Finding 2023-001 – Reporting Identification of federal program: Assistance Listing No. 93.558 – Temporary Assistance for Needy Families. Criteria or specific requirement: Section 200.332 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for pass-through entities. A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(2); all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition: The Organization was not able to provide executed agreements with its subrecipients covering the period under audit that meet the requirements of Section 200.332 of the Uniform Guidance. Cause: Management indicated that the existing subaward agreements, which do not cover the year ended December 31, 2023, were not updated due to an oversight attributed to personnel vacancies. Effect or potential effect: Noncompliance with Section 200.332 of the Uniform Guidance could result in misunderstanding in program compliance requirements. Questioned cost: not applicable. Context: The Organization was not able to provide executed agreements that cover the audit period for the two subawards made under this program. Recommendation: We recommend that the Organization update and execute agreements with its subrecipients that contains all the required elements of Section 200.332 of the Uniform Guidance. Views of responsible officials: The Organization concurs with this finding. See page 40 for corrective action plan.
Finding 2023-001 – Reporting Identification of federal program: Assistance Listing No. 93.558 – Temporary Assistance for Needy Families. Criteria or specific requirement: Section 200.332 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for pass-through entities. A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(2); all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition: The Organization was not able to provide executed agreements with its subrecipients covering the period under audit that meet the requirements of Section 200.332 of the Uniform Guidance. Cause: Management indicated that the existing subaward agreements, which do not cover the year ended December 31, 2023, were not updated due to an oversight attributed to personnel vacancies. Effect or potential effect: Noncompliance with Section 200.332 of the Uniform Guidance could result in misunderstanding in program compliance requirements. Questioned cost: not applicable. Context: The Organization was not able to provide executed agreements that cover the audit period for the two subawards made under this program. Recommendation: We recommend that the Organization update and execute agreements with its subrecipients that contains all the required elements of Section 200.332 of the Uniform Guidance. Views of responsible officials: The Organization concurs with this finding. See page 40 for corrective action plan.
2023-001 Material Weakness – Subrecipient Monitoring – Material Noncompliance Agency: U.S. Department of Treasury Federal Assistance Listing Number: 21.027 COVID-19 - Coronavirus State and Local Recovery Funds Criteria: 2 CFR 200.332(b) requires a pass-through entity to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. 2 CFR 200.332(d) requires the passthrough entity to 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. Statement of Condition: Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not document their evaluation of the subrecipients risk of noncompliance and perform monitoring of the subrecipient, as required. Questioned Costs: The amount of questioned costs could not be determined. Context: Lutheran Social Services of Wisconsin and Upper Michigan, Inc.’s subrecipient was required by their contract to provide all requests for disbursement from the grantor to Lutheran Social Services of Wisconsin and Upper Michigan, Inc. for review and approval, prior to requesting the funds from the grantor. Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not receive nor did they review the three (3) draw requests during the period. Additionally, no other processes or controls were in place over the subrecipient monitoring requirement. Effect: Failure to adequately monitor the activity of a subrecipient may result in unallowable costs being charged to the federal program. Cause: Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not have proper controls in place to monitor their subrecipient. Management was unaware the subrecipient was expending passthrough funds and receiving disbursements from the federal grantor. Recommendation: We recommend management review their processes and controls surrounding subrecipients to ensure appropriate oversight is maintained and compliance with all program and contract requirements occurs. Management Response: LSS received a grant from Illinois Housing Development Authority (IHDA) which was ‘passed through’ to a tax credit project entity (the subrecipient of the grant). The agreements governing the grant to Lutheran Social Services of Wisconsin and Upper Michigan, Inc. (LSS) and loan to the subrecipient specifically called for multiple layers of review and approval by the subrecipient, IHDA, other project lenders, a title company, and at IHDA’s request, LSS. The lead developer, a member of the tax credit project entity, is responsible for managing the construction project and for preparation of all draw requests. The agreements specifically called for the tax credit project entity (as subrecipient) to certify to LSS that the draw package met the grant agreement requirements and specifications, on which certification LSS would then rely to make a corresponding certification to IHDA that the draw package met the grant agreement requirements and specifications. In this instance, the lead developer properly prepared certain draw requests (as the subrecipient), made the required certifications, and submitted them directly to IHDA without informing LSS of such draw request. Rather than requiring strict compliance with the grant agreements and rejecting the subrecipient’s draw request for the lack of LSS’s certification, IHDA elected to accept a direct certification from the subrecipient and effectively waive the LSS certification requirement. We agree that LSS did not have a monitoring system in place to ensure that the subrecipient informed LSS of draw requests and ensure that LSS’s intervening certification to IHDA be made, however there are other factors impacting the program: 1. IHDA did not notify the subrecipient or LSS under the terms of the grant documents that the intervening LSS certification was missing, and instead elected to disburse proceeds directly to the subrecipient based on the subrecipient’s direct certification which served as a waiver of the requirement of the intervening LSS certification. 2. All draw requests were approved by the contractor, the architect, the construction lender, and the title company, which multiple additional layers of review put into place by LSS and IHDA as part of grant document negotiation ensured that grant funds were properly utilized for qualifying project expenses. 3. All parties have been made aware of this issue and it has not resulted in any financial, operational or reputation implications. We have put in place a process to ensure all draw requests come to LSS for review and documented sign-off approval before submission to IHDA.
