Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information as required in 2 CFR 200.332(b). Condition and Context During our audit, we tested a sample of two subrecipients for each assistance listing number in order to determine if the subrecipient agreements contained all required elements per 2 CFR 200.332(b) and ensure sufficient subrecipient monitoring procedures were performed. As a result of our testing, it was identified that the agreements tested did not contain the subrecipient’s unique entity identifier, federal award identification number, federal award date, assistance listing title, assistance listing number, dollar amount available under each federal award and assistance listing number at the time of disbursement, and approved indirect cost rate. Cause The Organization did not have adequate controls in place to ensure all required elements were included in subrecipient agreements. Effect or Potential Effect Due to the weakness in internal controls and compliance finding noted above, the Organization did not comply with the requirements of the Uniform Guidance regarding communication to subrecipients all the specified elements in 2 CFR 200.332. No questioned costs are reported as this requirement is administrative in nature. Recommendation The Organization should address the weakness noted above and update its subrecipient agreements, policies, and procedures to ensure that all required elements are present to comply with the Uniform Guidance. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information as required in 2 CFR 200.332(b). Condition and Context During our audit, we tested a sample of two subrecipients for each assistance listing number in order to determine if the subrecipient agreements contained all required elements per 2 CFR 200.332(b) and ensure sufficient subrecipient monitoring procedures were performed. As a result of our testing, it was identified that the agreements tested did not contain the subrecipient’s unique entity identifier, federal award identification number, federal award date, assistance listing title, assistance listing number, dollar amount available under each federal award and assistance listing number at the time of disbursement, and approved indirect cost rate. Cause The Organization did not have adequate controls in place to ensure all required elements were included in subrecipient agreements. Effect or Potential Effect Due to the weakness in internal controls and compliance finding noted above, the Organization did not comply with the requirements of the Uniform Guidance regarding communication to subrecipients all the specified elements in 2 CFR 200.332. No questioned costs are reported as this requirement is administrative in nature. Recommendation The Organization should address the weakness noted above and update its subrecipient agreements, policies, and procedures to ensure that all required elements are present to comply with the Uniform Guidance. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2023-002 Compliance and Internal Controls over Subrecipient Fiscal Monitoring (Significant Deficiency) (Repeat) U.S. Department of Health and Human Services 93.917 – HIV Care Formula Grants Passed through Texas Department of State Health Services Award Periods: April 1, 2022 to March 31, 2024 Contract No. HHS001022300001 Texas Department of State Health Services HIV Care Formula Grants Award Periods: April 1, 2022 to March 31, 2024 Contract No. HHS001022300001 Texas Department of State Health Services State HIV Service Grants Award Periods: April 1, 2022 to August 31, 2024 Contract No. HHS001022300002 Criteria: Pass-through entities are required to monitor subrecipients in accordance with 2 CFR Section 200.332. Further, under 2 CFR Section 200.303a, non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statutes, regulations, and the terms and conditions of the award. Condition: For the fiscal year ended December 31, 2023, The Resource Group did not timely perform financial monitoring of its subrecipients. Cause: Initially subrecipient monitoring was suspended due to COVID-19 in 2020 and reinstated late 2021. The Resource Group restarted their monitoring of subrecipients, however the monitoring was done by two individuals, one for programming and the other for financial monitoring. Monitoring of programming was completed timely, while the financial monitoring was not. Further, the Finance Director, who was responsible for the financial monitoring, resigned in 2023 and the successor Finance Director was hired in August 2023. After completing training to perform financial monitoring, the Finance Director completed financial monitoring during 2024. Effect: As a result of not completing all financial monitoring and the turnover in Finance Director, The Resource Group is not in compliance with grant requirements. Questioned Costs: None Noted Recommendation: The Resource Group should follow its policies to perform fiscal monitoring on its subrecipients in accordance with 2 CFR Section 200.332. Views of Responsible Officials: See corrective action plan.
2023-002 Subrecipient Monitoring Public Health Training Centers Program – Assistance Listing No. 93.516 Award Number: 1 T29HP46735‐01‐00 – Award Period: September 15, 2022 through September 14, 2025 Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health – Assistance Listing No. 93.967 Award Number: G2513_AG-1146 Amendment #1 – Award Period: February 1, 2023 through November 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: During our testing of subrecipients, we noted documentation was not maintained demonstrating the Organization checked for suspension and debarment prior to contracting with subrecipients, subrecipient vs contractor determinations, evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring, or obtaining/reviewing the most recent single audit reports for subrecipients to address findings related to a particular subaward. Criteria: According to 2 CFR 200.331, pass-through entities 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. 2 CFR 200.332 requires every subaward agreement include certain information including the subrecipient’s unique entity identifier (see paragraph (a) for a list of all required data elements); additionally, all pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in § 200.425. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations. 2 CFR 180.22 requires that contract awards not be made to parties listed on the government wide exclusions in the system for Award Management, which contains the names of parties debarred, suspended or otherwise excluded by agencies as well as parties declared ineligible under statutory or regulatory authority. Questioned Costs: None. Cause: The Organization did not have a process in place to ensure all required elements of subrecipient monitoring were documented and retained in their records. Effect: Inadequate monitoring procedures and records may not detect subrecipient noncompliance on a timely basis. This could result in the Organization entering into subrecipient agreements with organizations who are ineligible to receive federal funds or might otherwise not comply with federal laws and regulations. Recommendation: We recommend that management implement procedures to ensure that future subrecipient agreements are compared against all requirements in 2 CFR 200.331, 2 CFR 200.332, and 2 CFR 180.22 and that formal documentation of such considerations be maintained. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
2023-004 – Subrecipient Monitoring Program: ALN# 47.070 = Computer and Information Science and Engineering Grant #: 2216614, 2122756, Grant Period: Year Ended December 31, 2023 Government Agency: National Science Foundation Criteria: Per 2 CFR 200.331–200.332, pass-through entities must: • Evaluate each subrecipient’s risk of noncompliance to determine appropriate monitoring. • Monitor subrecipient activities to ensure compliance with Federal statutes, regulations, and program requirements, including reviewing financial and performance reports. • Verify subrecipients have audits as required under Subpart F. • Issue management decisions on subrecipient audit findings. • Maintain documentation of monitoring activities. Condition: During our testing of subrecipient monitoring, we noted that the Organization did not document required monitoring procedures for the subrecipients selected for testing. Specifically: • No documented risk assessments were performed prior to awarding funds. • The Organization did not obtain or review subrecipient Single Audit reports or written assurances of audit compliance. • Subrecipient agreements did not consistently include all required elements under 2 CFR 200.332(a). Informal monitoring was performed, but not to the level required by the Uniform Guidance. Cause: The Organization does not have adequate internal controls or documented procedures to ensure all required subrecipient monitoring tasks are consistently completed and retained. Personnel indicated that monitoring controls are informal and not centralized. Effect: Failure to perform required subrecipient monitoring increases the risk that Federal funds may be misused, unallowable, or spent in violation of program requirements without detection. Questioned Costs: No questioned costs identified. Context: This sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendation: We recommend that the Organization: • Develop and implement formalized subrecipient monitoring policies and procedures aligned with 2 CFR 200.332. • Perform and document risk assessments for all subrecipients. • Obtain and review Single Audit reports, as applicable, and issue written management decisions. • Conduct and document ongoing monitoring activities (e.g., financial/performance report reviews, site visits). • Maintain complete monitoring documentation in a centralized and accessible location. Views of Responsible Officials: See management corrective action plan attached.
Finding 2023-006: Foster Care Title IV-E - Subrecipient Monitoring (Significant Deficiency) Federal Programs: Foster Care - Title IV-E and Temporary Assistance for Needy Families Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Pennsylvania Department of Human Services ALN Number: 93.658 Federal Award Year: December 31, 2023 Prior Year Finding: 2022-003 Criteria: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and other means. Condition/Context: For two of the four providers monitored during the program’s fiscal year, the County Child and Youth Services department’s results and findings were communicated to the providers at the conclusion of the review procedures, however providers did not submit a written corrective action plan. For one of the providers monitored, results of monitoring could not be located of review. Cause: Providers on-site monitoring was completed and the results were communicated to the providers in writing. Notice that a corrective action plan was needed in response was not given to two of the providers. Effect: Lack of written corrective action plan limits the County Child and Youth Services department’s ability to monitor that the providers takes timely and appropriate action to address deficiencies pertaining to the federal award. Questioned Costs: There are no questioned costs associated with this finding. This is not a statistically valid sample. Recommendation: Providers that receive findings as a result of their on-site monitoring should submit a corrective action plan to the County. Views of Responsible Officials and Planned Corrective Actions: The County Child and Youth Services department started requiring a corrective action plan for all subrecipients with findings as a result of their on-site monitoring in 2023 that include the entity’s plan to correct the errors noted, individual responsible and timeline for corrections to be implemented. Finding noted are for monitoring completed in January and March 2023, prior to the requirement of written corrective action plans being implemented.
