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.
Criteria: Per 2 CFR 200.332, Mesa County is 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. Mesa County is required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. In addition, the County should also verify that 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: During our testing, we evaluated the procedures for evaluating subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. We noted the following: • For two (2) of two (2) subrecipients selected, the required evaluation of the subrecipient’s risk of noncompliance was not documented. Cause: The County did not adhere to their established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Effect: The County’s policies were not consistently followed requiring compliance with the Subrecipient monitoring requirements in 2 CFR 200.332. Additionally, the County’s control policies were not consistently followed. Questioned Costs: None to report. Context/Sampling: The population of two (2) subrecipients were selected for subrecipient monitoring testing for the direct award from the US Department of Treasury. The total population across the program, including sub-awards from the State of Colorado was 2 subrecipients. Repeat Finding from Prior Years: Yes. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: Agree
Cluster: Research and Development Agency: Department of Human and Health Services Award Names: Safety and Health Risks in Energy Transition for the Commercial Fishing Industry Award Numbers: U01OH012502 Assistance Listing Title: Center for Disease Control and Prevention (CDC) Assistance Listing Number: 93.262 Award Year: FY 2023 Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition Through our testing of 4 subrecipients out of a total subrecipient population of 10, we were able to obtain a documented initial risk assessment for each subrecipient selected and other evidence of monitoring such as meetings with the subrecipients. However, we were unable to obtain evidence that the Company obtained and reviewed the annual Uniform Guidance report or annual audited financial statements (if the entity was not subject to a Uniform Guidance audit) for 1 out of 4 subrecipients selected for testing. Cause The Company failed to ensure that their subrecipient monitoring process included obtaining and reviewing every subrecipient’s annual Uniform Guidance report or annual audited financial statements during FY 2023. Effect The lack of an annual review of subrecipient audits may result in ineligible subrecipients receiving federal awards, subrecipient findings not being fully remediated and other monitoring procedures (based on risk level) not being performed. Questioned Costs None noted. Recommendation We recommend the Company follow their policy, which includes obtaining and reviewing Uniform Guidance reports (or audited financial statements to the extent Uniform Guidance reports are not available) for every subrecipient on an annual basis and ensure that it is completed for all applicable awards. When reviewing the reports, they should understand the type of opinion(s) expressed and whether there were any findings associated with their awards, document their review and assess whether there is any change in the risk assessment and subsequent monitoring needed of each subrecipient. We also recommend a supervisory review over subrecipient monitoring to be included in the process to ensure it gets completed completely and accurately for all awards. This supervisory review should also be evidenced through documentation. This is a repeat finding of 2022-001, which continued to remain open during FY2023. Management’ Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report.
MONITORING Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 93.391 – Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Department of Health and Human Services Award Number: NH75OT0000010 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.332 states- All pass-through entities must ensure that every subaward is clearly identified to the subrecipient and includes the following information at the time of the subaward as follows: (1) Federal award identification, (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 terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports, (4) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (5) Appropriate terms and conditions concerning the closeout of the subaward. Condition: For all four subrecipients tested, subaward agreements did not include the award information required under 2 CFR 200.332. This was a finding carried over from the prior period. There were no new contracts entered into with subrecipients during 2023. Cause: Subaward agreements were not properly written and appropriately reviewed to ensure all required award information was included. Effect or Potential Effect: Denver Department of Public Health and Environment (DDPHE) was not in compliance with subrecipient requirements outlined in 2 CFR Section 200.332. Furthermore, not communicating proper compliance requirements and other information may increase the likelihood of noncompliance on the part of the subrecipient and non-fulfillment of program goals and objectives. In addition, this also increases the risk the subrecipient may not understand they are receiving Federal funds, which could result in subrecipients failing to comply with the Uniform Guidance or pass-through entity requirements for the award. Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present when DDPHE entered into agreements with its subrecipients. These were the same contracts in existence in the prior period. The grant ended on May 31, 2023, and was closed out. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-007 in the 2022 report. Recommendation: DDPHE should revise future subaward agreements to include specific Federal award identification information and language clearly stating applicable audit requirements subrecipients must comply with to ensure all agreements comply with the requirements in 2 CFR Section 200.332. Views of Responsible Officials: This has been remediated. For additional information, see the City’s separate report for planned corrective actions.
Finding 2023-001 – Subrecipient Monitoring Federal Agency: Department of Treasury Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN #21.027 Condition: The County did not have a documented risk assessment process for evaluating the subrecipient’s risk of non-compliance. As part of the monitoring process, the County also did not have controls in place to obtain and review the annual audit reports of all subrecipients. Criteria: 2 CFR section 200.332(b) requires pass-through entities to evaluate subrecipient risks of noncompliance as part of their subrecipient monitoring procedures. In addition, 2 CFR section 200.332(d) indicates as part of the monitoring process, the pass-through entity should ensure subrecipients take follow-up action on audit deficiencies, which would be identified as part of the review of the annual audit reports of subrecipients. Cause: There were no procedures in place to document the County’s assessment of risk for subrecipients and the County does not have procedures in place to adequately review the subrecipient audits received. Effect: The deficiencies in subrecipient monitoring could result in the County not identifying unallowable expenditures being incurred by County subrecipients. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: We recommend implementation of procedures to formally document and complete a risk assessment of subrecipients. Based on the risk assessment performed, the County should develop monitoring procedures to address the risks noted, which should include a documented review of subrecipient audits and deficiencies be followed up on, if applicable. Questioned Costs: Unknown Views of Responsible Official and Planned Corrective Action: Management agrees with the finding. See separate correction action plan.
Finding 2023-001 – Subrecipient Monitoring Federal Agency: Department of Treasury Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN #21.027 Condition: The County did not have a documented risk assessment process for evaluating the subrecipient’s risk of non-compliance. As part of the monitoring process, the County also did not have controls in place to obtain and review the annual audit reports of all subrecipients. Criteria: 2 CFR section 200.332(b) requires pass-through entities to evaluate subrecipient risks of noncompliance as part of their subrecipient monitoring procedures. In addition, 2 CFR section 200.332(d) indicates as part of the monitoring process, the pass-through entity should ensure subrecipients take follow-up action on audit deficiencies, which would be identified as part of the review of the annual audit reports of subrecipients. Cause: There were no procedures in place to document the County’s assessment of risk for subrecipients and the County does not have procedures in place to adequately review the subrecipient audits received. Effect: The deficiencies in subrecipient monitoring could result in the County not identifying unallowable expenditures being incurred by County subrecipients. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: We recommend implementation of procedures to formally document and complete a risk assessment of subrecipients. Based on the risk assessment performed, the County should develop monitoring procedures to address the risks noted, which should include a documented review of subrecipient audits and deficiencies be followed up on, if applicable. Questioned Costs: Unknown Views of Responsible Official and Planned Corrective Action: Management agrees with the finding. See separate correction action plan.
Subrecipient Monitoring Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Wisconsin Department of Health Services Pass-Through Number: 155811 Federal Award Identification Number and Year: SLFRP0756; 2020 Award Period: March 1, 2020 – December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: 2 CFR section 200.332 states that once a pass-through entity has made the decision between subrecipient versus contractor determination, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The County did not follow their established controls related to ensuring subrecipient monitoring policies were followed. Questioned Costs: $300,000 Context: While performing compliance procedures, it was noted that the County did not follow their policy to ensure compliance with subrecipient monitoring requirements. Cause: While the County's grant administration policy discusses the steps needed to monitor subrecipients, the County did not have a designated individual to follow up on the monitoring of the subrecipient to ensure compliance. Effect: The County is not in compliance with subrecipient monitoring requirements. Grant funding received by a subrecipient could be used in a manner that is not compliant with Uniform Guidance. Repeat Finding: No Recommendation: We recommend the County review internal policies and procedures regarding who is responsible for monitoring the subrecipient in order to ensure it meets the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials: There is no disagreement with the finding.