2023-001 Material Weakness – Subrecipient Monitoring – Material Noncompliance Agency: U.S. Department of Treasury Federal Assistance Listing Number: 21.027 COVID-19 - Coronavirus State and Local Recovery Funds Criteria: 2 CFR 200.332(b) requires a pass-through entity to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. 2 CFR 200.332(d) requires the passthrough entity to 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. Statement of Condition: Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not document their evaluation of the subrecipients risk of noncompliance and perform monitoring of the subrecipient, as required. Questioned Costs: The amount of questioned costs could not be determined. Context: Lutheran Social Services of Wisconsin and Upper Michigan, Inc.’s subrecipient was required by their contract to provide all requests for disbursement from the grantor to Lutheran Social Services of Wisconsin and Upper Michigan, Inc. for review and approval, prior to requesting the funds from the grantor. Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not receive nor did they review the three (3) draw requests during the period. Additionally, no other processes or controls were in place over the subrecipient monitoring requirement. Effect: Failure to adequately monitor the activity of a subrecipient may result in unallowable costs being charged to the federal program. Cause: Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not have proper controls in place to monitor their subrecipient. Management was unaware the subrecipient was expending passthrough funds and receiving disbursements from the federal grantor. Recommendation: We recommend management review their processes and controls surrounding subrecipients to ensure appropriate oversight is maintained and compliance with all program and contract requirements occurs. Management Response: LSS received a grant from Illinois Housing Development Authority (IHDA) which was ‘passed through’ to a tax credit project entity (the subrecipient of the grant). The agreements governing the grant to Lutheran Social Services of Wisconsin and Upper Michigan, Inc. (LSS) and loan to the subrecipient specifically called for multiple layers of review and approval by the subrecipient, IHDA, other project lenders, a title company, and at IHDA’s request, LSS. The lead developer, a member of the tax credit project entity, is responsible for managing the construction project and for preparation of all draw requests. The agreements specifically called for the tax credit project entity (as subrecipient) to certify to LSS that the draw package met the grant agreement requirements and specifications, on which certification LSS would then rely to make a corresponding certification to IHDA that the draw package met the grant agreement requirements and specifications. In this instance, the lead developer properly prepared certain draw requests (as the subrecipient), made the required certifications, and submitted them directly to IHDA without informing LSS of such draw request. Rather than requiring strict compliance with the grant agreements and rejecting the subrecipient’s draw request for the lack of LSS’s certification, IHDA elected to accept a direct certification from the subrecipient and effectively waive the LSS certification requirement. We agree that LSS did not have a monitoring system in place to ensure that the subrecipient informed LSS of draw requests and ensure that LSS’s intervening certification to IHDA be made, however there are other factors impacting the program: 1. IHDA did not notify the subrecipient or LSS under the terms of the grant documents that the intervening LSS certification was missing, and instead elected to disburse proceeds directly to the subrecipient based on the subrecipient’s direct certification which served as a waiver of the requirement of the intervening LSS certification. 2. All draw requests were approved by the contractor, the architect, the construction lender, and the title company, which multiple additional layers of review put into place by LSS and IHDA as part of grant document negotiation ensured that grant funds were properly utilized for qualifying project expenses. 3. All parties have been made aware of this issue and it has not resulted in any financial, operational or reputation implications. We have put in place a process to ensure all draw requests come to LSS for review and documented sign-off approval before submission to IHDA.