Significant deficiency in internal control over compliance related to subrecipient monitoring Federal Agency: Department of Health and Human Services Program Title: Social Services Research and Demonstration Program Assistance Listing Number: 93.647 Project Number: 90XP0459-01-00 Award Period: August 31, 2022 – August 30, 2023 Criteria Title 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), specifically 2 CFR 200.332, requires pass-through entities to clearly identify every subaward as a subaward and include specific information in the subrecipient agreement at the time of the subaward. This includes the Assistance Listing number (formerly CFDA number) and the federal award name (title), as well as other key elements. If this information is not available at the time of the subaward, the pass-through entity must provide the best information available and update the subrecipient when the correct information becomes available. These requirements are intended to ensure subrecipients can properly identify the federal program and comply with all applicable requirements under the award, including compliance with federal statutes, regulations, and the terms and conditions of the agreement, as well as the evaluation of each subrecipient’s risk of noncompliance and review of the results of a subrecipient’s annual Single Audit, if required. Condition The Organization’s subaward agreements do not clearly identify all Federal award information and other terms as required—such as the Assistance Listing number, federal award name, and other key elements—in subrecipient agreements at the time of the subaward. Cause The Organization’s subrecipient monitoring policies and procedures were not sufficient to ensure all required subaward terms were included. Effect or Potential Effect For the two subrecipient selected for testing, the Organization’s subaward agreements do not have the correct documentation required to be in compliance with 2 CFR 200.332. Questioned Costs Not applicable. Recommendation We recommend that management develop and formalize procedures to ensure all subawards are clearly identified and that all required information is included in subrecipient agreements at the time of the award. Views of Responsible Officials Management concurs with the finding and has provided the accompanying management corrective action plan.
Finding 2023-012—Subrecipient Monitoring Material Weakness Federal Program: All federal awards. Criteria: Under 2 CFR 200.302(b), the entity must maintain internal controls to ensure tracking, collection, and resolution of amounts owed by subrecipients (e.g., repayments, questioned costs, overpayments, or unallowable costs). In addition, under 2 CFR 200.331(d) and 200.332, pass-through entities must: • Monitor subrecipient activities to ensure federal funds are used for authorized purposes. • Ensure subrecipients take timely and appropriate action on deficiencies, including financial issues. • Review financial and performance reports. Finding 2023-012—Subrecipient Monitoring (Continued) • Verify that subrecipients have audits as required; follow up on any audit findings or amounts due to the pass-through entity. Condition: During our audit of IFDC’s subrecipient monitoring procedures, we identified that IFDC did not provide the support of the subgrantee annual reports and evidence of timely follow up. Cause: IFDC does not have formal written procedures requiring appropriate monitoring procedures to ensure that subrecipients are providing the necessary documentation for appropriate risk assessment and monitoring. Effect: Noncompliance with 2 CFR 200.331. In addition, there is weak oversight of federal funds passed through to subrecipients and potential material misstatement of subrecipient expenditures on the Schedule of Expenditures of Federal Awards (SEFA). Questioned costs: None noted. Context: IFDC passed through approximately $5 million to 25 subrecipients during the fiscal year and there was no evidence of timely receipt of the annual audits of each subrecipient. Management provided emails showing there was communication but there is no formal policy to require timely follow up and appropriate documentation. Repeat Finding: No Recommendation: IFDC should establish formal policies and procedures for subrecipient risk assessment and monitoring under 2 CFR 200.331. Views of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan.
Finding 2023-003: 21.027 - Coronavirus State and Local Fiscal Recovery Funds:COVID-19 - Material Weakness Compliance Requirement: Reporting and Subrecipient Monitoring Criteria: In accordance with the Federal Funding Accountability and Transparency Act (FFATA), as implemented by 2 CFR Part 170, recipients of Federal awards are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) in a timely and complete manner. Additionally, pursuant to 2 CFR Part 200, including §200.332 (Requirements for Pass-Through Entities) and §200.214 (Suspension and Debarment), pass-through entities are required to establish and maintain procedures to monitor subrecipients to ensure Federal awards are used for authorized purposes and in compliance with laws, regulations, and award provisions. These responsibilities include: • Verifying subrecipients are not suspended or debarred. • Performing and documenting subrecipient risk assessments. • Monitoring subrecipient activities, including review of required audit reports under Subpart F. • Ensuring proper reporting of Federal awards, including Schedule of Federal Awards (“SEFA”) reporting by subrecipients. • Reporting first-tier subawards in FSRS, as required by FFATA. Condition: The Organization did not establish formal policies or procedures to ensure compliance with subrecipient monitoring and reporting requirements. During testing, we noted the following: • Required first-tier subaward information was not reported to FSRS for applicable subawards of $30,000 or more. • The Organization did not document verification of suspension and debarment status prior to issuing subawards. • The Organization did not perform or document subrecipient risk assessments. • Procedures were not in place to obtain and review subrecipient Single Audit reports. • The Federal award passed through by the Organization was not identified on the subrecipient’s Schedule of Expenditures of Federal Awards (SEFA). • The Organization did not have procedures to monitor or verify supporting documentation for personnel costs charged by subrecipients and subcontractors. Effect: Due to not having adequate subrecipient monitoring and reporting controls, the Organization was not in compliance with FFATA and Uniform Guidance requirements. The Organization cannot ensure that subrecipients were eligible to receive Federal funds, that subrecipient activities were properly monitored, or that Federal awards were accurately reported at both the prime and subrecipient levels. This also increases the risk that Federal expenditures may be misstated or not properly reported for Single Audit purposes. Questioned Cost: None Cause: The Organization did not establish formal written policies, procedures, or internal controls to address subrecipient monitoring and FFATA reporting requirements. Additionally, there was insufficient training and oversight to ensure compliance with Federal regulations related to subrecipient management and reporting. Pass-Through Entity Monitoring Results: The Colorado Department of Labor and Employment (CDLE), the pass-through entity, issued a Financial Desk Review in April 2023 covering the period from December 1, 2021 through July 31, 2022. The desk review identified deficiencies substantially similar to those described in this finding and required corrective actions, with supporting documentation requested by April 10, 2023. Based on our audit procedures, we determined that the related internal controls were not operating effectively during the 2023 audit period, as evidenced by the substantially similar compliance deficiencies identified during our testing. This information is provided as relevant background regarding the significance of the deficiencies and is not intended to indicate the existence of a prior-year audit finding. Recommendation: We recommend the Organization implement comprehensive subrecipient monitoring and reporting policies and procedures in accordance with 2 CFR §200.332 and 2 CFR Part 170, including: • Reporting all applicable first-tier subawards to FSRS in a timely and complete manner. • Documenting suspension and debarment verification for all subrecipients (e.g., SAM.gov). • Performing and documenting subrecipient risk assessments prior to issuing subawards. • Establishing procedures to monitor subrecipient activities, including financial and programmatic reviews. • Obtaining and reviewing subrecipient Single Audit reports and following up on any related findings. • Ensuring subaward agreements include all required Federal award information and reporting requirements, including SEFA reporting. • Implementing procedures to ensure subrecipients and subcontractors maintain adequate supporting documentation for personnel costs. Response: There is no disagreement with the audit finding. In fact, the Organization worked towards developing and implementing enhancements to its subrecipient monitoring framework as suggested by the CDLE Financial Desk Review, from the date the Organization received it and throughout the remainder of the year, including revisions to policies, procedures, and oversight activities.
Subrecipient Monitoring – Material Noncompliance and Material Weakness in Internal Control Over Compliance Agency/Passthrough Grantor Department of the Treasury ALN and Program Name 21.027 - Coronavirus State and Local Fiscal Recovery Funds – COVID 19 Award # 1505-0271 Criteria or Specific Requirement 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 statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.332 requires pass-through entities to ensure that subrecipients comply with the terms and conditions of 2 CFR 200.501 related to audit requirements. This includes ensuring that every subaward is (1) clearly identified to the subrecipient as a subaward; (2) includes the necessary information at the time of the subaward for subrecipient reporting on federal awards (2 CFR 200.332) and (3) includes requirement to follow 2 CFR 200.501 if expenditure thresholds are met. This also includes verifying that every subrecipient is audited as required by 2 CFR Subpart F if the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition During our testing of subrecipient monitoring, we noted all 10 of the subrecipient agreements tested did not include language clearly identifying the federal program from which the subaward originated, or the applicable requirements from 2 CFR 300.332 and Subpart F. We also noted for all 10 subrecipients tested that Anchorage did not verify whether subrecipients were audited in accordance with 2 CFR 200.501 where applicable. Cause The issuance of subrecipient agreements for these grants related to new funding streams in response to the COVID-19 pandemic. Significant amounts of funding were provided in a short period of time, and systems to distribute these monies were newly created and implemented. The standard award agreements were not reviewed in advance to ensure adherence to federal requirements. Staff were not fully trained on the informational requirements and monitoring responsibilities related to audit requirements. Effect or Potential Effect Subrecipients may be unaware and not in compliance with the requirements of 2 CFR Part 200. Questioned Costs Not applicable. Context A sample of 24 subawards were selected for testing totaling current year expenditures of $8,379,572 from a population of 24 subawards totaling $11,674,690. Exceptions were identified for all 10 subrecipient agreements tested. All samples tested were selected using nonstatistical sampling methods and were not statistically valid samples. Identification as a Repeat Finding Yes. This finding was reported as Finding 2022-009 in the prior year audit. Recommendation Management should establish policies to ensure subawards contain required federal award information. In addition, procedures should be established to monitor subrecipient compliance with audit requirements of 2 CFR 200.501. Views of Responsible Officials Management concurs with the finding and has begun revising policies and procedures related to subrecipient monitoring.