Subrecipient Monitoring Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Wisconsin Department of Health Services Pass-Through Number: 155811 Federal Award Identification Number and Year: SLFRP0756; 2020 Award Period: March 1, 2020 – December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: 2 CFR section 200.332 states that once a pass-through entity has made the decision between subrecipient versus contractor determination, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The County did not follow their established controls related to ensuring subrecipient monitoring policies were followed. Questioned Costs: $300,000 Context: While performing compliance procedures, it was noted that the County did not follow their policy to ensure compliance with subrecipient monitoring requirements. Cause: While the County's grant administration policy discusses the steps needed to monitor subrecipients, the County did not have a designated individual to follow up on the monitoring of the subrecipient to ensure compliance. Effect: The County is not in compliance with subrecipient monitoring requirements. Grant funding received by a subrecipient could be used in a manner that is not compliant with Uniform Guidance. Repeat Finding: No Recommendation: We recommend the County review internal policies and procedures regarding who is responsible for monitoring the subrecipient in order to ensure it meets the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials: There is no disagreement with the finding.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context The County received a total State and Local Fiscal Recovery Funds (SLFRF) allocation of $13,177,707. During the audit period, the County provided subawards of SLFRF funds to other entities. As a pass-through entity, the County must: Identify the award and the applicable requirements to each subrecipient. Evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for an authorized purpose, complies with the terms and conditions of the subaward, and achieves performance goals. Subawards, totaling $290,000, were provided to two different entities. Both subrecipient agreements associated with the subawards were selected for testing. For the two agreements tested, the following information was incomplete or missing: The federal award identification number (FAIN). The federal award date of award to the recipient by the federal agency. The name of the federal awarding agency, pass-through entity (auditee), and contact information for awarding official of the pass-through entity (auditee). The Assistance Listings Number and Title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at time of disbursement. Furthermore, the County did not have an evaluation of the subrecipients' risk of noncompliance or monitoring activities demonstrating compliance with the subrecipient monitoring requirement. The County did not request any financial or audit documentation from the subrecipients. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 21 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.331(a) states: "Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. See definition for Subaward in § 200.1 of this part. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity: (1) Determines who is eligible to receive what Federal assistance; (2) Has its performance measured in relation to whether objectives of a Federal program were met; (3) Has responsibility for programmatic decision-making; (4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and (5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity." 2 CFR 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward . . . (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; INDIANA STATE BOARD OF ACCOUNTS 22 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. INDIANA STATE BOARD OF ACCOUNTS 23 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with § 200.405(d). (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward. (b) Evaluate each subrecipient's risk of noncompliance with Federal statues, regulations, and the terms and conditions of the subaward for purposes of determined the appropriate subrecipient monitoring . . . (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. . . ." Cause The system of internal controls as established by the management of the County was not properly designed nor implemented. The County was unable to provide documentation that monitoring procedures were in place over subrecipients. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot be sure subrecipients are provided an adequate subaward agreement, with all required elements and are adequately monitored. As such, subaward agreements entered into by the County did not include all the required elements. In addition, the County did not properly monitor the non-profit to ensure proper spending of the federal funds. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. INDIANA STATE BOARD OF ACCOUNTS 24 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls and develop policies and procedures to ensure subrecipients are provided with an adequate subaward agreement and monitored as appropriate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
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.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Olympic Area Agency on Aging January 1, 2023 through December 31, 2023 2023-001 The Agency did not have adequate internal controls for ensuring compliance with federal subrecipient monitoring requirements. Assistance Listing Number and Title: 93.391 – COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Federal Grantor Name: Department of Health and Human Services Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Health Pass-through Award/Contract Number: CBO26651, CBO26652 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises program is to lead and coordinate efforts to reduce COVID-19 related health disparities at the community level, improve and increase testing and contract tracing for rural populations, and improve local capacity and services to prevent and control COVID-19 infection and transmission among rural and underserved populations. The Agency spent $323,844 in 2023 in program funds to cover expenditures related to advancing health equity among high-risk populations. The program funds included $264,669 passed through to five subrecipients through seven subawards to fulfill components of the program’s objectives. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. When the Agency passes on federal funds to subrecipients, federal regulations require the Agency to ensure every subaward agreement clearly identifies that it is a federal award and includes the applicable federal requirements. Federal regulations require the Agency to report 14 federal award identification elements in each subaward agreement. When passing federal funding to subrecipients, federal regulations require the Agency to monitor the subrecipients and ensure they comply with the federal award’s terms and conditions. Description of Condition Our audit found the Agency’s internal controls were ineffective for ensuring it included all 14 required elements in its subaward agreements. All subawards were missing the following elements: • Federal Award Identification Number • Federal award date • Subaward budget period start and end date • Assistance Listing Number and program title Additionally, two of the subawards were also missing the subrecipient’s Unique Entity Identifier. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition While the Agency has a subaward template, staff responsible for creating the template did not have adequate training or understanding of these requirements and did not dedicate the necessary time and resources to creating and reviewing the template to ensure it included all required elements. Effect of Condition When subaward agreements do not include the required information, subrecipients are at an increased risk of not knowing they received federal funding and therefore need to comply with specific program requirements, which could lead subrecipients to spend the funds for unallowable purposes or not receive required single audits. The Agency did not provide evidence that it subsequently shared the missing federal award information with the five subrecipients. Recommendation We recommend the Agency ensure it includes all required elements in federally funded subaward agreements. Agency’s Response The Agency takes seriously their responsibility for managing Federal Grant Funds and accordingly will make sure that in the future subrecipient contracts will have the specific elements required by Federal Uniform Guidance in their subcontracts. The agency will institute a Contract Review Checklist and approval process that includes the 14 required elements in the Federal guidance CFR 200.332 in order to clearly identify the source of federal funds in each subaward agreement. The checklist elements will include: • Federal Award Identification Number (FAIN) • Federal Award Date • Subaward budget period start and end date • Assistance Listing Number and Program Title The completed checklist will be reviewed and approved by the Administrative Director or Contracts Director before finalizing the subrecipient agreement. In addition, the Olympic Area Agency on Aging will require contracts and program staff managing federal grants to attend Federal Uniform Guidance Grants Training. Auditor’s Remarks We thank the Agency for its cooperation throughout the audit and the steps it is taking to address these concerns. We will review the status of the Agency’s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for passthrough entities, establishes subrecipient monitoring and management requirements for pass through entities.