(2023-055) Title: Internal control over ERA Program subrecipient monitoring needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Economic and Community Development State Bureau: Commissioner’s Office Federal Agency: U.S. Department of the Treasury Assistance Listing Title: Emergency Rental Assistance Program (COVID-19) Assistance Listing Number: 21.023 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must monitor the activities of the subrecipient as necessary to ensure that subawards are used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Condition: In fiscal year 2023, the Department passed through Emergency Rental Assistance (ERA) Program funds to one subrecipient responsible for administering the program. Subrecipient monitoring procedures included providing Federal award information in grant award agreements and frequent communication with the subrecipient; however, the Department did not adequately design and document ongoing monitoring activities to ensure that the subaward was used for authorized purposes and in compliance with Federal regulations. During fiscal year 2023, the Department contracted with a vendor to perform all subrecipient monitoring for the ERA Program, but all monitoring activities occurred subsequent to the final disbursement of ERA Program funds in January 2023. In addition, the Department did not require submission of detailed expenditure information with the subrecipient’s requests for reimbursement of ERA Program funds. A summary spreadsheet outlining actual and projected expenditures for second-tier subrecipients was the only support provided to the Department with each reimbursement request. Context: In fiscal year 2023, the Department expended $39.5 million in ERA Program funds; the entire amount was passed through to the subrecipient. Cause: • Lack of supervisory oversight • Lack of adequate policies and procedures Effect: • Noncompliance with Federal regulations • Lack of ongoing subrecipient monitoring procedures could result in subrecipient noncompliance that is not discovered timely. Recommendation: The Office of the State Auditor (OSA) acknowledges that the ERA Program has concluded; however, we recommend that the Department develop and implement policies and procedures to ensure that: • all Federal award program subrecipients of the Department are subject to ongoing monitoring activities during the grant award term. • detailed documentation in support of subrecipient reimbursement requests is received prior to payment approval. In addition, we recommend that the Department monitor subrecipient corrective action related to the results of the retroactive monitoring activities performed by the vendor in order to properly close out the ERA Program. Corrective Action Plan: See F-26 Management’s Response: Although management agrees with this finding, the ERA program was one-time funding that the department was required to award to the subrecipient. The Department determined that because the subrecipient is a quasi-state agency that administers millions of federal dollars for rental assistance under the Section 8 and HOME programs, they did not require the level of oversight cited in the finding. The ERA 1 program is already closed-out with Treasury. If there is any additional funding under that program the department will implement our subrecipient monitoring policies and procedures. Contact: Deborah Johnson, Director, Office of Community Development, DECD, 207-624-9817 Auditor’s Concluding Remarks: OSA again acknowledges that the ERA Program has concluded; however, the deficiencies noted in the Condition and the related recommendations address Department policies and procedures for all Federal award program subrecipients. As stated in Management’s Response, the subrecipient administers a significant amount of Federal funding. This reinforces the need to monitor corrective action related to the results of retroactive monitoring activities performed by the vendor and properly close out the ERA Program. Subrecipient monitoring activities for future subrecipient awards should be adjusted accordingly. The finding remains as stated. (State Number: 23-1695-02)
(2023-059) Title: Internal control over CSLFRF subrecipient audit procedures needs improvement Prior Year Findings: None State Department: Economic and Community Development State Bureau: Commissioner’s Office Federal Agency: U.S. Department of the Treasury Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (COVID-19) Assistance Listing Number: 21.027 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332; 2 CFR 200.521 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the 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. The Department must verify that every subrecipient is audited as required by 2 CFR 200, subpart F regarding audit requirements. Furthermore, the Department must issue a management decision for audit findings that relate to Federal awards provided to the subrecipient within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Condition: As part of the American Rescue Plan Act, the State was advanced $997 million in Federal Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) to support its response to and recovery from the COVID-19 public health emergency. The Department of Economic and Community Development (DECD) partnered with subrecipients to support the administration of CSLFRF. The Office of the State Auditor (OSA) selected a sample of three DECD subrecipients subject to Single Audit requirements outlined in 2 CFR 200, subpart F and identified that DECD did not review the subrecipients’ Single Audits. Additionally, one of the subrecipient Single Audit Reports included a CSLFRF finding for not verifying whether beneficiaries were suspended or debarred; DECD did not issue a management decision as required by Federal regulations. OSA selected a non-statistical random sample. Context: For fiscal year 2023, CSLFRF expenditures totaled $207.8 million, of which approximately $55 million was provided to 12 DECD subrecipients. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients may not be complying with Federal statutes, regulations, or the terms and conditions of the subaward. Recommendation: We recommend that the Department enhance policies and procedures to ensure that audit reports for all subrecipients receiving over $750,000 in Federal awards requiring audits are properly reviewed, and management decisions are issued timely. Corrective Action Plan: See F-27 Management’s Response: The Department agrees with this finding. The selected sample of subrecipient single audits were not reviewed in keeping with federal guidance in 2 CFR 200 and management decision letters were not issued. Moving forward DECD will engage their consulting firm to conduct regular reviews of subrecipient single audits and work with DECD staff to issue timely and actionable management decisions. Contact: Denise Garland, Deputy Commissioner, DECD, 207-624-7496 (State Number: 23-1699-02)
(2023-060) Title: Internal control over CSLFRF subrecipient risk evaluation procedures needs improvement Prior Year Findings: None State Department: Labor State Bureau: Commissioner’s Office Federal Agency: U.S. Department of the Treasury Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (COVID-19) Assistance Listing Number: 21.027 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in 2 CFR 200.332. Condition: As part of the American Rescue Plan Act, the State was advanced $997 million in Federal Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) to support its response to and recovery from the COVID-19 public health emergency. The Maine Department of Labor (MDOL) partnered with subrecipients to support the administration of CSLFRF. MDOL has a documented policy that requires subrecipient risk evaluations. The Office of the State Auditor (OSA) tested a sample of 35 subrecipients paid by various State agencies under CSLFRF, including seven MDOL subrecipients, to ensure that proper subrecipient monitoring was performed as required by Federal regulations. MDOL subrecipient monitoring procedures included providing Federal award information in grant award agreements, communicating program guidelines, establishing reporting requirements, providing technical assistance, and communicating with the subrecipients to discuss program performance; however, MDOL could not provide evidence to demonstrate that monitoring procedures were established in response to an evaluation of the subrecipient’s risk of noncompliance for the seven MDOL subrecipients tested. OSA selected a nonstatistical random sample. Context: During fiscal year 2023, the Department provided $2.4 million to 20 MDOL subrecipients, from a total of $110.5 million provided to all CSLFRF subrecipients. Cause: • Lack of supervisory oversight • Lack of adequate procedures Effect: • Subrecipients that are deemed higher risk may not be monitored on a more frequent basis. Conversely, subrecipients that are deemed lower risk may not be monitored on a less frequent basis, which would free resources and time to dedicate towards other higher risk subrecipients. • Subrecipient noncompliance could go undetected. Recommendation: We recommend that the Department enforce policies and procedures that require evaluation of each subrecipient’s risk of noncompliance specifically for the purposes of determining the appropriate subrecipient monitoring to be performed. This will ensure subrecipients are monitored appropriately based on risk designation. Corrective Action Plan: See F-27 Management’s Response: The Department agrees with this finding. MDOL received funds via the Maine Jobs and Recovery Plan to accomplish several goals across 20 unique initiatives. To best meet the goals of several initiatives, MDOL selected various partners to work with - via a competitive Request for Applications (RFA) process or other contractual arrangement. MDOL’s competitive RFA process required evaluating individual applicants’ previous experience in managing grants and delivering similar programs, which directly correlated with selection criteria and grantee scoring. After selection, grantees are required to submit quarterly performance reports and participate in grantee check-in calls at least twice per year. For grantees not on track to meet their performance goals, monthly calls were held with interim progress milestones set to track performance. While the above procedures were implemented for all subrecipients, going forward, the Department will document that monitoring procedures were established in response to an evaluation of the subrecipient’s risk of noncompliance. Contact: Samantha Dina, Associate Commissioner, MDOL, 207-816-1714 (State Number: 23-1699-04)
(2023-061) Title: Internal control over CSLFRF reporting needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Security and Employment Service Center Federal Agency: U.S. Department of the Treasury Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (COVID-19) Assistance Listing Number: 21.027 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332(b); 2 CFR 200.510 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must maintain accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with reporting requirements. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) and include the total amount provided to subrecipients from each Federal program. Condition: The Department of Administrative and Financial Services’ Security and Employment Service Center (SESC) is responsible for accurately recording information needed to report on the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Quarterly Project and Expenditure Reports. Information from these CSLFRF reports is used by the Office of the State Controller for SEFA preparation. The Office of the State Auditor reviewed amounts reported on the SEFA and identified $24.1 million of Federal expenditures incorrectly reported as amounts provided to subrecipients that should have been reported as direct expenditures. SESC inaccurately identified vendors as subrecipients. As a result, vendor payments were incorrectly classified as subrecipient payments on the CSLFRF Quarterly Project and Expenditure Reports and were incorrectly included in the initial amount reported on the SEFA as amounts provided to subrecipients. Context: Payments to the providers totaled $24.1 million of the $207.8 million in CSLFRF expenditures. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Incomplete or inaccurate reporting of expenditures on the CSLFRF reports and SEFA, which are submitted to the Federal government, may result in incorrect information used for programmatic, policy or statistical purposes. • Noncompliance with Federal regulations Recommendation: We recommend that the Department implement policies and procedures to ensure contractors and subrecipients are appropriately classified and reported on the CSLFRF Quarterly Project and Expenditure Reports and SEFA. Corrective Action Plan: See F-27 Management’s Response: The Department agrees with this finding. The Security and Employment Service Center will continue to work with our partner agencies to help ensure the sub-recipient/vendor classification is appropriately determined when the initial contracts are written. Contact: Marilyn Leimbach, Director, Security and Employment Service Center, DFPS, DAFS, 207-248-2556 (State Number: 23-1699-03)
(2023-063) Title: Internal control over Special Education subrecipient audit procedures needs improvement Prior Year Findings: None State Department: Education State Bureau: Commissioner’s Office Special Services & Inclusive Education Federal Agency: U.S. Department of Education Assistance Listing Title: Special Education Cluster (IDEA) (COVID-19) Assistance Listing Number: 84.027, 84.173 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332; 2 CFR 200.521 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the 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. The Department must issue a management decision for audit findings that relate to Federal awards provided to the subrecipient within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Condition: The Department of Education’s (DOE) School Finance and Operations team within the Commissioner’s Office, in conjunction with DOE’s Office of Special Services & Inclusive Education, is responsible for tracking and reviewing subrecipient audits and issuing management decisions on Special Education Cluster (SEC) subrecipient audit findings. SEC program subrecipients consist of Local Education Agencies and organizations that are provided Federal funding for special education programs. The Office of the State Auditor (OSA) reviewed 23 SEC subrecipients to ensure proper tracking and review of Single Audit Reports, audit findings, and DOE management decisions in response to findings related to SEC funding. For 2 of the 23 subrecipients, OSA requested documentation of management decisions pertaining to findings included in the Single Audit Reports. DOE could not provide management decision letters documenting consideration, review, and approval of the subrecipients’ corrective action plans. OSA selected a non-statistical random sample. Context: In fiscal year 2023, the Department expended $71.6 million in SEC program funds, of which $66.8 million was provided to 258 subrecipients. Based on OSA’s review, approximately 120 subrecipients were required to undergo a Single Audit in accordance with Federal regulations. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients not complying with Federal statutes, regulations, or the terms and conditions of SEC subawards may not be implementing appropriate corrective action in response to audit findings. Recommendation: We recommend that the Department enhance policies and procedures to ensure that adequate documentation is maintained during the review of audit findings, and that management decisions related to audit findings and corrective action are issued timely to subrecipients. Corrective Action Plan: See F-28 Management’s Response: The Department agrees with this finding. The Department will review the current procedure regarding the notification of management decisions related to audit findings and corrective action, to strengthen the areas where prior notifications were missed. Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161 (State Number: 23-1201-01)
(2023-063) Title: Internal control over Special Education subrecipient audit procedures needs improvement Prior Year Findings: None State Department: Education State Bureau: Commissioner’s Office Special Services & Inclusive Education Federal Agency: U.S. Department of Education Assistance Listing Title: Special Education Cluster (IDEA) (COVID-19) Assistance Listing Number: 84.027, 84.173 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332; 2 CFR 200.521 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the 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. The Department must issue a management decision for audit findings that relate to Federal awards provided to the subrecipient within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Condition: The Department of Education’s (DOE) School Finance and Operations team within the Commissioner’s Office, in conjunction with DOE’s Office of Special Services & Inclusive Education, is responsible for tracking and reviewing subrecipient audits and issuing management decisions on Special Education Cluster (SEC) subrecipient audit findings. SEC program subrecipients consist of Local Education Agencies and organizations that are provided Federal funding for special education programs. The Office of the State Auditor (OSA) reviewed 23 SEC subrecipients to ensure proper tracking and review of Single Audit Reports, audit findings, and DOE management decisions in response to findings related to SEC funding. For 2 of the 23 subrecipients, OSA requested documentation of management decisions pertaining to findings included in the Single Audit Reports. DOE could not provide management decision letters documenting consideration, review, and approval of the subrecipients’ corrective action plans. OSA selected a non-statistical random sample. Context: In fiscal year 2023, the Department expended $71.6 million in SEC program funds, of which $66.8 million was provided to 258 subrecipients. Based on OSA’s review, approximately 120 subrecipients were required to undergo a Single Audit in accordance with Federal regulations. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients not complying with Federal statutes, regulations, or the terms and conditions of SEC subawards may not be implementing appropriate corrective action in response to audit findings. Recommendation: We recommend that the Department enhance policies and procedures to ensure that adequate documentation is maintained during the review of audit findings, and that management decisions related to audit findings and corrective action are issued timely to subrecipients. Corrective Action Plan: See F-28 Management’s Response: The Department agrees with this finding. The Department will review the current procedure regarding the notification of management decisions related to audit findings and corrective action, to strengthen the areas where prior notifications were missed. Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161 (State Number: 23-1201-01)
(2023-063) Title: Internal control over Special Education subrecipient audit procedures needs improvement Prior Year Findings: None State Department: Education State Bureau: Commissioner’s Office Special Services & Inclusive Education Federal Agency: U.S. Department of Education Assistance Listing Title: Special Education Cluster (IDEA) (COVID-19) Assistance Listing Number: 84.027, 84.173 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332; 2 CFR 200.521 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the 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. The Department must issue a management decision for audit findings that relate to Federal awards provided to the subrecipient within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Condition: The Department of Education’s (DOE) School Finance and Operations team within the Commissioner’s Office, in conjunction with DOE’s Office of Special Services & Inclusive Education, is responsible for tracking and reviewing subrecipient audits and issuing management decisions on Special Education Cluster (SEC) subrecipient audit findings. SEC program subrecipients consist of Local Education Agencies and organizations that are provided Federal funding for special education programs. The Office of the State Auditor (OSA) reviewed 23 SEC subrecipients to ensure proper tracking and review of Single Audit Reports, audit findings, and DOE management decisions in response to findings related to SEC funding. For 2 of the 23 subrecipients, OSA requested documentation of management decisions pertaining to findings included in the Single Audit Reports. DOE could not provide management decision letters documenting consideration, review, and approval of the subrecipients’ corrective action plans. OSA selected a non-statistical random sample. Context: In fiscal year 2023, the Department expended $71.6 million in SEC program funds, of which $66.8 million was provided to 258 subrecipients. Based on OSA’s review, approximately 120 subrecipients were required to undergo a Single Audit in accordance with Federal regulations. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients not complying with Federal statutes, regulations, or the terms and conditions of SEC subawards may not be implementing appropriate corrective action in response to audit findings. Recommendation: We recommend that the Department enhance policies and procedures to ensure that adequate documentation is maintained during the review of audit findings, and that management decisions related to audit findings and corrective action are issued timely to subrecipients. Corrective Action Plan: See F-28 Management’s Response: The Department agrees with this finding. The Department will review the current procedure regarding the notification of management decisions related to audit findings and corrective action, to strengthen the areas where prior notifications were missed. Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161 (State Number: 23-1201-01)
(2023-063) Title: Internal control over Special Education subrecipient audit procedures needs improvement Prior Year Findings: None State Department: Education State Bureau: Commissioner’s Office Special Services & Inclusive Education Federal Agency: U.S. Department of Education Assistance Listing Title: Special Education Cluster (IDEA) (COVID-19) Assistance Listing Number: 84.027, 84.173 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332; 2 CFR 200.521 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the 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. The Department must issue a management decision for audit findings that relate to Federal awards provided to the subrecipient within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Condition: The Department of Education’s (DOE) School Finance and Operations team within the Commissioner’s Office, in conjunction with DOE’s Office of Special Services & Inclusive Education, is responsible for tracking and reviewing subrecipient audits and issuing management decisions on Special Education Cluster (SEC) subrecipient audit findings. SEC program subrecipients consist of Local Education Agencies and organizations that are provided Federal funding for special education programs. The Office of the State Auditor (OSA) reviewed 23 SEC subrecipients to ensure proper tracking and review of Single Audit Reports, audit findings, and DOE management decisions in response to findings related to SEC funding. For 2 of the 23 subrecipients, OSA requested documentation of management decisions pertaining to findings included in the Single Audit Reports. DOE could not provide management decision letters documenting consideration, review, and approval of the subrecipients’ corrective action plans. OSA selected a non-statistical random sample. Context: In fiscal year 2023, the Department expended $71.6 million in SEC program funds, of which $66.8 million was provided to 258 subrecipients. Based on OSA’s review, approximately 120 subrecipients were required to undergo a Single Audit in accordance with Federal regulations. