managers. The quarterly reports are prepared by APS’ grants administrator with inputs provided by the subrecipient submitted to the program managers. Of the program’s twenty (20) subrecipients, we examined eight (8) subrecipients and observed that although the respective program managers had monitoring oversight of the various grant’s financial and programmatic activities, there was no formal evidentiary documentation to support the monitoring oversight process performed by the program managers. Furthermore, our examination of the program’s subrecipient monitoring requirements includes follow-ups by APS to ensure the subrecipients take timely and appropriate action on all deficiencies pertaining to federal awards provided to the subrecipients which have been detected through reviews of audits, on-site reviews, and other means. We selected six (6) subrecipients for testing and noted that for two (2) samples selected APS was unable to provide evidence that it monitored the subrecipients through review of its single audit reports, on-site reviews, and other means. We also tested a sample of three (3) subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds timely and on one (1) of the sub awards reported, the contract award amount reported is less than the actual expenditures incurred by the subrecipient. APS began implementation of its corrective action plan on June 5, 2023, and the exceptions identified above is as a result of the fact that APS was still in the implementation process of its corrective action plan. Cause - Management does not have adequate internal controls and policies and procedures in place to ensure that a review is performed on the financial and programmatic reports in a timely manner and to ensure that its subrecipients do not have any audit deficiencies relating to federal award programs and if any deficiencies are detected, that the subrecipients takes timely and appropriate action to resolve the deficiencies identified. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS’ noncompliance with the reporting requirements. Effect or potential effect – APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. In addition, failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs – None. Context – These are conditions identified per review of APS compliance with specified compliance requirements using a statistically valid sample. Recommendations – BDO recommends that APS continue to apply the implemented policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are documented and maintained. Furthermore, APS should continue to implement policies to obtain and review single audit reports of its subrecipients in order to ensure compliance with all the required laws, guidelines and requirement under the award. BDO recommends that APS continues to implement established policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS’ corrective action is described in the Management’s Corrective Action Plan included below.
Federal Agency: U.S. Department of Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agency: Indiana Finance Authority Pass-Through Number: Unknown Type of Finding: • Significant deficiency and noncompliance Criteria or Specific Requirement – Subrecipient Monitoring: Pursuant to 2 CFR § 200.331, non-Federal entities can award subawards for the purpose of carrying out a portion of a federal award and creates a federal assistance relationship with the subrecipient. In addition, pursuant to 2 CFR § 200.332, the non-Federal entity must identify to the subrecipient as a subaward and includes the Federal award identification. The non-Federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, incompliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The County could not provide support that it had sufficient review of the subrecipient during the year on a consistent basis. The County had not properly designed or implemented a system of internal controls that would likely be effective in preventing, detecting, and correcting, noncompliance. Questioned Costs: None Context: It was noted that the file selected for testing did not have documented evidence supporting that the County had sufficient monitoring and communication of the subrecipient. From a population of three files, one was selected for testing. Our sample was not intended to be statistically valid. Effect: The County was unable to support that the subrecipients were being monitored. Cause: Failure to maintain sufficient monitoring of the subrecipient Identification as a Repeat Finding: Yes, 2022-003 Recommendation: We recommend the County maintain adequate communication and documentation with the subrecipients to ensure compliance with the subrecipients requirement. This documentation could include a quarterly communication, receipt of the audited financial statements and single audit report, if applicable. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agency: U.S. Department of Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agency: Indiana Finance Authority Pass-Through Number: Unknown Type of Finding: • Significant deficiency and noncompliance Criteria or Specific Requirement – Subrecipient Monitoring: Pursuant to 2 CFR § 200.331, non-Federal entities can award subawards for the purpose of carrying out a portion of a federal award and creates a federal assistance relationship with the subrecipient. In addition, pursuant to 2 CFR § 200.332, the non-Federal entity must identify to the subrecipient as a subaward and includes the Federal award identification. The non-Federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, incompliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The County could not provide support that it had sufficient review of the subrecipient during the year on a consistent basis. The County had not properly designed or implemented a system of internal controls that would likely be effective in preventing, detecting, and correcting, noncompliance. Questioned Costs: None Context: It was noted that the file selected for testing did not have documented evidence supporting that the County had sufficient monitoring and communication of the subrecipient. From a population of three files, one was selected for testing. Our sample was not intended to be statistically valid. Effect: The County was unable to support that the subrecipients were being monitored. Cause: Failure to maintain sufficient monitoring of the subrecipient Identification as a Repeat Finding: Yes, 2022-003 Recommendation: We recommend the County maintain adequate communication and documentation with the subrecipients to ensure compliance with the subrecipients requirement. This documentation could include a quarterly communication, receipt of the audited financial statements and single audit report, if applicable. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.