2023-001 Material Weakness – Subrecipient Monitoring – Material Noncompliance Agency: U.S. Department of Treasury Federal Assistance Listing Number: 21.027 COVID-19 - Coronavirus State and Local Recovery Funds Criteria: 2 CFR 200.332(b) requires a pass-through entity to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. 2 CFR 200.332(d) requires the passthrough entity to 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. Statement of Condition: Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not document their evaluation of the subrecipients risk of noncompliance and perform monitoring of the subrecipient, as required. Questioned Costs: The amount of questioned costs could not be determined. Context: Lutheran Social Services of Wisconsin and Upper Michigan, Inc.’s subrecipient was required by their contract to provide all requests for disbursement from the grantor to Lutheran Social Services of Wisconsin and Upper Michigan, Inc. for review and approval, prior to requesting the funds from the grantor. Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not receive nor did they review the three (3) draw requests during the period. Additionally, no other processes or controls were in place over the subrecipient monitoring requirement. Effect: Failure to adequately monitor the activity of a subrecipient may result in unallowable costs being charged to the federal program. Cause: Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not have proper controls in place to monitor their subrecipient. Management was unaware the subrecipient was expending passthrough funds and receiving disbursements from the federal grantor. Recommendation: We recommend management review their processes and controls surrounding subrecipients to ensure appropriate oversight is maintained and compliance with all program and contract requirements occurs. Management Response: LSS received a grant from Illinois Housing Development Authority (IHDA) which was ‘passed through’ to a tax credit project entity (the subrecipient of the grant). The agreements governing the grant to Lutheran Social Services of Wisconsin and Upper Michigan, Inc. (LSS) and loan to the subrecipient specifically called for multiple layers of review and approval by the subrecipient, IHDA, other project lenders, a title company, and at IHDA’s request, LSS. The lead developer, a member of the tax credit project entity, is responsible for managing the construction project and for preparation of all draw requests. The agreements specifically called for the tax credit project entity (as subrecipient) to certify to LSS that the draw package met the grant agreement requirements and specifications, on which certification LSS would then rely to make a corresponding certification to IHDA that the draw package met the grant agreement requirements and specifications. In this instance, the lead developer properly prepared certain draw requests (as the subrecipient), made the required certifications, and submitted them directly to IHDA without informing LSS of such draw request. Rather than requiring strict compliance with the grant agreements and rejecting the subrecipient’s draw request for the lack of LSS’s certification, IHDA elected to accept a direct certification from the subrecipient and effectively waive the LSS certification requirement. We agree that LSS did not have a monitoring system in place to ensure that the subrecipient informed LSS of draw requests and ensure that LSS’s intervening certification to IHDA be made, however there are other factors impacting the program: 1. IHDA did not notify the subrecipient or LSS under the terms of the grant documents that the intervening LSS certification was missing, and instead elected to disburse proceeds directly to the subrecipient based on the subrecipient’s direct certification which served as a waiver of the requirement of the intervening LSS certification. 2. All draw requests were approved by the contractor, the architect, the construction lender, and the title company, which multiple additional layers of review put into place by LSS and IHDA as part of grant document negotiation ensured that grant funds were properly utilized for qualifying project expenses. 3. All parties have been made aware of this issue and it has not resulted in any financial, operational or reputation implications. We have put in place a process to ensure all draw requests come to LSS for review and documented sign-off approval before submission to IHDA.
Finding 2023-002: Pre-Award Risk Assessment for Sub-Recipient Information on the Federal Program: 93.048 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our testing performed over subrecipient expenditures, we were unable to obtain evidence that pre-award risk assessment procedures were performed over subrecipients, consistent with 2 CFR §200.332(b). Cause: The Organization's internal policies and procedures governing risk assessment on subrecipients was not performed. Effect or Potential Effect: The Organization could inadvertently be engaged in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures consisted of substantive testwork over a sample of subrecipients. We consider our sample to be representative of the population. The samples were made using statistical sampling and we believe the condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the Organization follow their internal policies regarding performing a pre-award risk assessment on all new sub-recipients engaged throughout the life of the award. For repeat sub-recipients, the risk assessment should be re-visited throughout the award term to ensure that conditions have not changed and the original risk assessment remains reasonable.