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients not complying with Federal statutes, regulations, or the terms and conditions of SEC subawards may not be implementing appropriate corrective action in response to audit findings. Recommendation: We recommend that the Department enhance policies and procedures to ensure that adequate documentation is maintained during the review of audit findings, and that management decisions related to audit findings and corrective action are issued timely to subrecipients. Corrective Action Plan: See F-28 Management’s Response: The Department agrees with this finding. The Department will review the current procedure regarding the notification of management decisions related to audit findings and corrective action, to strengthen the areas where prior notifications were missed. Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161 (State Number: 23-1201-01)
(2023-067) Title: Internal control over ESF subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Education State Bureau: Commissioner’s Office Federal Agency: U.S. Department of Education Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19) Assistance Listing Number: 84.425D, 84.425R, 84.425U Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.313; 2 CFR 200.332 The Department must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Department is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. For equipment acquired with Federal funding, records must be maintained that include: • a description and identification number; • the source of funding, including the Federal Award Identification Number; • who holds title and the acquisition date; • the cost of the property, including the percentage of Federal participation in the project costs for the Federal award under which the property was acquired; • the location, use and condition; and • any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. The Department must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The Education Stabilization Fund (ESF) provides funding to school administrative units (SAUs) to purchase equipment for use in preventing, preparing for, or responding to the COVID-19 pandemic. SAUs were required to submit applications to the Office of Federal Emergency Relief Programs (OFERP) under the Department of Education outlining identified uses for ESF, including planned equipment purchases. Program coordinators within OFERP were responsible for reviewing and approving applications submitted by SAUs. Once there was an approved application on file, SAUs could submit reimbursement requests to the Department for equipment purchases identified and approved in the application. All SAU equipment purchases reimbursed with ESF are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Federal regulations for equipment and real property management. During fiscal year 2023, the Department did not have policies and procedures in place to track SAU equipment purchases reimbursed with ESF; therefore, the Department does not have assurance that: • a complete and accurate record of all equipment purchased with ESF funds was maintained by each SAU. • proper monitoring activities surrounding subrecipient compliance with Federal regulations for equipment and real property management were conducted. Context: In fiscal year 2023, ESF expenditures totaled $178.2 million, of which $167.8 million was paid to subrecipient SAUs. Cause: • Lack of policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients may not be in compliance with equipment and real property management requirements. • Assets purchased with ESF funds may not be properly safeguarded or maintained. Recommendation: We recommend that the Department implement policies and procedures to ensure that a complete and accurate record of all equipment purchased under ESF is maintained by the Department and by each SAU. This record should be utilized during subrecipient monitoring activities to verify subrecipient compliance with Federal regulations. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this finding. The Office of Federal Emergency Relief Programs has developed and will be implementing a procedure to maintain complete and accurate records of all equipment purchased with ESF by each SAU. Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180 (State Number: 23-1235-04)