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Olympic Area Agency on Aging January 1, 2023 through December 31, 2023 2023-001 The Agency did not have adequate internal controls for ensuring compliance with federal subrecipient monitoring requirements. Assistance Listing Number and Title: 93.391 – COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Federal Grantor Name: Department of Health and Human Services Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Health Pass-through Award/Contract Number: CBO26651, CBO26652 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises program is to lead and coordinate efforts to reduce COVID-19 related health disparities at the community level, improve and increase testing and contract tracing for rural populations, and improve local capacity and services to prevent and control COVID-19 infection and transmission among rural and underserved populations. The Agency spent $323,844 in 2023 in program funds to cover expenditures related to advancing health equity among high-risk populations. The program funds included $264,669 passed through to five subrecipients through seven subawards to fulfill components of the program’s objectives. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. When the Agency passes on federal funds to subrecipients, federal regulations require the Agency to ensure every subaward agreement clearly identifies that it is a federal award and includes the applicable federal requirements. Federal regulations require the Agency to report 14 federal award identification elements in each subaward agreement. When passing federal funding to subrecipients, federal regulations require the Agency to monitor the subrecipients and ensure they comply with the federal award’s terms and conditions. Description of Condition Our audit found the Agency’s internal controls were ineffective for ensuring it included all 14 required elements in its subaward agreements. All subawards were missing the following elements: • Federal Award Identification Number • Federal award date • Subaward budget period start and end date • Assistance Listing Number and program title Additionally, two of the subawards were also missing the subrecipient’s Unique Entity Identifier. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition While the Agency has a subaward template, staff responsible for creating the template did not have adequate training or understanding of these requirements and did not dedicate the necessary time and resources to creating and reviewing the template to ensure it included all required elements. Effect of Condition When subaward agreements do not include the required information, subrecipients are at an increased risk of not knowing they received federal funding and therefore need to comply with specific program requirements, which could lead subrecipients to spend the funds for unallowable purposes or not receive required single audits. The Agency did not provide evidence that it subsequently shared the missing federal award information with the five subrecipients. Recommendation We recommend the Agency ensure it includes all required elements in federally funded subaward agreements. Agency’s Response The Agency takes seriously their responsibility for managing Federal Grant Funds and accordingly will make sure that in the future subrecipient contracts will have the specific elements required by Federal Uniform Guidance in their subcontracts. The agency will institute a Contract Review Checklist and approval process that includes the 14 required elements in the Federal guidance CFR 200.332 in order to clearly identify the source of federal funds in each subaward agreement. The checklist elements will include: • Federal Award Identification Number (FAIN) • Federal Award Date • Subaward budget period start and end date • Assistance Listing Number and Program Title The completed checklist will be reviewed and approved by the Administrative Director or Contracts Director before finalizing the subrecipient agreement. In addition, the Olympic Area Agency on Aging will require contracts and program staff managing federal grants to attend Federal Uniform Guidance Grants Training. Auditor’s Remarks We thank the Agency for its cooperation throughout the audit and the steps it is taking to address these concerns. We will review the status of the Agency’s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for passthrough entities, establishes subrecipient monitoring and management requirements for pass through entities.
Finding 2023-003 Assistance Listing Number: 21.023 Program Title: COVID-19 Emergency Rental Assistance (ERA) Award Number / Year: 1505-0270 / 2023 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Not applicable Criteria: 2 CFR section 200.332(a) requires all subaward contracts contain the required information as documented in 2 CFR section 200.332(a)(1) in order for subrecipients to comply with the award agreement. Condition/Context: Both of the two subawards selected for testing did not contain the required elements found in 2 CFR Part 200.332(a). The sample selected was not statistically valid. Cause: The County's subaward agreement template which contains the required elements was not utilized for this program. Effect: The subaward agreement contracts did not contain the required information; therefore, the subrecipients may not have obtained the appropriate grant information needed to comply with the terms and conditions of the award. Questioned Costs: None noted. Recommendation: We recommend utilizing the County's subaward agreement template to ensure the required information is communicated to subrecipients. In addition, the County should consider providing the required information to the subrecipients retrospectively. Management's Response: The County will create Subrecipient Agreements for all providers that are identified as pass-through entities and amend their contracts to add the agreement to existing contracts.
2023-001 - Internal Controls over Subrecipient Monitoring (SD, NC) Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Catalog Number: 21.027 Federal Agency: U.S. Department of Treasury Category of Finding: Subrecipient Monitoring Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI, Compliance Supplement May 2023, sections 3-M-1 and 3-M-2: A recipient 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. Condition: While the Society currently has policies and procedures for monitoring subrecipients, it does not have a policy specifically relating to subaward agreements between the Society and its subrecipients that is compliant with applicable Federal statutes per 2 CFR part 200, Appendix XI, Compliance Supplement May 2023, sections 3-M-1 and 3-M-2. No formal subaward agreement was drafted by the Society and its subrecipient. Cause: Lack of formal policies specifically addressing federal requirements for subaward agreements. Effect or Potential Effect: Although the Society has existing policies and procedures for monitoring, the absence of a formal subaward agreement compliant with federal regulations may potentially result in the Society sending funds to subrecipients for activities and services that are nonconforming to allowed costs under the Uniform Guidance. Questioned Cost: None Context: During the audit, we did not receive a copy of the subaward between the Society and its subrecipient. Repeat of a Prior-Year Finding: No.
2023-002: Fiscal Monitoring of Subrecipients – Weatherization for Low-Income Persons Federal Program: Weatherization for Low-Income Persons Assistance Listing No.: 81.042 Federal Agency: U.S. Department of Energy Pass-Through Entity: None Federal Award Identification Number: EE0009906/EE0009991 Repeat Finding: This is not a repeat finding Criteria – CFR 200.332 states that 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. Pass-through entities must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals are achieved. Condition – As part of their subrecipient monitoring procedures for the Weatherization program, MaineHousing states in their approved State Weatherization plan that they perform annual fiscal monitoring of all Community Action Agencies (CAA) involved in the Weatherization program. Questioned costs – None. Cause – MaineHousing did not complete a full fiscal monitoring review for seven out of ten CAAs involved in the Weatherization program. Effect or potential effect – There is an increased risk of unallowable expenditures at CAAs that have not undergone a complete fiscal monitoring review. Context – For seven out of ten CAAs involved in the Weatherization program, MaineHousing did not complete a full fiscal monitoring review. The sample was a statistically valid sample. Recommendation – MaineHousing should develop a comprehensive monitoring tracker to ensure that all CAAs involved in the Weatherization program undergo an annual fiscal monitoring review, along with other monitoring milestones laid out in their approved State plan. Views of responsible officials – Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the Summary Schedule of Prior Audit Findings.