Subrecipient Monitoring Federal Department – U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing #93.391 County Department – Department of Public Health Finding 2023 – 005 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D—Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that “All pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in Section 200.208 Specific conditions. (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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F— Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.” CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not adequately comply with its subrecipient monitoring requirements in accordance with federal regulations. CAUSE Based on discussions with management, the cause of this finding was due to DPH/CCH identifying a consultant agency to conduct the subrecipient monitoring; this was accomplished October 2023. Current Status: These documents were created, shared with the auditor pending management approval; 1) Subrecipient Monitoring Policy 2). Subrecipient Commitment Form 3). Subrecipient Determination Tool 4). Subrecipient Risk Assessment and Monitoring Guide. EFFECT Failure to adequately monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and DPH’s inability to adequately perform risk assessments on its subrecipient(s). QUESTIONED COSTS None. CONTEXT During the prior audit period, we noted 6 instances (of 27 subrecipients), whereby adequate documentation was not maintained to support both the financial and programmatic monitoring of these subrecipients. Also, we noted no evidence of the performance of subrecipients’ risk assessment and whether the subrecipients were required to have a Single audit conducted. This resulted in the 2022 audit finding and subsequent corrective action planned prepared by DPH to address the finding, which was anticipated to be completed by December 31, 2023. During the current audit period, we received DPH’s current year status of the prior audit finding, noting that risk assessment and monitoring will be ongoing during the 2023 Single audit. To assess the current year’s status, we reviewed 5 of 35 subrecipients, noting that risk assessments were conducted in April 2024. We also noted that 4 of the 5 subrecipients reviewed were subject to a Single Audit per the risk assessment documentation. However, we noted no evidence financial monitoring conducted, including whether a Single Audit report was obtained and reviewed by DPH. IDENTIFICATION OF REPEATED FINDINGS Repeated (Prior Finding No. 2022-009) RECOMMENDATION We recommend DPH implement its prior corrective action plan for any future subrecipients awarded under the federal program. Also, procedures should be in place to adequately document financial monitoring conducted, as well as the review of the Single Audit report, as required by federal regulations. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on page 56.
Subrecipient Monitoring Federal Department – U.S. Department of Health and Human Services Federal Award Identification Number and Year: NU58DP006993 and 2022/2023 COVID-19 - Community Health Workers for Public Health Response and Resilient, Federal Assistance Listing #93.495 County Department – Department of Public Health Finding 2023 – 006 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D—Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that “All pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in Section 200.208 Specific conditions. (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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F— Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.” CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not perform adequate monitoring of its subrecipients as required by Federal regulations. CAUSE Based on discussions with management, the cause of this finding was due to DPH/CCH identifying a consultant agency to conduct the subrecipient monitoring; this was accomplished October 2023. Current Status: These documents were created, shared with the auditor pending management approval; 1) Subrecipient Monitoring Policy 2). Subrecipient Commitment Form 3). Subrecipient Determination Tool 4). Subrecipient Risk Assessment and Monitoring Guide. EFFECT Failure to adequately monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and DPH’s inability to adequately perform risk assessments on its subrecipient(s). QUESTIONED COSTS None. CONTEXT During the current audit period, we noted 12 subrecipients were awarded funds. During our review of three (3) subrecipients, we noted the following: For all three subrecipients, we noted that adequate documentation was not maintained to support the financial monitoring of these subrecipients. Also, no documentation was provided to verify whether the subrecipients were required to have a Single Audit conducted, including DPH’s review of the report, and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). For one subrecipient, we noted documentation was not maintained to support DPH’s evaluation of the subrecipient’s risk of noncompliance and the frequency of monitoring to be conducted by DPH based on the assessed risk. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend DPH implement procedures to ensure that adequate documentation is maintained to support financial monitoring conducted, evaluation of each subrecipient’s risk of noncompliance and review of the Single Audit report, as required by federal regulations. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on page 56.
Subrecipient Monitoring Federal Department – U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing #93.391 County Department – Department of Public Health Finding 2023 – 005 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D—Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that “All pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in Section 200.208 Specific conditions. (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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F— Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.” CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not adequately comply with its subrecipient monitoring requirements in accordance with federal regulations. CAUSE Based on discussions with management, the cause of this finding was due to DPH/CCH identifying a consultant agency to conduct the subrecipient monitoring; this was accomplished October 2023. Current Status: These documents were created, shared with the auditor pending management approval; 1) Subrecipient Monitoring Policy 2). Subrecipient Commitment Form 3). Subrecipient Determination Tool 4). Subrecipient Risk Assessment and Monitoring Guide. EFFECT Failure to adequately monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and DPH’s inability to adequately perform risk assessments on its subrecipient(s). QUESTIONED COSTS None. CONTEXT During the prior audit period, we noted 6 instances (of 27 subrecipients), whereby adequate documentation was not maintained to support both the financial and programmatic monitoring of these subrecipients. Also, we noted no evidence of the performance of subrecipients’ risk assessment and whether the subrecipients were required to have a Single audit conducted. This resulted in the 2022 audit finding and subsequent corrective action planned prepared by DPH to address the finding, which was anticipated to be completed by December 31, 2023. During the current audit period, we received DPH’s current year status of the prior audit finding, noting that risk assessment and monitoring will be ongoing during the 2023 Single audit. To assess the current year’s status, we reviewed 5 of 35 subrecipients, noting that risk assessments were conducted in April 2024. We also noted that 4 of the 5 subrecipients reviewed were subject to a Single Audit per the risk assessment documentation. However, we noted no evidence financial monitoring conducted, including whether a Single Audit report was obtained and reviewed by DPH. IDENTIFICATION OF REPEATED FINDINGS Repeated (Prior Finding No. 2022-009) RECOMMENDATION We recommend DPH implement its prior corrective action plan for any future subrecipients awarded under the federal program. Also, procedures should be in place to adequately document financial monitoring conducted, as well as the review of the Single Audit report, as required by federal regulations. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on page 56.
Subrecipient Monitoring Federal Department – U.S. Department of Health and Human Services Federal Award Identification Number and Year: NU58DP006993 and 2022/2023 COVID-19 - Community Health Workers for Public Health Response and Resilient, Federal Assistance Listing #93.495 County Department – Department of Public Health Finding 2023 – 006 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D—Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that “All pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in Section 200.208 Specific conditions. (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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F— Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.” CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not perform adequate monitoring of its subrecipients as required by Federal regulations. CAUSE Based on discussions with management, the cause of this finding was due to DPH/CCH identifying a consultant agency to conduct the subrecipient monitoring; this was accomplished October 2023. Current Status: These documents were created, shared with the auditor pending management approval; 1) Subrecipient Monitoring Policy 2). Subrecipient Commitment Form 3). Subrecipient Determination Tool 4). Subrecipient Risk Assessment and Monitoring Guide. EFFECT Failure to adequately monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and DPH’s inability to adequately perform risk assessments on its subrecipient(s). QUESTIONED COSTS None. CONTEXT During the current audit period, we noted 12 subrecipients were awarded funds. During our review of three (3) subrecipients, we noted the following: For all three subrecipients, we noted that adequate documentation was not maintained to support the financial monitoring of these subrecipients. Also, no documentation was provided to verify whether the subrecipients were required to have a Single Audit conducted, including DPH’s review of the report, and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). For one subrecipient, we noted documentation was not maintained to support DPH’s evaluation of the subrecipient’s risk of noncompliance and the frequency of monitoring to be conducted by DPH based on the assessed risk. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend DPH implement procedures to ensure that adequate documentation is maintained to support financial monitoring conducted, evaluation of each subrecipient’s risk of noncompliance and review of the Single Audit report, as required by federal regulations. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on page 56.