Criteria or specific requirement: The Code of Federal Regulations, 2 CFR 200.332, states that nonfederal entities passing federal awards through to other entities are required to ensure that subawards to subrecipients include required federal award identification and detail of all compliance and other requirements for the federal award. Condition: During our testing we noted that the Company did not include the federally required elements of the award in the subrecipient agreement. Context: For 6 of the 9 subrecipients selected, the Company did not include in their agreements the required federal award information as outlined by 2 CFR 200.332. Cause: Management was made aware of requirements during the award period and created addendums for agreements with subrecipients. For 6 of the 9 subrecipients selected, addendums with the conditions of the award were not created at the time of our review, and the required information was not provided to subrecipients. Effect: The Company is not in compliance with subrecipient monitoring requirements as outlined by 2 CFR 200.332. Recommendation: We recommend the Company to include all guidance under 2 CFR 200.332 in the agreements entered with subrecipients. Views of responsible officials: There is no disagreement with the audit finding. The company has investigated why the information was not provided, and found the cause was an isolated incident, and the error of a former employee who has since been removed from the company. Measures have been put in place to ensure future compliance.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Treasury Passed-through the Colorado Department of Local Affairs FFAL #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Noncompliance Material Weakness in Internal Controls Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient or contractor of the federal award. The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. Once it is determined the recipient is a sub-recipient there are certain requirements for pass-through entities established in 2 CFR 200.332. Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Pass-through entities are required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. Further, the pass-through entity is required to perform certain monitoring activities to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Finally, the pass-through entity should also verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial valuation of risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition: The County did not appropriately identify two subrecipients of the grant and initially determined them to be contractors. The County failed to perform any subrecipient monitoring as required by the Uniform Guidance. Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements, two of subawards were incorrectly identified as contractors and none of the required award and monitoring procedures were performed for the four subrecipients of the grant. Effect: Insufficient procedures and internal controls related to subrecipients resulted in noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. 16 Summit County, Colorado Schedule of Findings and Questioned Costs Year Ended December 31, 2023 Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish and adhere to policies and procedures, including internal controls, to ensure compliance with subrecipient monitoring requirements as established by 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials: Management agrees with the finding.
Finding # 2023-003 Subrecipient Monitoring (Significant Deficiency) Information on the Federal Programs: Assistance Listing #98.001 USAID Foreign Assistance for Programs Overseas Criteria or Specific Requirement: § 200.332, Requirements for pass-through entities, requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. The statute also requires pass-through entities to include certain federal award identifying information within the subaward agreement. Condition: The Institute maintains subaward selection and monitoring policies. However, the policies do not include pre-prescribed monitoring procedures based on an assessed level of risk assigned in the subaward selection stage. Additionally, as part of our audit, we selected a sample of subawards charged to the major federal programs. We noted that a subaward agreement did not contain certain federal award identifying information, specifically the relevant Federal Assistance Listing Number (ALN). Cause: The Institute maintains subaward selection and monitoring policies that do not include preprescribed monitoring procedures based on an assessed level of risk. Additionally, Federal Assistance Listing Number were omitted from the subaward agreements based on an oversight during the subaward writing process. Effect or Potential Effect: The Institute may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Not including Federal Assistance Listing Numbers in the subaward agreement could lead to the subrecipient omitting the subaward from its Schedule of Expenditures of Federal Awards. Questioned Costs: N/A Context: The Institute executes subaward agreements under US Federal grants. Therefore, the Institute is subject to § 200.332 Requirements for pass-through entities. Our audit procedures consisted of testwork completed on subawards charged to the federal awards. The report in which samples were selected was generated directly from the Institute’s general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend that the Institute revise its subaward selection and monitoring policies to include pre-prescribed monitoring procedures based on an assessed level of risk assigned in the subaward selection stage. The assessed level of risk should be documented in a pre-award risk assessment. Additionally, we recommend that the Institute ensure that all subaward agreements include all elements required by §200.332.