2023-001 Finding – Federal Award Type: Subrecipient Monitoring – Non-Compliance and Significant Deficiency in Internal Control Over Compliance. (Partial repeat of finding 2022-02) Identification of Federal Program: Research and Development Cluster: AL Number: 81.086 Conservation Research and Development Program Criteria / Requirement: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR section 200.332, a pass-through entity must clearly identify to the subrecipient the award as a subaward by providing the required federal information related to the award, all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the provisions of contracts and grants agreements. The pass-through entity must evaluate risk of non-compliance of each subrecipient, monitoring the subrecipient and ensuring accountability of for-profit subrecipients. Condition / Context: Forth passed through $1,026,831 in funding to subrecipients under Assistance Listing 81.086. During our audit, we noted that Forth did not have documented written procedures or controls in place to ensure compliance with the U.S. Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) subrecipient monitoring requirements. Improvements were made to subrecipient monitoring in 2023, and a policy was established in 2024. It was noted that within subaward contracts, required federal contract information was provided. Further, subrecipients are being evaluated for risk of non-compliance, prior to engaging in a subcontract. While monitoring has improved, as Forth is having regular meetings to ensure tasks are being completed timely and providing technical assistance when needed, it was noted that in the sample of four subrecipients one subrecipient was subject to 2 CFR Subpart F and the audit for this entity was not obtained. Per 2 CFR 200.332(d)(2) & (3), an entity must ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, highlighting the status of action planned or taken to address Single Audit Finding related to the subaward. Further, they must issue a management decision for applicable audit findings. Cause: Procedures were not in place to ensure that Forth is maintaining proper subrecipient monitoring for each federal subrecipient. Effect: Failure to maintain sufficient subrecipient monitoring may result in the wrongful use of federal funds and non‐compliance with the provisions of applicable requirements of the federal award. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding the contracting and monitoring of subrecipients that are in line with Uniform Guidance requirements, as well as establish organizational controls to ensure that such policies and procedures are being followed. Management’s response: We agree with the auditor’s comments and will implement the following action steps to improve the situation. We will create and document a procedure which ensures we obtain audits on an annual basis from our subrecipients. This procedure will be implemented by October 31, 2024
Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Defense ALN: 12.002 Criteria Internal controls and other compliance knowledge should provide adequate subrecipient monitoring under Federal awards. Per 2 CFR 200.332(d), pass-through entities should "monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved." This would include reviewing financial and performance reports required by the pass-through entity. Pass-through entities must also include certain language in their agreement with the subrecipient, including "that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part;" (2 CFR 200.332(a)(5)), and "Appropriate terms and conditions concerning closeout of the subaward" ((2 CFR 200.332(a)(6)). Condition The Organization provided funds to subrecipients under its direct award from the U.S. Department of Defense. Payments to subrecipients are made on a reimbursement basis, typically on a monthly basis. Context Our audit found the Organization did not include all required elements in the subaward agreements. Additionally, the Organization's internal controls over subrecipient monitoring were inadequate. We found that monitoring activities were inconsistent, and that the Organization was not retaining support of their review of program expenses being claimed by the subrecipient. Our review of the subaward noted that the subrecipients were required to provide invoices for all allowable reimbursable costs. Upon our review of the subrecipient reimbursement, we found that the subrecipients were not including all financial documentation to support their allowable cost reimbursement. The Organization was sporadically reviewing supporting financial documentation to ensure that the expenditures were allowable under the Federal award. The Organization's Apex program manager would meet monthly with subrecipients to discuss the award progress and goals but was sporadically reviewing financial records or reports prior to reimbursing the subrecipient. During our subrecipient monitoring testing, we found that two of the subaward agreements did not include language that would require the subrecipient to permit the pass-through entities and auditors to have access to the subrecipient's records and financial statements, and that there was no language discussing the closeout of the award. We also found that there was an insufficient level of monitoring being done for subrecipient reimbursements. Effect Unallowable activities or cost principles could be charged to the Department of Defense. Cause The error was caused by the Organization's negligence to review the subrecipient's financial records prior to making the reimbursement. Repeat Finding No. Auditor's Recommendation JSP recommends that the Organization includes all required elements in the subrecipient contracts. We also recommend that the Organization reviews subrecipient's financial records and documentation for program expenses, prior to reimbursing the subrecipient with federal funds.
Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Defense ALN: 12.002 Criteria Internal controls and other compliance knowledge should provide adequate subrecipient monitoring under Federal awards. Per 2 CFR 200.332(d), pass-through entities should "monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved." This would include reviewing financial and performance reports required by the pass-through entity. Pass-through entities must also include certain language in their agreement with the subrecipient, including "that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part;" (2 CFR 200.332(a)(5)), and "Appropriate terms and conditions concerning closeout of the subaward" ((2 CFR 200.332(a)(6)). Condition The Organization provided funds to subrecipients under its direct award from the U.S. Department of Defense. Payments to subrecipients are made on a reimbursement basis, typically on a monthly basis. Context Our audit found the Organization did not include all required elements in the subaward agreements. Additionally, the Organization's internal controls over subrecipient monitoring were inadequate. We found that monitoring activities were inconsistent, and that the Organization was not retaining support of their review of program expenses being claimed by the subrecipient. Our review of the subaward noted that the subrecipients were required to provide invoices for all allowable reimbursable costs. Upon our review of the subrecipient reimbursement, we found that the subrecipients were not including all financial documentation to support their allowable cost reimbursement. The Organization was sporadically reviewing supporting financial documentation to ensure that the expenditures were allowable under the Federal award. The Organization's Apex program manager would meet monthly with subrecipients to discuss the award progress and goals but was sporadically reviewing financial records or reports prior to reimbursing the subrecipient. During our subrecipient monitoring testing, we found that two of the subaward agreements did not include language that would require the subrecipient to permit the pass-through entities and auditors to have access to the subrecipient's records and financial statements, and that there was no language discussing the closeout of the award. We also found that there was an insufficient level of monitoring being done for subrecipient reimbursements. Effect Unallowable activities or cost principles could be charged to the Department of Defense. Cause The error was caused by the Organization's negligence to review the subrecipient's financial records prior to making the reimbursement. Repeat Finding No. Auditor's Recommendation JSP recommends that the Organization includes all required elements in the subrecipient contracts. We also recommend that the Organization reviews subrecipient's financial records and documentation for program expenses, prior to reimbursing the subrecipient with federal funds.
Federal Agency: Department of Justice Federal Assistance Listing Number: 16.756 Program: Court Appointed Special Advocates Award Number: 15JDP-21-GK-02762-CASA Criteria: The Uniform Guidance in 2 CFR §200.332 details requirements for pass-through entities in regard to subrecipient monitoring and management. Per 2 CFR §200.332, Requirements for Pass-Through Entities: “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward 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: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient’s unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of federal award date in §200.1 of this part) of award to the recipient by the federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass through entity, including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings Number and Title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the federal awarding agency, including identification of any required financial and performance reports; (4) i. An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the pass-through entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient, which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. ii. The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with §200.405(d). (5) A requirement that the subrecipient permits the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward.” Condition: National CASA/GAL’s subrecipient agreements do not contain a level of specificity to fully comply with federal subrecipient regulations. During our testing of subrecipient monitoring, we selected 16 subrecipient awards. For all awards tested, National CASA/GAL’s subaward agreements did not comply with 2 CFR §200.332, Requirements for Pass-Through Entities, as they do not contain a specific scope of work or project description. Cause: National CASA/GAL did not have the proper policies and procedures in place to ensure subaward agreements complied to relevant federal regulation, and that all required elements are located in subaward agreements, and not in the application or by reference to other documents. Effect or Potential Effect: Without adequate controls in place to ensure conformity with subaward requirements, grantees may not ensure compliance with any award special conditions or revised budgets agreed upon at contract implementation. Questioned Costs: None. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements using a non-statistically valid sample. The population consisted of 79 subawards made totaling to $2,428,200 provided to subrecipients in 2023. The sample consisted of 16 subawards totaling $515,618 provided to subrecipients in 2023. Identification as a Repeat Finding: 2022-005. Recommendation: We recommend establishing and maintaining written policies and procedures to ensure subaward agreements conform to the requirements outlined in 2 CFR §200.332. Views of Responsible Officials: Management agrees that subrecipient agreements in place in 2022 did not fully comply with 2 CFR §200.332. Updates were made to the policies and procedures as well to ensure subaward files contain the requisite components. Management has additionally implemented a Grant Master File Checklist to ensure compliance with terms and conditions required in subaward agreements.