2023 SINGLE AUDIT FINDING SA-2: Compliance Element: Subrecipient Monitoring Federal Department – Department of the Treasury COVID-19 - Provider Relief Fund and American Rescue Plan (ARPA) Coronavirus State and Local Fiscal Recovery Fund Federal Assistance Listing # 21.027 County Department – County Board CRITERIA: 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D—Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that “All pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in Section 200.208 Specific conditions. (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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F— Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.” CONDITION: During the current audit period, the County did not perform adequate monitoring of its subrecipients as required by Federal regulations. CAUSE: Based on discussions with management, the cause of this finding was a lack of familiarity and awareness regarding the requirements to perform subrecipient monitoring in accordance with Federal regulations. EFFECT: Failure to adequately communicate and monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and the County’s inability to adequately perform risk assessments on its subrecipients. QUESTIONED COSTS: None. CONTEXT: During the current audit period, we noted multiple subrecipients were awarded funds. During our review of the subrecipients, we noted adequate documentation was not maintained to support both the financial and programmatic monitoring of these subrecipients. Specifically, we noted documentation was not maintained to support the County’s evaluation of each subrecipients risk of noncompliance and the frequency of monitoring to be conducted by the County based on the assessed risk. Also, we noted no documentation was provided to verify whether the subrecipients were required to have a Single Audit conducted, including the County’s review of the report, and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). IDENTIFICATION OF REPEATED FINDINGS: None. RECOMMENDATION: We recommend that the County review the allowable costs principles and consult with the grant body to determine if grant repayment is required. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The County Board is planning to take the following steps: VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: See corrective action plan. ANCITPATED COMPLETION DATE: See corrective action plan. ANTICIPATED COMPLETION DATE: December 1, 2025.
Finding 2023-001 – Significant Deficiency in Internal Control - Subrecipient Monitoring Federal Program: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Federal Agency: U.S. Dept of Health and Human Services Passed-Through Agency: Colorado Department of Health Services Behavioral Health Division Award Number: 23 IBEH 175467 / 24 IBEH 184610 / 24 IBEH 187913 Award Year: 2023 and 2024 Compliance Requirement: Subrecipient Monitoring Questioned Costs: Not determinable Criteria: 2 CFR 200.332(a) requires that every subaward agreement includes certain information, including 1) subrecipient's unique entity identifier; 2) name of federal awarding agency; 3) assistance listing number and title; 4) identification of whether the award is R&D; and 5) indirect cost rate for the federal award (including if the de minimis rate is charged). 2 CFR 200.332(b) requires an evaluation of the subrecipient's risk of noncompliance with federal statutes, regulations and the terms and conditions of subawards as part of subrecipient monitoring and identifies specific considerations to be made during this process. 2 CFR 180.22 requires that contract awards not be made to parties listed on the government wide exclusions in the System for Award Management, which contains the names of parties debarred, suspended or otherwise excluded by agencies as well as parties declared ineligible under statutory or regulatory authority. Condition and Context: Subrecipient agreements entered into did not contain all required components as stipulated in 2 CFR 200.332(a). While the organization did have policies and procedures to evaluate its subrecipients, not all considerations noted in 2 CFR 200.332(b) are included in the policies. Furthermore, formal documentation was not maintained of specific considerations to the subrecipients that the Organization ultimately contracted with. Formal documentation was also not maintained related to verification that the subrecipients were not on the government wide exclusions list. Effect: Subrecipient agreements are missing certain data points that are required by the federal government. This could impact the subrecipients in their reporting. Lack of proper subrecipient monitoring, including the risk assessment component and verification of suspension/debarred status could result in the Organization entering into subrecipient agreements with organizations that will not comply with federal laws and regulations. Cause: The omitted components of the agreements, including lack of formal documentation of the risk assessment and verification that subrecipients were not on the federal governmentwide exclusions list were not detected by the Organization’s internal control process. Recommendation: We recommend that management implement procedures to ensure that future subrecipient agreements are compared against all requirements in 2 CFR 200.332(a), 2 CFR 200.332(b) and 2 CFR 180.22 and that formal documentation of such considerations be maintained. Planned Corrective Actions and View of Responsible Officials: Management agrees with the finding and is in the process of updating policies and procedures to be in compliance with the requirements of 2 CFR 200.332(a), 2 CFR 200.332(b) and 2 CFR 180.22.
Finding 2023-001 – Significant Deficiency in Internal Control - Subrecipient Monitoring Federal Program: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Federal Agency: U.S. Dept of Health and Human Services Passed-Through Agency: Colorado Department of Health Services Behavioral Health Division Award Number: 23 IBEH 175467 / 24 IBEH 184610 / 24 IBEH 187913 Award Year: 2023 and 2024 Compliance Requirement: Subrecipient Monitoring Questioned Costs: Not determinable Criteria: 2 CFR 200.332(a) requires that every subaward agreement includes certain information, including 1) subrecipient's unique entity identifier; 2) name of federal awarding agency; 3) assistance listing number and title; 4) identification of whether the award is R&D; and 5) indirect cost rate for the federal award (including if the de minimis rate is charged). 2 CFR 200.332(b) requires an evaluation of the subrecipient's risk of noncompliance with federal statutes, regulations and the terms and conditions of subawards as part of subrecipient monitoring and identifies specific considerations to be made during this process. 2 CFR 180.22 requires that contract awards not be made to parties listed on the government wide exclusions in the System for Award Management, which contains the names of parties debarred, suspended or otherwise excluded by agencies as well as parties declared ineligible under statutory or regulatory authority. Condition and Context: Subrecipient agreements entered into did not contain all required components as stipulated in 2 CFR 200.332(a). While the organization did have policies and procedures to evaluate its subrecipients, not all considerations noted in 2 CFR 200.332(b) are included in the policies. Furthermore, formal documentation was not maintained of specific considerations to the subrecipients that the Organization ultimately contracted with. Formal documentation was also not maintained related to verification that the subrecipients were not on the government wide exclusions list. Effect: Subrecipient agreements are missing certain data points that are required by the federal government. This could impact the subrecipients in their reporting. Lack of proper subrecipient monitoring, including the risk assessment component and verification of suspension/debarred status could result in the Organization entering into subrecipient agreements with organizations that will not comply with federal laws and regulations. Cause: The omitted components of the agreements, including lack of formal documentation of the risk assessment and verification that subrecipients were not on the federal governmentwide exclusions list were not detected by the Organization’s internal control process. Recommendation: We recommend that management implement procedures to ensure that future subrecipient agreements are compared against all requirements in 2 CFR 200.332(a), 2 CFR 200.332(b) and 2 CFR 180.22 and that formal documentation of such considerations be maintained. Planned Corrective Actions and View of Responsible Officials: Management agrees with the finding and is in the process of updating policies and procedures to be in compliance with the requirements of 2 CFR 200.332(a), 2 CFR 200.332(b) and 2 CFR 180.22.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – COVID-19 - ARPA Prevention ALN 93.959 – SAPT Block Grant - Prevention ALN 93.959 – COVID-19 - Prevention Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – COVID-19 - ARPA Prevention ALN 93.959 – SAPT Block Grant - Prevention ALN 93.959 – COVID-19 - Prevention Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – COVID-19 - ARPA Prevention ALN 93.959 – SAPT Block Grant - Prevention ALN 93.959 – COVID-19 - Prevention Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
Identification of the Federal Program - Community Programs to Improve Minority Health Grant Program- Assistance Listing Number 93.137 Criteria - Per 2 CFR 200.332, Requirements for Pass-Through Entities, the City is required to monitor the subrecipients activities to ensure that the grant funds are used for authorized purposes by reviewing financial and performance reports that were required by the City. The City was also required by 2 CFR 200.332 to verify that each of their subrecipients had a single audit performed if their federal expenditures exceeded $750,000. In the Notice of Award, the Department of Health and Human Services required the City to create and provide to the Department a subrecipient monitoring plan as well as use that plan to monitor each of the City’s subrecipients. In the subrecipient monitoring plan, the City was required to perform the following steps: •Regularly communicate at least once a month with subrecipients to ensure that the project is beingcarried out as proposed and according to schedule. •Review and approve periodic technical/performance reports. •Review and approve subrecipient invoices. •Monitor general rate of expenditures and implementation of activities. •Review each subrecipient monthly through the subrecipients preparation of the City’s SubrecipientDesk Review form. •Perform an annual review for each subrecipient through the preparation of the Annual SubrecipientField Review form using the monthly desk review forms. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of subrecipient monitoring and appropriate review by the City. The City did not effectively monitor subrecipient activities to ensure the proper utilization of grant funds. There was a lack of documented evidence demonstrating the monitoring of subrecipients. The City also failed to verify whether each of their subrecipients met the threshold of $750,000 in federal expenditures and subsequently underwent a single audit. There is no documented evidence indicating that the City systematically reviewed the subrecipient expenditures to ensure compliance with this requirement. Effect - Without proper documentation and monitoring, there is an increased likelihood of financial mismanagement, misuse of funds, and noncompliance with grant terms and regulations. Additionally, the absence of adequate records impedes transparency and accountability in the use of federal funds. This deficiency also may result in undetected instances of subrecipients failing to undergo required single audits. Cause - The absence of robust monitoring procedures may stem from insufficient staff training on federal grant requirements, a lack of awareness regarding the importance of maintaining accurate records and conducting thorough monitoring of subrecipient activities, a lack of established processes for reviewing financial and performance reports, or inadequate internal controls. Additionally, there may be a lack of clear communication and accountability regarding subrecipient monitoring roles and responsibilities. Recommendation - The City should establish and enforce comprehensive subrecipient monitoring protocols. This includes developing standardized monitoring procedures, providing staff training on monitoring requirements, allocating sufficient resources for monitoring activities, and implementing mechanisms for regular review and documentation of monitoring efforts. By strengthening subrecipient monitoring practices, the City can mitigate risks, ensure compliance with grant requirements, and safeguard the effective utilization of grant funds. Views of Responsible Officials - The City agrees with the finding. The City will implement additional subrecipient monitoring procedures.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – Prevention ALN 93.959 – COVID-19 – Treatment ALN 93.959 – COVID-19 – Prevention II ALN 93.959 – COVID-19 – ARPA Prevention Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – Prevention ALN 93.959 – COVID-19 – Treatment ALN 93.959 – COVID-19 – Prevention II ALN 93.959 – COVID-19 – ARPA Prevention Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – Prevention ALN 93.959 – COVID-19 – Treatment ALN 93.959 – COVID-19 – Prevention II ALN 93.959 – COVID-19 – ARPA Prevention Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – Prevention ALN 93.959 – COVID-19 – Treatment ALN 93.959 – COVID-19 – Prevention II ALN 93.959 – COVID-19 – ARPA Prevention Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2023-001 – Communications with Subrecipients (repeat comment) Finding Type: Significant Deficiency in internal control over compliance / noncompliance Program: ALN 93.959 – COVID-19 - ARPA Treatment Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the PIHP update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
Condition/Effect: The Council conducted programmatic monitoring; however, no fiscal monitoring activities were performed during the year of its sub-recipients as required by 2 CFR §200.332 (d).