Finding # 2023-003 Subrecipient Monitoring (Significant Deficiency) Information on the Federal Programs: Assistance Listing #98.001 USAID Foreign Assistance for Programs Overseas Criteria or Specific Requirement: § 200.332, Requirements for pass-through entities, requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. The statute also requires pass-through entities to include certain federal award identifying information within the subaward agreement. Condition: The Institute maintains subaward selection and monitoring policies. However, the policies do not include pre-prescribed monitoring procedures based on an assessed level of risk assigned in the subaward selection stage. Additionally, as part of our audit, we selected a sample of subawards charged to the major federal programs. We noted that a subaward agreement did not contain certain federal award identifying information, specifically the relevant Federal Assistance Listing Number (ALN). Cause: The Institute maintains subaward selection and monitoring policies that do not include preprescribed monitoring procedures based on an assessed level of risk. Additionally, Federal Assistance Listing Number were omitted from the subaward agreements based on an oversight during the subaward writing process. Effect or Potential Effect: The Institute may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Not including Federal Assistance Listing Numbers in the subaward agreement could lead to the subrecipient omitting the subaward from its Schedule of Expenditures of Federal Awards. Questioned Costs: N/A Context: The Institute executes subaward agreements under US Federal grants. Therefore, the Institute is subject to § 200.332 Requirements for pass-through entities. Our audit procedures consisted of testwork completed on subawards charged to the federal awards. The report in which samples were selected was generated directly from the Institute’s general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend that the Institute revise its subaward selection and monitoring policies to include pre-prescribed monitoring procedures based on an assessed level of risk assigned in the subaward selection stage. The assessed level of risk should be documented in a pre-award risk assessment. Additionally, we recommend that the Institute ensure that all subaward agreements include all elements required by §200.332.
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
Finding 2023-001: Subrecipient Pre-award Risk Assessment Information on the Federal Programs: All Programs Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: During our testing of subawards, we were unable to verify that pre-award risk assessment procedures were performed. We additionally noted that these requirements were not incorporated into the Organizations' current policies and procedures. Cause: The Organizations do not have a formal internal policy with respect to performing subaward risk assessments as required by Federal regulation at the execution of the subaward agreements or on a regular basis. Effect or Potential Effect: The Organizations may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Organizations execute subaward agreements under US Federal grants. Therefore, the Organizations are subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of testwork completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Organizations' general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: N/A Recommendation: We recommend the Organizations develop a subaward policy to ensure the risk assessment procedures over its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Organizations should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend the Organizations require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately. Recommended factors to consider when developing a policy are as follows: Refer to 2 CFR 200.331 part (a) for complete listing of data elements that are required to be included in every subaward, and incorporate this listing into the updated policies and procedures. Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, medium or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.).
FINDING 2023-002 Program Information: Temporary Assistance for Needy Families (ALN #93.558) 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: The Organization did not have sufficient monitoring processes in place to detect erroneous costs charged to the TANF grant. Cause: Lack of administrative oversight with respect to subrecipient monitoring requirements. Effect or Potential Effect: The Organization was not in compliance with subrecipient monitoring requirements. Questioned Costs: Amount below reportable threshold. Context: For 1 of 22 invoices the Organization did not perform sufficient subrecipient monitoring procedures to detect erroneous costs charged by the subrecipient. 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 properly detect and prevent erroneous calculations. Views of Responsible Officials and Planned Corrective Actions: The Organization will properly monitor the subaward disbursed to provide reasonable assurance the subrecipient used the subaward for authorized purposes.
Finding 2023-002: Subrecipient Monitoring - Review of Audit Reports Information on the Federal Program: Assistance Listing Numbers 19.705 and 19.345 Criteria: As stated in 2 CFR 200.332(f), all pass-through entities must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold for triggering such an audit. Condition: We were unable to determine whether Accountability Lab performed procedures to verify whether or not its subrecipients were subject to a compliance audit in accordance with 2 CFR 200 Subpart F. Cause: Accountability Lab does not have a formal/regularized process in place to monitor subrecipient audit requirements. Effect: Accountability Lab's current practices do not provide sufficient documentation to demonstrate its compliance with the requirements to obtain and review subrecipient audit reports. Questioned Costs: None noted. Context: Our audit work included three subrecipients across two major programs. For two out of the three subrecipients tested, we were not able to verify whether or not Accountability Lab obtained and reviewed the subrecipient audit reports. Identification as a Repeat Finding: Not applicable. Recommendation: Accountability Lab should implement a "Review of Subrecipient Audit" form, to be completed annually for each subrecipient that receives U.S. Government funding. The form should document a) the subrecipient's name; b) the annual amount of U.S. Government funds expended by the subrecipient; c) whether the subrecipient was subject to a U.S. Government compliance audit under 2 CFR 200 Subpart F; and d) Accountability Lab's formal review of the audit report as well as its conclusions and follow up on any reported findings, if applicable.