Criteria: 2 CFR 200.332 notes, “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward 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: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency;(v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; …” Condition: All three of the subawards selected for testing, the recipient’s UEI number was missing from the subaward. We consider this condition to be an instance of noncompliance relating to the Subrecipient Monitoring compliance requirement. Statistical sampling was not used in making sample selections. Questioned Costs :N/A Cause and effect: Without communication of the required information, subrecipients may overspend award amounts or incur unallowable expenses towards the grant. Recommendation: We recommend ACT evaluates policies and procedures to ensure all required information is communication with the subrecipient. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
Criteria: 2 CFR 200.332 notes, “All pass-through entities must… (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Condition: The Organization noted they do not request and review audited financial statements for all subrecipients. Questioned Costs: N/A Cause and Effect: Without reviewing audited financial statements, subrecipients may have deficiencies in internal control or compliance which could lead to future unallowable expenditures to be incurred. Recommendation: We recommend ACT evaluates policies and procedures to ensure appropriate monitoring is performed over all subrecipients and reviews audited financial statements for those subrecipients that are required to have an audit performed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
Criteria: 2 CFR 200.332 notes, “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward 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: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency;(v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; …” Condition: All three of the subawards selected for testing, the recipient’s UEI number was missing from the subaward. We consider this condition to be an instance of noncompliance relating to the Subrecipient Monitoring compliance requirement. Statistical sampling was not used in making sample selections. Questioned Costs :N/A Cause and effect: Without communication of the required information, subrecipients may overspend award amounts or incur unallowable expenses towards the grant. Recommendation: We recommend ACT evaluates policies and procedures to ensure all required information is communication with the subrecipient. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
Criteria: 2 CFR 200.332 notes, “All pass-through entities must… (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Condition: The Organization noted they do not request and review audited financial statements for all subrecipients. Questioned Costs: N/A Cause and Effect: Without reviewing audited financial statements, subrecipients may have deficiencies in internal control or compliance which could lead to future unallowable expenditures to be incurred. Recommendation: We recommend ACT evaluates policies and procedures to ensure appropriate monitoring is performed over all subrecipients and reviews audited financial statements for those subrecipients that are required to have an audit performed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
Condition: The ACHD did not communicate to three subrecipients randomly selected for testing all of the information required to be communicated about the subawards. It appears that the ACHD does not have a process in place to communicate such information. The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award. Criteria: The Uniform Guidance indicates that pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and provides a list of the information that should be provided about each subaward (2CRF 200.332 (a)). In addition, the Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, onsite reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2). Cause: The ACHD was not attentive to the audit requirements. Effect: Allegheny County is not in compliance with the federal program subrecipient monitoring requirements. Questioned Costs: none. Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient. Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not communicate to three subrecipients randomly selected for testing all of the information required to be communicated about the subawards. It appears that the ACHD does not have a process in place to communicate such information. The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award. Criteria: The Uniform Guidance indicates that pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and provides a list of the information that should be provided about each subaward (2CRF 200.332 (a)). In addition, the Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, onsite reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2). Cause: The ACHD was not attentive to the audit requirements. Effect: Allegheny County is not in compliance with the federal program subrecipient monitoring requirements. Questioned Costs: none. Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient. Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award. Criteria: The Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2). Cause: The ACHD was not attentive to the audit requirements. Effect: Allegheny County is not in compliance with the federal program requirements. Questioned Costs: none. Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient. Management Response: Management agrees with the finding, see attached Corrective Action Plan.
2023-002: Subrecipient Monitoring - Significant Deficiency Internal Control and Compliance Repeat of Prior Audit Finding 2022-005 Federal Program: Trans-National Crime Federal Agency: U.S. Department of State - Bureau of International Narcotics and Law Enforcement Affairs Federal Assistance Listing Number: 19.705 Federal Award Year: December 31, 2023 Criteria: 2 CFR section 200.303(a) of the Uniform Guidance requires all non-Federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. In addition, 2 CFR section 200.332 requires pass-through entities to monitor the subrecipient, including verifying that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's federal expenditures exceed the threshold. Condition/Context: For the selection of 2 subrecipients, the Corporation did not inquire of the subrecipients to confirm their applicability of an annual Uniform Guidance audit, nor does the Corporation request a copy of the Uniform Guidance audit report to be provided, when applicable. This was not a statistically valid sample. Questioned Costs: Not determinable. Cause: The Corporation's procedures did not include this process as part of its policies and procedures. As a result, the Corporation did not request for an affirmation or a copy of the Uniform Guidance audit to be provided. Consequently, the Corporation did not verify whether the Uniform Guidance audit was applicable to any of its subrecipients. Effect: The Corporation's control design and operation does not provide reasonable assurance that the Corporation is managing the subrecipient monitoring requirements of the Uniform Guidance. Recommendation: We recommend that the Corporation appropriately monitor its subrecipients to ensure that they are being audited in accordance with the Uniform Guidance, when applicable. In the event that such subrecipients do not require a Uniform Guidance audit, the Corporation should obtain and retain supporting documentation such as an affirmation letter from the subrecipients. When a subrecipient is subject to the Uniform Guidance audit, the Corporation should obtain a copy of the related audit report and perform a review of such audit report and note any potential findings that could pertain to the funding that the Corporation provided to such subrecipient. In addition, the Corporation should consider checking the Federal Audit Clearinghouse website to verify if its subrecipients submitted the single audit reporting package in the year that the Corporation funded. View of Responsible Officials: The Corporation will implement a process to obtain single audit affirmation letters from subrecipients annually, if applicable, and confirm as per current understanding and discussions with subrecipients during the due diligence process that their funding from the United States federal government sources during the agreement period will not exceed $750,000 annually. These steps will ensure proper subrecipient monitoring in alignment with federal regulations.
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.
FINDING 2023-005 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2021 Pass-Through Entity: Indiana Department of Health Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Other Matters Condition and Context The County expended $4,727,927 in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) during the audit period. Of that amount, $939,554 was passed through to two subrecipients. As a pass-through entity, the County was required to identify the award and applicable requirements and monitor the subrecipients. Procedures to monitor its subrecipients included reviewing the quarterly financial and performance reports as required by the County through the Subrecipient Agreements. Both subrecipients submitted quarterly reports for Quarter 2 of 2023, covering the time period from April 1 through June 30. No other quarterly financial and performance reports were submitted to the County during the fiscal year. As part of the monitoring the County performed on the subrecipients in March 2023, it noted the subrecipients had been missing quarterly reports. Despite communications made by the County to obtain the missing quarterly reports, no other quarterly reports were submitted by the subrecipients. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.332(d) states in part: "Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing the financial and performance reports required by the pass-through entity. . . ." Cause The County's agreements with the subrecipients included reporting requirements, but no procedures were in place to ensure timely and appropriate reporting occurred. The County's oversight process for monitoring subrecipient financial and performance reporting for the audit period did not include adequate follow-up procedures to ensure that required reports were submitted. Subrecipients did not submit the quarterly reports as requested by the County. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. The lack of sufficient internal controls resulted in the County only receiving one of the required quarterly financial and performance reports from its subrecipients during the year. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. In addition, not meeting the SLFRF subrecipient monitoring requirements increases the likelihood that County officials and the public will not have access to transparent and accurate information regarding expenditures of federal awards. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to ensure that subrecipients are submitting their financial and performance reports timely and accurately, so that the County can comply with the Subrecipient Monitoring compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS - REPORTING Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (ALN Number: 21.027) Federal Agency: Department of Treasury Federal Award Number (or Other Identifying Number): N/A Pass-Through Entity: State Budget Agency Subject – Subrecipient Monitoring – Internal Controls Audit Finding: Significant Deficiency Criteria: Federal regulations 2 CFR section 200.332 (b), (d), (f) and (g) requires the County to: (b) 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 described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. Condition: An effective internal control system was not in place at the County to ensure compliance with requirements related to the grant agreement and the subrecipient monitoring compliance requirement. Questioned Cost: None. Context: During our subrecipient monitoring testing, we saw no formal, documented review of the 2 subrecipient's audit reports selected for testing. Management asserted they reviewed the reports, but there was no formal documented review of the reports noted. The audit reports sampled for testing contained no findings in the reports that would require the County to follow up on. Effect: The failure to establish an effective internal control system placed the County at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the program. Cause: Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the compliance requirements listed above for the full period under audit. Repeat Finding: No. Recommendation: We recommended that the County formally documents their review of the subrecipient audit reports and follow up actions taken on the audit reports as needed. Views of Responsible Officials: Management concurs with this finding. See the corrective action plan.