$4,521 Finding No. 2023 003: Activities Allowed and Unallowed (Control Deficiency) Allowable Costs and Cost Principles (Control Deficiency) Reporting (Control Deficiency) Subrecipient Monitoring (Control Deficiency) Federal Agency: U.S. Department of Commerce U.S. Department of the Interior U.S. Agency for International Development Assistance Listing Number and Title: 11.431 – Climate and Atmospheric Research 11.468 – Applied Meteorological Research 15.820 – National and Regional Climate Adaptation on Science Centers 98.001 – Foreign Assistance for Programs Overseas Condition During our audit, we noted the following instances of noncompliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles We noted the following with regards to salaries and wages expenditures selected for testing: Due to the application of an incorrect allocation rate, we noted salaries and wages were inaccurately allocated to the Research and Development Cluster (“R&D Cluster”) program for 4 out of 16 individuals selected for testing. We noted that at the end of the fiscal year management recorded an adjustment in an attempt to correct the error, however, for two of the impacted individuals the amounts calculated in the adjustment were inaccurate. For the remaining two individuals, the amounts calculated in the adjustment were accurate, however the program accounts to which such costs were approved to be allocated as stated per the individual’s “Personnel Budget Form” did not agree to the actual program accounts to which the expenses were recorded in the Center’s general ledger. In addition to the samples selected for testing, we noted salaries and wages were inaccurately allocated to the R&D Cluster program for one individual due to the application of an incorrect allocation rate. We noted the following with regards to non-salaries and wages expenditures selected for testing: We noted that for 3 out of 24 non salaries and wages expenditures selected for testing, we were unable to obtain documentation evidencing Fiscal Officer approval of the expenditure. Reporting We noted two instances in which the Center did not complete the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) for subgrants made during 2023. Subrecipient Monitoring We noted an instance in which the Center did not properly communicate the federal assistance listing number to a subrecipient upon execution of the subaward agreement. Criteria Activities Allowed and Unallowed / Allowable Costs and Cost Principles Section 200.403 – Factors affecting allowability of costs of Title 2 U.S. CFR Part 200, states “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles… (g) Be adequately documented.” Reporting Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA also specifies the data elements to be included by an entity in their reporting submission. Subrecipient Monitoring Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200, states “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (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;” Cause Activities Allowed and Unallowed / Allowable Costs and Cost Principles For the identified instances of noncompliance associated with salaries and wages expenditures, we were informed by management that the inaccurate allocation of amounts to the R&D Cluster program may be due to the untimely updating of level of effort allocation percentages on the individual’s “Personnel Budget Form.” The inaccurate calculation of amounts included in the correcting adjustment and the recordation of amounts to inaccurate program accounts within the Center’s general ledger may be attributed to general management oversight. For the identified instances of noncompliance associated with non salaries and wages expenditures, we were informed by management that although the Fiscal Officer has the ability to electronically approve transactions within the general ledger, the historical retention of such information is an additional service which management did not elect to activate. Reporting The lack of FFATA reporting may be attributed to general management oversight. Subrecipient Monitoring We were informed by management that an outdated template which did not include a field for the federal assistance listing number was utilized when executing the subaward agreement. Effect Activities Allowed and Unallowed / Allowable Costs and Cost Principles Failure to adhere to the allowable cost principles of Title 2 U.S. CFR Part 200 exposes the Center to an undue risk of misuse of federal funds. Furthermore, the inaccurate calculation of salaries and wages expenditures included in the correcting adjustment resulted in the following: • An overstatement of $24 in expenditures allocated to the U.S. Agency for International Development – Foreign Assistance for Program Overseas grant within the R&D Cluster grant. • An understatement of $24 in expenditures allocated to the Cultural, Technical and Educational Centers grant. Reporting Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of Title 2 U.S. CFR Part 200. Subrecipient Monitoring Failure to communicate the required information to subrecipients exposes the Center to an undue risk of misuse of federal funds. Context Activities Allowed and Unallowed / Allowable Costs and Cost Principles A sample of 16 salaries and wages expenditures totaling approximately $57,000 were selected for audit from a population of approximately $402,000 in salaries and wages expenditures. Our test found four instances in which salaries and wages were erroneously recorded under the R&D Cluster program. Our sample is a statistically valid sample. A sample of 24 non salaries and wages related expenditures totaling approximately $98,000 were selected for audit from a population of approximately $601,000 in non salaries and wages related expenditures. Our test found three instances in which documentation of the Fiscal Officer approval of the non salaries and wages related expenditures were not properly retained. Our sample is a statistically valid sample. Reporting A sample of two subawards totaling approximately $129,000 were selected for audit from a population of two subawards totaling approximately $129,000. Our test found two instances in which the FFATA reports were not completed in a timely manner. Our sample is a statistically valid sample. Subrecipient Monitoring A sample of one subaward totaling approximately $92,000 was selected for audit from a population of two subawards totaling approximately $129,000. Our test found one instance in which the federal assistance listing number was not properly communicated to the subrecipient upon execution of the subaward agreement. Our sample is a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Center perform the following to ensure compliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles With regards to salaries and wages expenditures, ensure the level of effort allocation percentages on an individual’s “Personnel Budget Form” are updated in an accurate and timely manner. Also, ensure that correcting adjustments, as necessary, are calculated and recorded within the general ledger in an accurate manner. With regards to non salaries and wages expenditures, ensure that documentation is maintained evidencing Fiscal Officer approval of the expenditure. Reporting Ensure that required FFATA reports are completed in a timely and accurate manner. Subrecipient Monitoring Ensure that information required pursuant to Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200 is properly communicated to subrecipients upon execution of a subaward agreement. Cause and View of Responsible Officials Activities Allowed and Unallowed / Allowable Costs and Cost Principles New payroll allocation procedures were implemented during fiscal 2023 in an effort to streamline the allocation process. Starting in fiscal 2024, management has reverted to the fiscal 2022 payroll allocation procedures to ensure that the proper percentages are used in calculating charges to its contracts and grants. The procedures used in fiscal 2022 and prior resulted in clean audit opinions and can be trusted to allocate payroll properly. The allocation errors noted during the audit were corrected in the subsequent fiscal year. Reporting The FFATA report was filed in fiscal 2024. Procedures were modified to ensure that necessary information is requested from Center subaward recipients to assist in preparing the FFATA reports. Furthermore, the subaward agreement template was revised to make reference to the need for filing FFATA reports. Subrecipient Monitoring Management has revised procedures to ensure that the subaward recipients are notified of the federal assistance listing number. In addition, Finance staff have been reminded of the necessity to communicate the assistance number to our subaward recipients.