Finding 2023-002: Subrecipient Monitoring - Review of Audit Reports Information on the Federal Program: Assistance Listing Numbers 19.705 and 19.345 Criteria: As stated in 2 CFR 200.332(f), all pass-through entities must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold for triggering such an audit. Condition: We were unable to determine whether Accountability Lab performed procedures to verify whether or not its subrecipients were subject to a compliance audit in accordance with 2 CFR 200 Subpart F. Cause: Accountability Lab does not have a formal/regularized process in place to monitor subrecipient audit requirements. Effect: Accountability Lab's current practices do not provide sufficient documentation to demonstrate its compliance with the requirements to obtain and review subrecipient audit reports. Questioned Costs: None noted. Context: Our audit work included three subrecipients across two major programs. For two out of the three subrecipients tested, we were not able to verify whether or not Accountability Lab obtained and reviewed the subrecipient audit reports. Identification as a Repeat Finding: Not applicable. Recommendation: Accountability Lab should implement a "Review of Subrecipient Audit" form, to be completed annually for each subrecipient that receives U.S. Government funding. The form should document a) the subrecipient's name; b) the annual amount of U.S. Government funds expended by the subrecipient; c) whether the subrecipient was subject to a U.S. Government compliance audit under 2 CFR 200 Subpart F; and d) Accountability Lab's formal review of the audit report as well as its conclusions and follow up on any reported findings, if applicable.
Finding 2023-002: Subrecipient Monitoring - Review of Audit Reports Information on the Federal Program: Assistance Listing Numbers 19.705 and 19.345 Criteria: As stated in 2 CFR 200.332(f), all pass-through entities must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold for triggering such an audit. Condition: We were unable to determine whether Accountability Lab performed procedures to verify whether or not its subrecipients were subject to a compliance audit in accordance with 2 CFR 200 Subpart F. Cause: Accountability Lab does not have a formal/regularized process in place to monitor subrecipient audit requirements. Effect: Accountability Lab's current practices do not provide sufficient documentation to demonstrate its compliance with the requirements to obtain and review subrecipient audit reports. Questioned Costs: None noted. Context: Our audit work included three subrecipients across two major programs. For two out of the three subrecipients tested, we were not able to verify whether or not Accountability Lab obtained and reviewed the subrecipient audit reports. Identification as a Repeat Finding: Not applicable. Recommendation: Accountability Lab should implement a "Review of Subrecipient Audit" form, to be completed annually for each subrecipient that receives U.S. Government funding. The form should document a) the subrecipient's name; b) the annual amount of U.S. Government funds expended by the subrecipient; c) whether the subrecipient was subject to a U.S. Government compliance audit under 2 CFR 200 Subpart F; and d) Accountability Lab's formal review of the audit report as well as its conclusions and follow up on any reported findings, if applicable.
Finding: Subrecipient Monitoring Federal Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Department of Treasury Award Number - ERAE0226, Award Year 2021 Criteria: According to 2 CFR Part 200.332 - All pass through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and include various required 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. In addition, 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. Finally, the pass through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, is in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: During testing, we noted the following: - The Assistance Listings number and Title were not provided to the County's two subrecipients in accordance with 2 CFR Part 200.332(a) - The County did not have a formal documented risk assessment completed for either of the County's two subrecipients in accordance with 2 CFR Part 200.332(b) - The County did not obtain or review one of the subrecipients single audit reports in accordance with 2 CFR Part 200.332(f) Questioned costs: None. Context: We tested the County's two subrecipients receiving $1,075,000 in subrecipient awards for the year ended December 31, 2023 and noted the issues above. A non-statistical sampling methodology was used to select the sample. Effect: The subrecipient may be unaware whether the funds are federal or what compliance requirements they are responsible for following. In addition, The County may not perform the adequate level of monitoring as formal risk assessments were not completed. Finally, the County did not review the single audit report and while any finding would not directly be related to the subaward program, failure to review such reports and take appropriate action could result in non-compliance by the subrecipient continuing for an inappropriate length of time. Cause: The County does not have adequate internal controls over subrecipient monitoring to ensure that the County is in compliance with subrecipient monitoring requirements. Identification as a repeat finding: Not applicable. Recommendation: We recommend that the County develop a risk assessment template or form to be completed over each federal subrecipient. The County should provide training to those administering grants over the development risk assessment template or form and the associated monitoring to be performed based on each assessed risk. In addition, the County should develop a subrecipient grant template to help ensure all required information is included within each award. Finally, the County should establish a policy or procedure over obtaining and reviewing audits completed over each of their subrecipients. Views of responsible officials: The County agrees with the finding. See separate auditee document for planned corrective actions.