(2023-067) Title: Internal control over ESF subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Education State Bureau: Commissioner’s Office Federal Agency: U.S. Department of Education Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19) Assistance Listing Number: 84.425D, 84.425R, 84.425U Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.313; 2 CFR 200.332 The Department must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Department is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. For equipment acquired with Federal funding, records must be maintained that include: • a description and identification number; • the source of funding, including the Federal Award Identification Number; • who holds title and the acquisition date; • the cost of the property, including the percentage of Federal participation in the project costs for the Federal award under which the property was acquired; • the location, use and condition; and • any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. The Department must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The Education Stabilization Fund (ESF) provides funding to school administrative units (SAUs) to purchase equipment for use in preventing, preparing for, or responding to the COVID-19 pandemic. SAUs were required to submit applications to the Office of Federal Emergency Relief Programs (OFERP) under the Department of Education outlining identified uses for ESF, including planned equipment purchases. Program coordinators within OFERP were responsible for reviewing and approving applications submitted by SAUs. Once there was an approved application on file, SAUs could submit reimbursement requests to the Department for equipment purchases identified and approved in the application. All SAU equipment purchases reimbursed with ESF are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Federal regulations for equipment and real property management. During fiscal year 2023, the Department did not have policies and procedures in place to track SAU equipment purchases reimbursed with ESF; therefore, the Department does not have assurance that: • a complete and accurate record of all equipment purchased with ESF funds was maintained by each SAU. • proper monitoring activities surrounding subrecipient compliance with Federal regulations for equipment and real property management were conducted. Context: In fiscal year 2023, ESF expenditures totaled $178.2 million, of which $167.8 million was paid to subrecipient SAUs. Cause: • Lack of policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients may not be in compliance with equipment and real property management requirements. • Assets purchased with ESF funds may not be properly safeguarded or maintained. Recommendation: We recommend that the Department implement policies and procedures to ensure that a complete and accurate record of all equipment purchased under ESF is maintained by the Department and by each SAU. This record should be utilized during subrecipient monitoring activities to verify subrecipient compliance with Federal regulations. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this finding. The Office of Federal Emergency Relief Programs has developed and will be implementing a procedure to maintain complete and accurate records of all equipment purchased with ESF by each SAU. Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180 (State Number: 23-1235-04)
(2023-067) Title: Internal control over ESF subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Education State Bureau: Commissioner’s Office Federal Agency: U.S. Department of Education Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19) Assistance Listing Number: 84.425D, 84.425R, 84.425U Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.313; 2 CFR 200.332 The Department must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Department is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. For equipment acquired with Federal funding, records must be maintained that include: • a description and identification number; • the source of funding, including the Federal Award Identification Number; • who holds title and the acquisition date; • the cost of the property, including the percentage of Federal participation in the project costs for the Federal award under which the property was acquired; • the location, use and condition; and • any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. The Department must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The Education Stabilization Fund (ESF) provides funding to school administrative units (SAUs) to purchase equipment for use in preventing, preparing for, or responding to the COVID-19 pandemic. SAUs were required to submit applications to the Office of Federal Emergency Relief Programs (OFERP) under the Department of Education outlining identified uses for ESF, including planned equipment purchases. Program coordinators within OFERP were responsible for reviewing and approving applications submitted by SAUs. Once there was an approved application on file, SAUs could submit reimbursement requests to the Department for equipment purchases identified and approved in the application. All SAU equipment purchases reimbursed with ESF are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Federal regulations for equipment and real property management. During fiscal year 2023, the Department did not have policies and procedures in place to track SAU equipment purchases reimbursed with ESF; therefore, the Department does not have assurance that: • a complete and accurate record of all equipment purchased with ESF funds was maintained by each SAU. • proper monitoring activities surrounding subrecipient compliance with Federal regulations for equipment and real property management were conducted. Context: In fiscal year 2023, ESF expenditures totaled $178.2 million, of which $167.8 million was paid to subrecipient SAUs. Cause: • Lack of policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients may not be in compliance with equipment and real property management requirements. • Assets purchased with ESF funds may not be properly safeguarded or maintained. Recommendation: We recommend that the Department implement policies and procedures to ensure that a complete and accurate record of all equipment purchased under ESF is maintained by the Department and by each SAU. This record should be utilized during subrecipient monitoring activities to verify subrecipient compliance with Federal regulations. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this finding. The Office of Federal Emergency Relief Programs has developed and will be implementing a procedure to maintain complete and accurate records of all equipment purchased with ESF by each SAU. Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180 (State Number: 23-1235-04)