$4,521 Finding No. 2023 003: Activities Allowed and Unallowed (Control Deficiency) Allowable Costs and Cost Principles (Control Deficiency) Reporting (Control Deficiency) Subrecipient Monitoring (Control Deficiency) Federal Agency: U.S. Department of Commerce U.S. Department of the Interior U.S. Agency for International Development Assistance Listing Number and Title: 11.431 – Climate and Atmospheric Research 11.468 – Applied Meteorological Research 15.820 – National and Regional Climate Adaptation on Science Centers 98.001 – Foreign Assistance for Programs Overseas Condition During our audit, we noted the following instances of noncompliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles We noted the following with regards to salaries and wages expenditures selected for testing: Due to the application of an incorrect allocation rate, we noted salaries and wages were inaccurately allocated to the Research and Development Cluster (“R&D Cluster”) program for 4 out of 16 individuals selected for testing. We noted that at the end of the fiscal year management recorded an adjustment in an attempt to correct the error, however, for two of the impacted individuals the amounts calculated in the adjustment were inaccurate. For the remaining two individuals, the amounts calculated in the adjustment were accurate, however the program accounts to which such costs were approved to be allocated as stated per the individual’s “Personnel Budget Form” did not agree to the actual program accounts to which the expenses were recorded in the Center’s general ledger. In addition to the samples selected for testing, we noted salaries and wages were inaccurately allocated to the R&D Cluster program for one individual due to the application of an incorrect allocation rate. We noted the following with regards to non-salaries and wages expenditures selected for testing: We noted that for 3 out of 24 non salaries and wages expenditures selected for testing, we were unable to obtain documentation evidencing Fiscal Officer approval of the expenditure. Reporting We noted two instances in which the Center did not complete the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) for subgrants made during 2023. Subrecipient Monitoring We noted an instance in which the Center did not properly communicate the federal assistance listing number to a subrecipient upon execution of the subaward agreement. Criteria Activities Allowed and Unallowed / Allowable Costs and Cost Principles Section 200.403 – Factors affecting allowability of costs of Title 2 U.S. CFR Part 200, states “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles… (g) Be adequately documented.” Reporting Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA also specifies the data elements to be included by an entity in their reporting submission. Subrecipient Monitoring Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200, states “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (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;” Cause Activities Allowed and Unallowed / Allowable Costs and Cost Principles For the identified instances of noncompliance associated with salaries and wages expenditures, we were informed by management that the inaccurate allocation of amounts to the R&D Cluster program may be due to the untimely updating of level of effort allocation percentages on the individual’s “Personnel Budget Form.” The inaccurate calculation of amounts included in the correcting adjustment and the recordation of amounts to inaccurate program accounts within the Center’s general ledger may be attributed to general management oversight. For the identified instances of noncompliance associated with non salaries and wages expenditures, we were informed by management that although the Fiscal Officer has the ability to electronically approve transactions within the general ledger, the historical retention of such information is an additional service which management did not elect to activate. Reporting The lack of FFATA reporting may be attributed to general management oversight. Subrecipient Monitoring We were informed by management that an outdated template which did not include a field for the federal assistance listing number was utilized when executing the subaward agreement. Effect Activities Allowed and Unallowed / Allowable Costs and Cost Principles Failure to adhere to the allowable cost principles of Title 2 U.S. CFR Part 200 exposes the Center to an undue risk of misuse of federal funds. Furthermore, the inaccurate calculation of salaries and wages expenditures included in the correcting adjustment resulted in the following: • An overstatement of $24 in expenditures allocated to the U.S. Agency for International Development – Foreign Assistance for Program Overseas grant within the R&D Cluster grant. • An understatement of $24 in expenditures allocated to the Cultural, Technical and Educational Centers grant. Reporting Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of Title 2 U.S. CFR Part 200. Subrecipient Monitoring Failure to communicate the required information to subrecipients exposes the Center to an undue risk of misuse of federal funds. Context Activities Allowed and Unallowed / Allowable Costs and Cost Principles A sample of 16 salaries and wages expenditures totaling approximately $57,000 were selected for audit from a population of approximately $402,000 in salaries and wages expenditures. Our test found four instances in which salaries and wages were erroneously recorded under the R&D Cluster program. Our sample is a statistically valid sample. A sample of 24 non salaries and wages related expenditures totaling approximately $98,000 were selected for audit from a population of approximately $601,000 in non salaries and wages related expenditures. Our test found three instances in which documentation of the Fiscal Officer approval of the non salaries and wages related expenditures were not properly retained. Our sample is a statistically valid sample. Reporting A sample of two subawards totaling approximately $129,000 were selected for audit from a population of two subawards totaling approximately $129,000. Our test found two instances in which the FFATA reports were not completed in a timely manner. Our sample is a statistically valid sample. Subrecipient Monitoring A sample of one subaward totaling approximately $92,000 was selected for audit from a population of two subawards totaling approximately $129,000. Our test found one instance in which the federal assistance listing number was not properly communicated to the subrecipient upon execution of the subaward agreement. Our sample is a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Center perform the following to ensure compliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles With regards to salaries and wages expenditures, ensure the level of effort allocation percentages on an individual’s “Personnel Budget Form” are updated in an accurate and timely manner. Also, ensure that correcting adjustments, as necessary, are calculated and recorded within the general ledger in an accurate manner. With regards to non salaries and wages expenditures, ensure that documentation is maintained evidencing Fiscal Officer approval of the expenditure. Reporting Ensure that required FFATA reports are completed in a timely and accurate manner. Subrecipient Monitoring Ensure that information required pursuant to Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200 is properly communicated to subrecipients upon execution of a subaward agreement. Cause and View of Responsible Officials Activities Allowed and Unallowed / Allowable Costs and Cost Principles New payroll allocation procedures were implemented during fiscal 2023 in an effort to streamline the allocation process. Starting in fiscal 2024, management has reverted to the fiscal 2022 payroll allocation procedures to ensure that the proper percentages are used in calculating charges to its contracts and grants. The procedures used in fiscal 2022 and prior resulted in clean audit opinions and can be trusted to allocate payroll properly. The allocation errors noted during the audit were corrected in the subsequent fiscal year. Reporting The FFATA report was filed in fiscal 2024. Procedures were modified to ensure that necessary information is requested from Center subaward recipients to assist in preparing the FFATA reports. Furthermore, the subaward agreement template was revised to make reference to the need for filing FFATA reports. Subrecipient Monitoring Management has revised procedures to ensure that the subaward recipients are notified of the federal assistance listing number. In addition, Finance staff have been reminded of the necessity to communicate the assistance number to our subaward recipients.
$4,521 Finding No. 2023 003: Activities Allowed and Unallowed (Control Deficiency) Allowable Costs and Cost Principles (Control Deficiency) Reporting (Control Deficiency) Subrecipient Monitoring (Control Deficiency) Federal Agency: U.S. Department of Commerce U.S. Department of the Interior U.S. Agency for International Development Assistance Listing Number and Title: 11.431 – Climate and Atmospheric Research 11.468 – Applied Meteorological Research 15.820 – National and Regional Climate Adaptation on Science Centers 98.001 – Foreign Assistance for Programs Overseas Condition During our audit, we noted the following instances of noncompliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles We noted the following with regards to salaries and wages expenditures selected for testing: Due to the application of an incorrect allocation rate, we noted salaries and wages were inaccurately allocated to the Research and Development Cluster (“R&D Cluster”) program for 4 out of 16 individuals selected for testing. We noted that at the end of the fiscal year management recorded an adjustment in an attempt to correct the error, however, for two of the impacted individuals the amounts calculated in the adjustment were inaccurate. For the remaining two individuals, the amounts calculated in the adjustment were accurate, however the program accounts to which such costs were approved to be allocated as stated per the individual’s “Personnel Budget Form” did not agree to the actual program accounts to which the expenses were recorded in the Center’s general ledger. In addition to the samples selected for testing, we noted salaries and wages were inaccurately allocated to the R&D Cluster program for one individual due to the application of an incorrect allocation rate. We noted the following with regards to non-salaries and wages expenditures selected for testing: We noted that for 3 out of 24 non salaries and wages expenditures selected for testing, we were unable to obtain documentation evidencing Fiscal Officer approval of the expenditure. Reporting We noted two instances in which the Center did not complete the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) for subgrants made during 2023. Subrecipient Monitoring We noted an instance in which the Center did not properly communicate the federal assistance listing number to a subrecipient upon execution of the subaward agreement. Criteria Activities Allowed and Unallowed / Allowable Costs and Cost Principles Section 200.403 – Factors affecting allowability of costs of Title 2 U.S. CFR Part 200, states “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles… (g) Be adequately documented.” Reporting Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA also specifies the data elements to be included by an entity in their reporting submission. Subrecipient Monitoring Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200, states “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (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;” Cause Activities Allowed and Unallowed / Allowable Costs and Cost Principles For the identified instances of noncompliance associated with salaries and wages expenditures, we were informed by management that the inaccurate allocation of amounts to the R&D Cluster program may be due to the untimely updating of level of effort allocation percentages on the individual’s “Personnel Budget Form.” The inaccurate calculation of amounts included in the correcting adjustment and the recordation of amounts to inaccurate program accounts within the Center’s general ledger may be attributed to general management oversight. For the identified instances of noncompliance associated with non salaries and wages expenditures, we were informed by management that although the Fiscal Officer has the ability to electronically approve transactions within the general ledger, the historical retention of such information is an additional service which management did not elect to activate. Reporting The lack of FFATA reporting may be attributed to general management oversight. Subrecipient Monitoring We were informed by management that an outdated template which did not include a field for the federal assistance listing number was utilized when executing the subaward agreement. Effect Activities Allowed and Unallowed / Allowable Costs and Cost Principles Failure to adhere to the allowable cost