Finding Number: 2023-001 Internal Control over Compliance and Compliance with the Subrecipient Monitoring Compliance Requirement, Repeat Finding, Finding No. 2022-001 Identification of the Major Federal Program: Programs: Government Agency: Inclusion Across the Nation of Communities of Learners of Underrepresented Discoverers in Engineering and Science Assistance Listing Number: 47.076 Award Number: HRD-1834540 Award Years: 09/01/2018 – 02/28/2025 PhysTEC: Building a Solution to the National Physics Teacher Shortage Assistance Listing Number: 47.049 Award Number: PHY-1707990 Award Years: 07/01/2017 – 06/30/2023 National Science Foundation (NSF) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. reviewing financial and programmatic (performance and special reports) required by the PTE; 2. following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means; 3. issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions – Our examination of the program’s subrecipient monitoring requirements includes the review and approval of financial and performance quarterly reports by the program managers. The quarterly reports are prepared by APS’ grants administrator with inputs provided by the subrecipient submitted to the program managers. Of the program’s twenty (20) subrecipients, we examined eight (8) subrecipients and observed that although the respective program managers had monitoring oversight of the various grant’s financial and programmatic activities, there was no formal evidentiary documentation to support the monitoring oversight process performed by the program managers. Furthermore, our examination of the program’s subrecipient monitoring requirements includes follow-ups by APS to ensure the subrecipients take timely and appropriate action on all deficiencies pertaining to federal awards provided to the subrecipients which have been detected through reviews of audits, on-site reviews, and other means. We selected six (6) subrecipients for testing and noted that for two (2) samples selected APS was unable to provide evidence that it monitored the subrecipients through review of its single audit reports, on-site reviews, and other means. We also tested a sample of three (3) subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds timely and on one (1) of the sub awards reported, the contract award amount reported is less than the actual expenditures incurred by the subrecipient. APS began implementation of its corrective action plan on June 5, 2023, and the exceptions identified above is as a result of the fact that APS was still in the implementation process of its corrective action plan. Cause - Management does not have adequate internal controls and policies and procedures in place to ensure that a review is performed on the financial and programmatic reports in a timely manner and to ensure that its subrecipients do not have any audit deficiencies relating to federal award programs and if any deficiencies are detected, that the subrecipients takes timely and appropriate action to resolve the deficiencies identified. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS’ noncompliance with the reporting requirements. Effect or potential effect – APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. In addition, failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs – None. Context – These are conditions identified per review of APS compliance with specified compliance requirements using a statistically valid sample. Recommendations – BDO recommends that APS continue to apply the implemented policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are documented and maintained. Furthermore, APS should continue to implement policies to obtain and review single audit reports of its subrecipients in order to ensure compliance with all the required laws, guidelines and requirement under the award. BDO recommends that APS continues to implement established policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS’ corrective action is described in the Management’s Corrective Action Plan included below.