Finding 2023-002: Federal Funding Accountability and Transparency Act (FFATA) Reporting Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The FFATA Subaward Reporting System (FSRS) is the reporting tool Federal prime awardees use to capture and report subaward and executive compensation data regarding their first tier subawards to meet the FFATA reporting requirements. Prime awardees awarded a Federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $30,000. CFR 200.332(a) states that entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information related to the Federal award project description, as required to be responsive to FFATA. CFR 200.341(c) states that the entity must provide the information required under FFATA to the Federal website established to fulfill the requirements of FFATA, and update or notify any other relevant government wide systems or entities of any indications of poor performance (or issues related to suspension or debarment). Condition: The Global Center has not complied with the aforementioned criteria (we noted no evidence of a FFATA reporting process). Cause: The Global Center does not maintain documented policies regarding FFATA reporting and therefore compliance with Federal regulations cannot be determined. Effect or Potential Effect: Absent proper policies and procedures, the Global Center is at risk of entering into sub-awards under Federal awards that were not properly reported and therefore could result in noncompliance with FFATA requirements. Questioned Costs: None noted Context: The issue appears to be systemic. Identification as a Repeat Finding: Not applicable Recommendation: We recommend the Global Center establish a FFATA reporting policy to become compliant with the aforementioned requirements. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance. In cases where the Global Center is exempt from reporting or qualifies for a reporting waiver, that conclusion should be documented in its subgrantee records.
Finding 2023-002: Federal Funding Accountability and Transparency Act (FFATA) Reporting Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The FFATA Subaward Reporting System (FSRS) is the reporting tool Federal prime awardees use to capture and report subaward and executive compensation data regarding their first tier subawards to meet the FFATA reporting requirements. Prime awardees awarded a Federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $30,000. CFR 200.332(a) states that entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information related to the Federal award project description, as required to be responsive to FFATA. CFR 200.341(c) states that the entity must provide the information required under FFATA to the Federal website established to fulfill the requirements of FFATA, and update or notify any other relevant government wide systems or entities of any indications of poor performance (or issues related to suspension or debarment). Condition: The Global Center has not complied with the aforementioned criteria (we noted no evidence of a FFATA reporting process). Cause: The Global Center does not maintain documented policies regarding FFATA reporting and therefore compliance with Federal regulations cannot be determined. Effect or Potential Effect: Absent proper policies and procedures, the Global Center is at risk of entering into sub-awards under Federal awards that were not properly reported and therefore could result in noncompliance with FFATA requirements. Questioned Costs: None noted Context: The issue appears to be systemic. Identification as a Repeat Finding: Not applicable Recommendation: We recommend the Global Center establish a FFATA reporting policy to become compliant with the aforementioned requirements. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance. In cases where the Global Center is exempt from reporting or qualifies for a reporting waiver, that conclusion should be documented in its subgrantee records.
Finding 2023-002: Federal Funding Accountability and Transparency Act (FFATA) Reporting Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The FFATA Subaward Reporting System (FSRS) is the reporting tool Federal prime awardees use to capture and report subaward and executive compensation data regarding their first tier subawards to meet the FFATA reporting requirements. Prime awardees awarded a Federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $30,000. CFR 200.332(a) states that entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information related to the Federal award project description, as required to be responsive to FFATA. CFR 200.341(c) states that the entity must provide the information required under FFATA to the Federal website established to fulfill the requirements of FFATA, and update or notify any other relevant government wide systems or entities of any indications of poor performance (or issues related to suspension or debarment). Condition: The Global Center has not complied with the aforementioned criteria (we noted no evidence of a FFATA reporting process). Cause: The Global Center does not maintain documented policies regarding FFATA reporting and therefore compliance with Federal regulations cannot be determined. Effect or Potential Effect: Absent proper policies and procedures, the Global Center is at risk of entering into sub-awards under Federal awards that were not properly reported and therefore could result in noncompliance with FFATA requirements. Questioned Costs: None noted Context: The issue appears to be systemic. Identification as a Repeat Finding: Not applicable Recommendation: We recommend the Global Center establish a FFATA reporting policy to become compliant with the aforementioned requirements. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance. In cases where the Global Center is exempt from reporting or qualifies for a reporting waiver, that conclusion should be documented in its subgrantee records.
Finding 2023-002: Federal Funding Accountability and Transparency Act (FFATA) Reporting Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The FFATA Subaward Reporting System (FSRS) is the reporting tool Federal prime awardees use to capture and report subaward and executive compensation data regarding their first tier subawards to meet the FFATA reporting requirements. Prime awardees awarded a Federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $30,000. CFR 200.332(a) states that entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information related to the Federal award project description, as required to be responsive to FFATA. CFR 200.341(c) states that the entity must provide the information required under FFATA to the Federal website established to fulfill the requirements of FFATA, and update or notify any other relevant government wide systems or entities of any indications of poor performance (or issues related to suspension or debarment). Condition: The Global Center has not complied with the aforementioned criteria (we noted no evidence of a FFATA reporting process). Cause: The Global Center does not maintain documented policies regarding FFATA reporting and therefore compliance with Federal regulations cannot be determined. Effect or Potential Effect: Absent proper policies and procedures, the Global Center is at risk of entering into sub-awards under Federal awards that were not properly reported and therefore could result in noncompliance with FFATA requirements. Questioned Costs: None noted Context: The issue appears to be systemic. Identification as a Repeat Finding: Not applicable Recommendation: We recommend the Global Center establish a FFATA reporting policy to become compliant with the aforementioned requirements. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance. In cases where the Global Center is exempt from reporting or qualifies for a reporting waiver, that conclusion should be documented in its subgrantee records.
FINDING 2023-002 Program Information: Substance Abuse and Mental Health Services Projects (ALN #93.243) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management – When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper (2 CFR 200.305(b)(3). M. Subrecipient Monitoring - Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved (2 CFR 200.332(d). Condition: The Organization mistakenly disbursed grant funds to an incorrect local club in fiscal year 2022, resulting in untimely payment of pass-through funds to the correct local club and insufficient subrecipient monitoring over subawards. Cause: Administrative oversight with respect to subrecipient monitoring and cash management. Effect or Potential Effect: The Organization did not ensure the incorrect local club used the subaward for authorized purposes. The Organization did not make timely payment of pass-through funds within 30 days to the correct club. Questioned Costs: Below reportable threshold. Context: The Organization mistakenly disbursed grant funds to an incorrect local club in fiscal year 2022. This club did not incur expenditures in the period of reimbursement, indicating insufficient subrecipient monitoring over subawards. As the Organization did not disburse the funds to the correct club until February 2024, they did not make appropriate payment within 30 calendar days after receipt of the billing as required at 2 CFR 300.305(b)(3). Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its procedures and internal controls with respect to monitoring over subrecipient activities and reimbursement payments. Views of Responsible Officials and Planned Corrective Actions: The Organization will enhance its procedures and internal controls with respect to monitoring subrecipient activities, and reimbursement payments, by working with the State of Montana grantor to ensure local clubs are using subawards for authorized purposes.