principles of Title 2 U.S. CFR Part 200 exposes the Center to an undue risk of misuse of federal funds. Furthermore, the inaccurate calculation of salaries and wages expenditures included in the correcting adjustment resulted in the following: • An overstatement of $24 in expenditures allocated to the U.S. Agency for International Development – Foreign Assistance for Program Overseas grant within the R&D Cluster grant. • An understatement of $24 in expenditures allocated to the Cultural, Technical and Educational Centers grant. Reporting Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of Title 2 U.S. CFR Part 200. Subrecipient Monitoring Failure to communicate the required information to subrecipients exposes the Center to an undue risk of misuse of federal funds. Context Activities Allowed and Unallowed / Allowable Costs and Cost Principles A sample of 16 salaries and wages expenditures totaling approximately $57,000 were selected for audit from a population of approximately $402,000 in salaries and wages expenditures. Our test found four instances in which salaries and wages were erroneously recorded under the R&D Cluster program. Our sample is a statistically valid sample. A sample of 24 non salaries and wages related expenditures totaling approximately $98,000 were selected for audit from a population of approximately $601,000 in non salaries and wages related expenditures. Our test found three instances in which documentation of the Fiscal Officer approval of the non salaries and wages related expenditures were not properly retained. Our sample is a statistically valid sample. Reporting A sample of two subawards totaling approximately $129,000 were selected for audit from a population of two subawards totaling approximately $129,000. Our test found two instances in which the FFATA reports were not completed in a timely manner. Our sample is a statistically valid sample. Subrecipient Monitoring A sample of one subaward totaling approximately $92,000 was selected for audit from a population of two subawards totaling approximately $129,000. Our test found one instance in which the federal assistance listing number was not properly communicated to the subrecipient upon execution of the subaward agreement. Our sample is a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Center perform the following to ensure compliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles With regards to salaries and wages expenditures, ensure the level of effort allocation percentages on an individual’s “Personnel Budget Form” are updated in an accurate and timely manner. Also, ensure that correcting adjustments, as necessary, are calculated and recorded within the general ledger in an accurate manner. With regards to non salaries and wages expenditures, ensure that documentation is maintained evidencing Fiscal Officer approval of the expenditure. Reporting Ensure that required FFATA reports are completed in a timely and accurate manner. Subrecipient Monitoring Ensure that information required pursuant to Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200 is properly communicated to subrecipients upon execution of a subaward agreement. Cause and View of Responsible Officials Activities Allowed and Unallowed / Allowable Costs and Cost Principles New payroll allocation procedures were implemented during fiscal 2023 in an effort to streamline the allocation process. Starting in fiscal 2024, management has reverted to the fiscal 2022 payroll allocation procedures to ensure that the proper percentages are used in calculating charges to its contracts and grants. The procedures used in fiscal 2022 and prior resulted in clean audit opinions and can be trusted to allocate payroll properly. The allocation errors noted during the audit were corrected in the subsequent fiscal year. Reporting The FFATA report was filed in fiscal 2024. Procedures were modified to ensure that necessary information is requested from Center subaward recipients to assist in preparing the FFATA reports. Furthermore, the subaward agreement template was revised to make reference to the need for filing FFATA reports. Subrecipient Monitoring Management has revised procedures to ensure that the subaward recipients are notified of the federal assistance listing number. In addition, Finance staff have been reminded of the necessity to communicate the assistance number to our subaward recipients.
$4,521 Finding No. 2023 003: Activities Allowed and Unallowed (Control Deficiency) Allowable Costs and Cost Principles (Control Deficiency) Reporting (Control Deficiency) Subrecipient Monitoring (Control Deficiency) Federal Agency: U.S. Department of Commerce U.S. Department of the Interior U.S. Agency for International Development Assistance Listing Number and Title: 11.431 – Climate and Atmospheric Research 11.468 – Applied Meteorological Research 15.820 – National and Regional Climate Adaptation on Science Centers 98.001 – Foreign Assistance for Programs Overseas Condition During our audit, we noted the following instances of noncompliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles We noted the following with regards to salaries and wages expenditures selected for testing: Due to the application of an incorrect allocation rate, we noted salaries and wages were inaccurately allocated to the Research and Development Cluster (“R&D Cluster”) program for 4 out of 16 individuals selected for testing. We noted that at the end of the fiscal year management recorded an adjustment in an attempt to correct the error, however, for two of the impacted individuals the amounts calculated in the adjustment were inaccurate. For the remaining two individuals, the amounts calculated in the adjustment were accurate, however the program accounts to which such costs were approved to be allocated as stated per the individual’s “Personnel Budget Form” did not agree to the actual program accounts to which the expenses were recorded in the Center’s general ledger. In addition to the samples selected for testing, we noted salaries and wages were inaccurately allocated to the R&D Cluster program for one individual due to the application of an incorrect allocation rate. We noted the following with regards to non-salaries and wages expenditures selected for testing: We noted that for 3 out of 24 non salaries and wages expenditures selected for testing, we were unable to obtain documentation evidencing Fiscal Officer approval of the expenditure. Reporting We noted two instances in which the Center did not complete the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) for subgrants made during 2023. Subrecipient Monitoring We noted an instance in which the Center did not properly communicate the federal assistance listing number to a subrecipient upon execution of the subaward agreement. Criteria Activities Allowed and Unallowed / Allowable Costs and Cost Principles Section 200.403 – Factors affecting allowability of costs of Title 2 U.S. CFR Part 200, states “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles… (g) Be adequately documented.” Reporting Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA also specifies the data elements to be included by an entity in their reporting submission. Subrecipient Monitoring Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200, states “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (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;” Cause Activities Allowed and Unallowed / Allowable Costs and Cost Principles For the identified instances of noncompliance associated with salaries and wages expenditures, we were informed by management that the inaccurate allocation of amounts to the R&D Cluster program may be due to the untimely updating of level of effort allocation percentages on the individual’s “Personnel Budget Form.” The inaccurate calculation of amounts included in the correcting adjustment and the recordation of amounts to inaccurate program accounts within the Center’s general ledger may be attributed to general management oversight. For the identified instances of noncompliance associated with non salaries and wages expenditures, we were informed by management that although the Fiscal Officer has the ability to electronically approve transactions within the general ledger, the historical retention of such information is an additional service which management did not elect to activate. Reporting The lack of FFATA reporting may be attributed to general management oversight. Subrecipient Monitoring We were informed by management that an outdated template which did not include a field for the federal assistance listing number was utilized when executing the subaward agreement. Effect Activities Allowed and Unallowed / Allowable Costs and Cost Principles Failure to adhere to the allowable cost principles of Title 2 U.S. CFR Part 200 exposes the Center to an undue risk of misuse of federal funds. Furthermore, the inaccurate calculation of salaries and wages expenditures included in the correcting adjustment resulted in the following: • An overstatement of $24 in expenditures allocated to the U.S. Agency for International Development – Foreign Assistance for Program Overseas grant within the R&D Cluster grant. • An understatement of $24 in expenditures allocated to the Cultural, Technical and Educational Centers grant. Reporting Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of Title 2 U.S. CFR Part 200. Subrecipient Monitoring Failure to communicate the required information to subrecipients exposes the Center to an undue risk of misuse of federal funds. Context Activities Allowed and Unallowed / Allowable Costs and Cost Principles A sample of 16 salaries and wages expenditures totaling approximately $57,000 were selected for audit from a population of approximately $402,000 in salaries and wages expenditures. Our test found four instances in which salaries and wages were erroneously recorded under the R&D Cluster program. Our sample is a statistically valid sample. A sample of 24 non salaries and wages related expenditures totaling approximately $98,000 were selected for audit from a population of approximately $601,000 in non salaries and wages related expenditures. Our test found three instances in which documentation of the Fiscal Officer approval of the non salaries and wages related expenditures were not properly retained. Our sample is a statistically valid sample. Reporting A sample of two subawards totaling approximately $129,000 were selected for audit from a population of two subawards totaling approximately $129,000. Our test found two instances in which the FFATA reports were not completed in a timely manner. Our sample is a statistically valid sample. Subrecipient Monitoring A sample of one subaward totaling approximately $92,000 was selected for audit from a population of two subawards totaling approximately $129,000. Our test found one instance in which the federal assistance listing number was not properly communicated to the subrecipient upon execution of the subaward agreement. Our sample is a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Center perform the following to ensure compliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles With regards to salaries and wages expenditures, ensure the level of effort allocation percentages on an individual’s “Personnel Budget Form” are updated in an accurate and timely manner. Also, ensure that correcting adjustments, as necessary, are calculated and recorded within the general ledger in an accurate manner. With regards to non salaries and wages expenditures, ensure that documentation is maintained evidencing Fiscal Officer approval of the expenditure. Reporting Ensure that required FFATA reports are completed in a timely and accurate manner. Subrecipient Monitoring Ensure that information required pursuant to Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200 is properly communicated to subrecipients upon execution of a subaward agreement. Cause and View of Responsible Officials Activities Allowed and Unallowed / Allowable Costs and Cost Principles New payroll allocation procedures were implemented during fiscal 2023 in an effort to streamline the allocation process. Starting in fiscal 2024, management has reverted to the fiscal 2022 payroll allocation procedures to ensure that the proper percentages are used in calculating charges to its contracts and grants. The procedures used in fiscal 2022 and prior resulted in clean audit opinions and can be trusted to allocate payroll properly. The allocation errors noted during the audit were corrected in the subsequent fiscal year. Reporting The FFATA report was filed in fiscal 2024. Procedures were modified to ensure that necessary information is requested from Center subaward recipients to assist in preparing the FFATA reports. Furthermore, the subaward agreement template was revised to make reference to the need for filing FFATA reports. Subrecipient Monitoring Management has revised procedures to ensure that the subaward recipients are notified of the federal assistance listing number. In addition, Finance staff have been reminded of the necessity to communicate the assistance number to our subaward recipients.