Finding Number: 2023-001 Internal Control over Compliance and Compliance with the Subrecipient Monitoring Compliance Requirement, Repeat Finding, Finding No. 2022-001 Identification of the Major Federal Program: Programs: Government Agency: Inclusion Across the Nation of Communities of Learners of Underrepresented Discoverers in Engineering and Science Assistance Listing Number: 47.076 Award Number: HRD-1834540 Award Years: 09/01/2018 – 02/28/2025 PhysTEC: Building a Solution to the National Physics Teacher Shortage Assistance Listing Number: 47.049 Award Number: PHY-1707990 Award Years: 07/01/2017 – 06/30/2023 National Science Foundation (NSF) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. reviewing financial and programmatic (performance and special reports) required by the PTE; 2. following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means; 3. issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions – Our examination of the program’s subrecipient monitoring requirements includes the review and approval of financial and performance quarterly reports by the program managers. The quarterly reports are prepared by APS’ grants administrator with inputs provided by the subrecipient submitted to the program managers. Of the program’s twenty (20) subrecipients, we examined eight (8) subrecipients and observed that although the respective program managers had monitoring oversight of the various grant’s financial and programmatic activities, there was no formal evidentiary documentation to support the monitoring oversight process performed by the program managers. Furthermore, our examination of the program’s subrecipient monitoring requirements includes follow-ups by APS to ensure the subrecipients take timely and appropriate action on all deficiencies pertaining to federal awards provided to the subrecipients which have been detected through reviews of audits, on-site reviews, and other means. We selected six (6) subrecipients for testing and noted that for two (2) samples selected APS was unable to provide evidence that it monitored the subrecipients through review of its single audit reports, on-site reviews, and other means. We also tested a sample of three (3) subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds timely and on one (1) of the sub awards reported, the contract award amount reported is less than the actual expenditures incurred by the subrecipient. APS began implementation of its corrective action plan on June 5, 2023, and the exceptions identified above is as a result of the fact that APS was still in the implementation process of its corrective action plan. Cause - Management does not have adequate internal controls and policies and procedures in place to ensure that a review is performed on the financial and programmatic reports in a timely manner and to ensure that its subrecipients do not have any audit deficiencies relating to federal award programs and if any deficiencies are detected, that the subrecipients takes timely and appropriate action to resolve the deficiencies identified. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS’ noncompliance with the reporting requirements. Effect or potential effect – APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. In addition, failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs – None. Context – These are conditions identified per review of APS compliance with specified compliance requirements using a statistically valid sample. Recommendations – BDO recommends that APS continue to apply the implemented policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are documented and maintained. Furthermore, APS should continue to implement policies to obtain and review single audit reports of its subrecipients in order to ensure compliance with all the required laws, guidelines and requirement under the award. BDO recommends that APS continues to implement established policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS’ corrective action is described in the Management’s Corrective Action Plan included below.
Federal Agency: U.S. Department of Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agency: Indiana Finance Authority Pass-Through Number: Unknown Type of Finding: • Significant deficiency and noncompliance Criteria or Specific Requirement – Subrecipient Monitoring: Pursuant to 2 CFR § 200.331, non-Federal entities can award subawards for the purpose of carrying out a portion of a federal award and creates a federal assistance relationship with the subrecipient. In addition, pursuant to 2 CFR § 200.332, the non-Federal entity must identify to the subrecipient as a subaward and includes the Federal award identification. The non-Federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, incompliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The County could not provide support that it had sufficient review of the subrecipient during the year on a consistent basis. The County had not properly designed or implemented a system of internal controls that would likely be effective in preventing, detecting, and correcting, noncompliance. Questioned Costs: None Context: It was noted that the file selected for testing did not have documented evidence supporting that the County had sufficient monitoring and communication of the subrecipient. From a population of three files, one was selected for testing. Our sample was not intended to be statistically valid. Effect: The County was unable to support that the subrecipients were being monitored. Cause: Failure to maintain sufficient monitoring of the subrecipient Identification as a Repeat Finding: Yes, 2022-003 Recommendation: We recommend the County maintain adequate communication and documentation with the subrecipients to ensure compliance with the subrecipients requirement. This documentation could include a quarterly communication, receipt of the audited financial statements and single audit report, if applicable. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agency: U.S. Department of Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agency: Indiana Finance Authority Pass-Through Number: Unknown Type of Finding: • Significant deficiency and noncompliance Criteria or Specific Requirement – Subrecipient Monitoring: Pursuant to 2 CFR § 200.331, non-Federal entities can award subawards for the purpose of carrying out a portion of a federal award and creates a federal assistance relationship with the subrecipient. In addition, pursuant to 2 CFR § 200.332, the non-Federal entity must identify to the subrecipient as a subaward and includes the Federal award identification. The non-Federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, incompliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The County could not provide support that it had sufficient review of the subrecipient during the year on a consistent basis. The County had not properly designed or implemented a system of internal controls that would likely be effective in preventing, detecting, and correcting, noncompliance. Questioned Costs: None Context: It was noted that the file selected for testing did not have documented evidence supporting that the County had sufficient monitoring and communication of the subrecipient. From a population of three files, one was selected for testing. Our sample was not intended to be statistically valid. Effect: The County was unable to support that the subrecipients were being monitored. Cause: Failure to maintain sufficient monitoring of the subrecipient Identification as a Repeat Finding: Yes, 2022-003 Recommendation: We recommend the County maintain adequate communication and documentation with the subrecipients to ensure compliance with the subrecipients requirement. This documentation could include a quarterly communication, receipt of the audited financial statements and single audit report, if applicable. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
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.