FINDING 2023-003 Program Information: COVID-19 Education Stabilization Fund (ALN #84.425C) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR 200.303). M. Subrecipient Monitoring - Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved (2 CFR 200.332(d). Condition: The Organization’s control processes failed to detect unallowable costs included in quarterly reimbursement requests by local club subrecipients. Although these amounts were not approved by the State agency and ultimately were not reimbursed, the Alliance did not have sufficient internal controls in place in order to independently detect unallowable costs submitted by subrecipients and to provide reasonable assurance the Alliance is managing the Federal award in compliance with the award terms. Cause: Lack of sufficient controls in place over subrecipient monitoring, allowable costs, and reporting compliance requirements. Effect or Potential Effect: For 3 out of 3 quarterly reports, the Organization failed to detect unallowable costs requested for reimbursement by local club subrecipients, resulting in inaccurate reporting and insufficient subrecipient monitoring. The control failure was determined to be a material weakness in internal controls over subrecipient monitoring, allowable costs, and reporting compliance requirements. Questioned Costs: None Context: The Organization approved unallowable costs for reimbursement, which demonstrated ineffective management oversight related to subrecipient monitoring, allowable costs, and reporting compliance requirements. As the control failed to detect unallowable costs for all 3 quarters of the grant period during the fiscal year, and there were no compensating controls to mitigate the severity of the deficiency, we determined the control deficiency to be a material weakness. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its procedures and internal controls with respect to subrecipient monitoring, allowable costs, and reporting compliance requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization will enhance its procedures and internal controls with respect to monitoring subrecipient activities, and reimbursement payments, by working with the State of Montana grantor to ensure local clubs are using subawards for authorized purposes.
Finding 2023-001 – Subrecipient Monitoring U.S. Department of Health and Human Services Foster Care Title IV-E – ALN 93.658 Pass-through Agency: Pennsylvania Department of Human Services Program: Foster Care Title IV-E Condition: The County has internal controls in place to monitor subrecipients of Foster Care Title IV-E funding, however, not all required procedures are being performed. The County did not ensure that Foster Care Title IV-E subrecipients were notified via contract or letter of the subaward ALN and amount that was paid during the year. Additionally, the County does not have a formally documented risk assessment process for evaluating subrecipients’ risks of non-compliance. As part of the monitoring process, the County obtained and reviewed annual audit reports for a portion of, but not all of, the subrecipients in a timely manner in order to ensure the subrecipient complied with the Foster Care Title IV-E Instructions and Requirements. Criteria: The Pennsylvania Department of Human Services (PA DHS) requires pass-through entities to evaluate subrecipient risks of noncompliance as part of their subrecipient monitoring procedures. In addition, 2 CFR section 200.332(d) indicates as part of the monitoring process, the pass-through entity should ensure subrecipients take follow-up action on audit deficiencies, which would be identified as part of the review of the annual audit reports of subrecipients. Additionally, 2 CFR section 200.332(a) requires pass-through entities to notify the subrecipient at the time of the subaward of the subaward ALN as well as notify the subrecipient of the amount that was paid during the year. Cause: Procedures are in place over subrecipient monitoring, however the procedures to ensure that subrecipients are notified of their subaward including ALN number and amount are not adequate. The County does not have procedures in place to document the assessment of risk for subrecipients. In addition, the County does not have procedures in place to adequately review all subrecipient audits or notify the subrecipient of the subaward ALN and amount that was paid during the year. Effect: The deficiencies in subrecipient monitoring could result in the County not identifying unallowable expenses being incurred by County subrecipients. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that procedures be implemented to ensure all subrecipients are notified of subawards and implement a process to ensure all subrecipient audits are reviewed and deficiencies be followed up on. In addition, we recommend implementation of procedures to formally document and complete a risk assessment of subrecipients. Based on the risk assessment performed, the County should develop monitoring procedures to address the risks noted, which should include a documented review of subrecipient audits. Questioned Costs: Unknown Views of Responsible Official and Planned Corrective Action: Management agrees with the finding. See separate corrective action plan.
Finding 2023-001 – Subrecipient Monitoring U.S. Department of Health and Human Services Foster Care Title IV-E – ALN 93.658 Pass-through Agency: Pennsylvania Department of Human Services Program: Foster Care Title IV-E Condition: The County has internal controls in place to monitor subrecipients of Foster Care Title IV-E funding, however, not all required procedures are being performed. The County did not ensure that Foster Care Title IV-E subrecipients were notified via contract or letter of the subaward ALN and amount that was paid during the year. Additionally, the County does not have a formally documented risk assessment process for evaluating subrecipients’ risks of non-compliance. As part of the monitoring process, the County obtained and reviewed annual audit reports for a portion of, but not all of, the subrecipients in a timely manner in order to ensure the subrecipient complied with the Foster Care Title IV-E Instructions and Requirements. Criteria: The Pennsylvania Department of Human Services (PA DHS) requires pass-through entities to evaluate subrecipient risks of noncompliance as part of their subrecipient monitoring procedures. In addition, 2 CFR section 200.332(d) indicates as part of the monitoring process, the pass-through entity should ensure subrecipients take follow-up action on audit deficiencies, which would be identified as part of the review of the annual audit reports of subrecipients. Additionally, 2 CFR section 200.332(a) requires pass-through entities to notify the subrecipient at the time of the subaward of the subaward ALN as well as notify the subrecipient of the amount that was paid during the year. Cause: Procedures are in place over subrecipient monitoring, however the procedures to ensure that subrecipients are notified of their subaward including ALN number and amount are not adequate. The County does not have procedures in place to document the assessment of risk for subrecipients. In addition, the County does not have procedures in place to adequately review all subrecipient audits or notify the subrecipient of the subaward ALN and amount that was paid during the year. Effect: The deficiencies in subrecipient monitoring could result in the County not identifying unallowable expenses being incurred by County subrecipients. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that procedures be implemented to ensure all subrecipients are notified of subawards and implement a process to ensure all subrecipient audits are reviewed and deficiencies be followed up on. In addition, we recommend implementation of procedures to formally document and complete a risk assessment of subrecipients. Based on the risk assessment performed, the County should develop monitoring procedures to address the risks noted, which should include a documented review of subrecipient audits. Questioned Costs: Unknown Views of Responsible Official and Planned Corrective Action: Management agrees with the finding. See separate corrective action plan.