$4,521 Finding No. 2023 003: Activities Allowed and Unallowed (Control Deficiency) Allowable Costs and Cost Principles (Control Deficiency) Reporting (Control Deficiency) Subrecipient Monitoring (Control Deficiency) Federal Agency: U.S. Department of Commerce U.S. Department of the Interior U.S. Agency for International Development Assistance Listing Number and Title: 11.431 – Climate and Atmospheric Research 11.468 – Applied Meteorological Research 15.820 – National and Regional Climate Adaptation on Science Centers 98.001 – Foreign Assistance for Programs Overseas Condition During our audit, we noted the following instances of noncompliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles We noted the following with regards to salaries and wages expenditures selected for testing: Due to the application of an incorrect allocation rate, we noted salaries and wages were inaccurately allocated to the Research and Development Cluster (“R&D Cluster”) program for 4 out of 16 individuals selected for testing. We noted that at the end of the fiscal year management recorded an adjustment in an attempt to correct the error, however, for two of the impacted individuals the amounts calculated in the adjustment were inaccurate. For the remaining two individuals, the amounts calculated in the adjustment were accurate, however the program accounts to which such costs were approved to be allocated as stated per the individual’s “Personnel Budget Form” did not agree to the actual program accounts to which the expenses were recorded in the Center’s general ledger. In addition to the samples selected for testing, we noted salaries and wages were inaccurately allocated to the R&D Cluster program for one individual due to the application of an incorrect allocation rate. We noted the following with regards to non-salaries and wages expenditures selected for testing: We noted that for 3 out of 24 non salaries and wages expenditures selected for testing, we were unable to obtain documentation evidencing Fiscal Officer approval of the expenditure. Reporting We noted two instances in which the Center did not complete the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) for subgrants made during 2023. Subrecipient Monitoring We noted an instance in which the Center did not properly communicate the federal assistance listing number to a subrecipient upon execution of the subaward agreement. Criteria Activities Allowed and Unallowed / Allowable Costs and Cost Principles Section 200.403 – Factors affecting allowability of costs of Title 2 U.S. CFR Part 200, states “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles… (g) Be adequately documented.” Reporting Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA also specifies the data elements to be included by an entity in their reporting submission. Subrecipient Monitoring Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200, states “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (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;” Cause Activities Allowed and Unallowed / Allowable Costs and Cost Principles For the identified instances of noncompliance associated with salaries and wages expenditures, we were informed by management that the inaccurate allocation of amounts to the R&D Cluster program may be due to the untimely updating of level of effort allocation percentages on the individual’s “Personnel Budget Form.” The inaccurate calculation of amounts included in the correcting adjustment and the recordation of amounts to inaccurate program accounts within the Center’s general ledger may be attributed to general management oversight. For the identified instances of noncompliance associated with non salaries and wages expenditures, we were informed by management that although the Fiscal Officer has the ability to electronically approve transactions within the general ledger, the historical retention of such information is an additional service which management did not elect to activate. Reporting The lack of FFATA reporting may be attributed to general management oversight. Subrecipient Monitoring We were informed by management that an outdated template which did not include a field for the federal assistance listing number was utilized when executing the subaward agreement. Effect Activities Allowed and Unallowed / Allowable Costs and Cost Principles Failure to adhere to the allowable cost principles of Title 2 U.S. CFR Part 200 exposes the Center to an undue risk of misuse of federal funds. Furthermore, the inaccurate calculation of salaries and wages expenditures included in the correcting adjustment resulted in the following: • An overstatement of $24 in expenditures allocated to the U.S. Agency for International Development – Foreign Assistance for Program Overseas grant within the R&D Cluster grant. • An understatement of $24 in expenditures allocated to the Cultural, Technical and Educational Centers grant. Reporting Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of Title 2 U.S. CFR Part 200. Subrecipient Monitoring Failure to communicate the required information to subrecipients exposes the Center to an undue risk of misuse of federal funds. Context Activities Allowed and Unallowed / Allowable Costs and Cost Principles A sample of 16 salaries and wages expenditures totaling approximately $57,000 were selected for audit from a population of approximately $402,000 in salaries and wages expenditures. Our test found four instances in which salaries and wages were erroneously recorded under the R&D Cluster program. Our sample is a statistically valid sample. A sample of 24 non salaries and wages related expenditures totaling approximately $98,000 were selected for audit from a population of approximately $601,000 in non salaries and wages related expenditures. Our test found three instances in which documentation of the Fiscal Officer approval of the non salaries and wages related expenditures were not properly retained. Our sample is a statistically valid sample. Reporting A sample of two subawards totaling approximately $129,000 were selected for audit from a population of two subawards totaling approximately $129,000. Our test found two instances in which the FFATA reports were not completed in a timely manner. Our sample is a statistically valid sample. Subrecipient Monitoring A sample of one subaward totaling approximately $92,000 was selected for audit from a population of two subawards totaling approximately $129,000. Our test found one instance in which the federal assistance listing number was not properly communicated to the subrecipient upon execution of the subaward agreement. Our sample is a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Center perform the following to ensure compliance: Activities Allowed and Unallowed / Allowable Costs and Cost Principles With regards to salaries and wages expenditures, ensure the level of effort allocation percentages on an individual’s “Personnel Budget Form” are updated in an accurate and timely manner. Also, ensure that correcting adjustments, as necessary, are calculated and recorded within the general ledger in an accurate manner. With regards to non salaries and wages expenditures, ensure that documentation is maintained evidencing Fiscal Officer approval of the expenditure. Reporting Ensure that required FFATA reports are completed in a timely and accurate manner. Subrecipient Monitoring Ensure that information required pursuant to Section 200.332 – Requirements for pass-through entities of Title 2 U.S. CFR Part 200 is properly communicated to subrecipients upon execution of a subaward agreement. Cause and View of Responsible Officials Activities Allowed and Unallowed / Allowable Costs and Cost Principles New payroll allocation procedures were implemented during fiscal 2023 in an effort to streamline the allocation process. Starting in fiscal 2024, management has reverted to the fiscal 2022 payroll allocation procedures to ensure that the proper percentages are used in calculating charges to its contracts and grants. The procedures used in fiscal 2022 and prior resulted in clean audit opinions and can be trusted to allocate payroll properly. The allocation errors noted during the audit were corrected in the subsequent fiscal year. Reporting The FFATA report was filed in fiscal 2024. Procedures were modified to ensure that necessary information is requested from Center subaward recipients to assist in preparing the FFATA reports. Furthermore, the subaward agreement template was revised to make reference to the need for filing FFATA reports. Subrecipient Monitoring Management has revised procedures to ensure that the subaward recipients are notified of the federal assistance listing number. In addition, Finance staff have been reminded of the necessity to communicate the assistance number to our subaward recipients.
FINDING 2023-032 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDHHS and MDE did not report to their subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDHHS did not report the correct unique entity identifier (UEI) or FAIN for all 4 sampled CSLFRF subrecipients. b. MDE did not correctly report one or more of the following for 5 of 6 sampled CSLFRF subrecipients: subrecipient name that matches the name associated with its UEI, unique entity identifier, FAIN, and closeout terms and conditions. Criteria Federal regulation 2 CFR 200.332(a) requires all pass-through entities ensure every subaward includes certain information. Cause For part a., MDHHS informed us because of an oversight, it did not use the correct ALN when determining the FAIN, and the grantee profile contained the Data Universal Numbering System (DUNS) number rather than the UEI. For part b., MDE informed us because of an oversight, it did not use the appropriately updated grant agreement templates with the correct subaward information for fiscal year 2023. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDHHS and MDE report to their subrecipients all subaward information as required by the Uniform Guidance. Management Views MDHHS and MDE agree with the finding.