Department of Labor Workforce Pathways for Youth, Federal Assistance Listing Number 17.261 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance with Federal Awards Criteria: The Organization should have effective internal controls in place over the submission of FFATA per 2 CFR 200.332. Condition: During the FY2023 Audit, it was noted that the Organization did not submit the necessary FFATA reports. It was noted that the FFATA was completed on August 28, 2024. Context: The Organization did not submit FFATA reports within the required time period for any of their subrecipients. Questioned Costs: N/A Cause/Effect: FFATA report was not submitted within the required time period due to management unintentionally overlooked the requirement as the hiring of the Director of Grants and Compliance during 2023 was subsequent to the execution of the subrecipient agreement and thus the Organization is not in compliance with the grant. Identification of Repeat Finding: N/A Recommendation: The Organization should ensure that it has controls in place to monitor compliance with FFATA reporting. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report.
Finding 2023-006: Foster Care Title IV-E - Subrecipient Monitoring (Significant Deficiency) Federal Programs: Foster Care - Title IV-E and Temporary Assistance for Needy Families Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Pennsylvania Department of Human Services ALN Number: 93.658 Federal Award Year: December 31, 2023 Prior Year Finding: 2022-003 Criteria: 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)). Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and other means. Condition/Context: For two of the four providers monitored during the program’s fiscal year, the County Child and Youth Services department’s results and findings were communicated to the providers at the conclusion of the review procedures, however providers did not submit a written corrective action plan. For one of the providers monitored, results of monitoring could not be located of review. Cause: Providers on-site monitoring was completed and the results were communicated to the providers in writing. Notice that a corrective action plan was needed in response was not given to two of the providers. Effect: Lack of written corrective action plan limits the County Child and Youth Services department’s ability to monitor that the providers takes timely and appropriate action to address deficiencies pertaining to the federal award. Questioned Costs: There are no questioned costs associated with this finding. This is not a statistically valid sample. Recommendation: Providers that receive findings as a result of their on-site monitoring should submit a corrective action plan to the County. Views of Responsible Officials and Planned Corrective Actions: The County Child and Youth Services department started requiring a corrective action plan for all subrecipients with findings as a result of their on-site monitoring in 2023 that include the entity’s plan to correct the errors noted, individual responsible and timeline for corrections to be implemented. Finding noted are for monitoring completed in January and March 2023, prior to the requirement of written corrective action plans being implemented.
Finding Number: 2023-007 Repeat Finding: Yes Type of Finding: Material Weakness in Internal Control and Material Noncompliance Description: Subrecipient Monitoring and Management Major Program: AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement – Direct Award (DHHS) – Award numbers: 1 NU38TO000023-01-00, 6 NU38TO000023- 01-01, 6 NU38OT000257-05-03 and 6 NU38OT000257C3 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Subrecipient Monitoring Condition: The Organization did not comply with any of the subrecipient monitoring and management requirements in accordance with 2 CFR Part 200.332. Criteria: The subrecipient monitoring and management requirements that are codified in 2 CFR Part 200.332 requires the pass-through entity must: a. Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes: 1. Federal award identification; 2. All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; 3. Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. 4. (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: 1. The negotiated indirect cost rate between the pass-through entity and the subrecipient; 2. The de minimis indirect cost rate (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. (iii) 5. A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and 6. Appropriate terms and conditions concerning closeout of the subaward. b. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. c. Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. d. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. 4. The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. e. Depending upon the pass-through entity's assessment of risk posed by the subrecipient, the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: 1. Providing subrecipients with training and technical assistance on program-related matters; and 2. Performing on-site reviews of the subrecipient's program operations; 3. Arranging for agreed-upon-procedures engagements as described in § 200.425. f. Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. g. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. h. Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations. Cause: The Organization’s management was not aware of the subrecipient monitoring and management requirements. Effect: The Organization was not in compliance with any of the subrecipient monitoring and management requirements, resulting in a material noncompliance and a material weakness in internal controls over compliance. Recommendation: We recommend the Organization implement systems and procedures to ensure compliance with the subrecipient monitoring and management compliance requirements. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2023-007 Repeat Finding: Yes Type of Finding: Material Weakness in Internal Control and Material Noncompliance Description: Subrecipient Monitoring and Management Major Program: AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement – Direct Award (DHHS) – Award numbers: 1 NU38TO000023-01-00, 6 NU38TO000023- 01-01, 6 NU38OT000257-05-03 and 6 NU38OT000257C3 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Subrecipient Monitoring Condition: The Organization did not comply with any of the subrecipient monitoring and management requirements in accordance with 2 CFR Part 200.332. Criteria: The subrecipient monitoring and management requirements that are codified in 2 CFR Part 200.332 requires the pass-through entity must: a. Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes: 1. Federal award identification; 2. All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; 3. Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. 4. (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: 1. The negotiated indirect cost rate between the pass-through entity and the subrecipient; 2. The de minimis indirect cost rate (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. (iii) 5. A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and 6. Appropriate terms and conditions concerning closeout of the subaward. b. Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. c. Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. d. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. 4. The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. e. Depending upon the pass-through entity's assessment of risk posed by the subrecipient, the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: 1. Providing subrecipients with training and technical assistance on program-related matters; and 2. Performing on-site reviews of the subrecipient's program operations; 3. Arranging for agreed-upon-procedures engagements as described in § 200.425. f. Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. g. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. h. Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations. Cause: The Organization’s management was not aware of the subrecipient monitoring and management requirements. Effect: The Organization was not in compliance with any of the subrecipient monitoring and management requirements, resulting in a material noncompliance and a material weakness in internal controls over compliance. Recommendation: We recommend the Organization implement systems and procedures to ensure compliance with the subrecipient monitoring and management compliance requirements. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Program Information: Substance Abuse and Mental Health Services Administration (ALN #93.493) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Federal Compliance Requirement: M. Subrecipient Monitoring – The pass-through entity 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). Condition: For 1 out of 4 Clubs selected, the Alliance could not provide evidence that a site visit was performed. Cause: The site visit in question was performed by the prior Alliance Executive Director, who did not transfer the documentation of the site visit to the Alliance before ending her employment there. Effect or Potential Effect: We were unable to independently verify that the site visit was performed and the Alliance complied with subrecipient monitoring requirements. Questioned Costs: None. Context: Through discussion with the Organization’s management, they assert that site visits were performed as required, however, documentation of the site visit was not maintained and we were unable to independently verify that the site visit occurred. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its policies and procedures over subrecipient monitoring to ensure that evidence of monitoring procedures is maintained. Views of Responsible Officials and Planned Corrective Actions: The Alliance performed site visits as required, and will maintain documentation of these going forward to provide verification that these occurred in accordance with the contract and our documented subrecipient monitoring procedures.
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.
Finding 2023-002: Department of Health and Human Services – Research & Development Cluster – ALN #93.394, #93.395, and #93.399 – Subrecipient Monitoring Criteria: 2 CFR section 200.332 requires pass-through entities to evaluate each subrecipient’s risk of noncompliance, monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes and is in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and verify that every subrecipient is audited as required by Subpart F, as necessary. Statement of Condition: No formal documentation existed to indicate that the Foundation performed the required monitoring of its subrecipient’s activity and no written policy exists to establish procedures to document the monitoring of the subrecipient. Cause: The Foundation does not have employees and is operated by a volunteer Board of Directors. Additionally, no formal policies were written to establish procedures to document monitoring of subrecipients. Effect: A failure to monitor a subrecipient's compliance with relevant federal requirements could result in noncompliance with the terms and conditions of the subawards. Subrecipient monitoring was ineffective. Questioned Costs: None. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Foundation establish written policies to document the monitoring of its subrecipient by an individual independent of the subrecipient. This policy should address all required elements of 2 CFR 200.332. Views of Responsible Officials: Management agrees with finding; see separate corrective action plan.