(2023-069) Title: Internal control over ICA program subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must: • include Federal award information in the subaward that enables subrecipients to identify the source of the Federal award, as well as certain subrecipient information. • evaluate each subrecipient’s risk of noncompliance with Federal regulations for the purposes of determining the appropriate level of subrecipient monitoring to be performed. • monitor the activities of the subrecipient as necessary to ensure that subawards are used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Condition: The Department is responsible for ensuring subrecipients comply with Federal requirements by: • reviewing subrecipient grant awards to ensure accurate Federal award identification information is included to allow subrecipients to accurately identify the source of the subawards; • utilizing risk evaluations to determine the appropriate level of monitoring activities to be performed that correspond to the results of those risk evaluations; and • performing ongoing monitoring activities to ensure that the subaward was used for authorized purposes and in compliance with Federal regulations. The Office of the State Auditor (OSA) tested compliance with subrecipient monitoring requirements for eight subrecipients and found that: • three subawards did not properly identify required Federal award information: o one subaward was missing the subrecipient’s Data Universal Numbering System (DUNS) number. o three subawards reported the wrong Assistance Listing Number and title. • two subrecipients were deemed “higher risk” after the Department performed a risk evaluation; however, the Department could not provide documentation to support that additional monitoring activities were performed in response to the “higher risk” designation. • 35 financial reports were required to be completed and submitted for fiscal year 2023 to ensure subawards are used for approved budgeted expenditures; however, 23 could not be provided. • 17 performance reports were required to be completed and submitted for fiscal year 2023 to ensure subaward performance goals are achieved; however, eight could not be provided. The Department could not provide any other documentation to support that subrecipient monitoring procedures to ensure that the subaward was used for authorized purposes occurred during fiscal year 2023. OSA selected a non-statistical random sample. Context: The Department provided $2.7 million to 37 Immunization Cooperative Agreements (ICA) program subrecipients in fiscal year 2023. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Lack of ongoing subrecipient monitoring procedures could result in undetected subrecipient noncompliance. Recommendation: We recommend that the Department enhance policies and procedures to ensure that: • subaward agreements include all required information and are accurate; • risk evaluations are utilized to determine the appropriate level of monitoring activities to be performed; and • ongoing subrecipient monitoring is completed during the subaward and documented. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this Finding. Presently, the Department engages in at least monthly meetings with subrecipients during which quarterly progress reports, quarterly financial reports, and workplans are reviewed and assessed for compliance. The Department documents its review of subrecipients’ quarterly progress and financial reports in a quarterly review template. Additionally, the Department completes annual monitoring visits with subrecipients to monitor their compliance and documents findings during those visits in a sub monitoring visit template. The Department also meets on an as-needed basis with subrecipients to address emerging challenges and concerns and meet subrecipients’ technical assistance needs to support their compliance. Contact: Eden Silverthorne, Associate Director, Office of Population Health Equity, MeCDC, DHHS, 207-441-1090 (State Number: 23-1118-02)
(2023-069) Title: Internal control over ICA program subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must: • include Federal award information in the subaward that enables subrecipients to identify the source of the Federal award, as well as certain subrecipient information. • evaluate each subrecipient’s risk of noncompliance with Federal regulations for the purposes of determining the appropriate level of subrecipient monitoring to be performed. • monitor the activities of the subrecipient as necessary to ensure that subawards are used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Condition: The Department is responsible for ensuring subrecipients comply with Federal requirements by: • reviewing subrecipient grant awards to ensure accurate Federal award identification information is included to allow subrecipients to accurately identify the source of the subawards; • utilizing risk evaluations to determine the appropriate level of monitoring activities to be performed that correspond to the results of those risk evaluations; and • performing ongoing monitoring activities to ensure that the subaward was used for authorized purposes and in compliance with Federal regulations. The Office of the State Auditor (OSA) tested compliance with subrecipient monitoring requirements for eight subrecipients and found that: • three subawards did not properly identify required Federal award information: o one subaward was missing the subrecipient’s Data Universal Numbering System (DUNS) number. o three subawards reported the wrong Assistance Listing Number and title. • two subrecipients were deemed “higher risk” after the Department performed a risk evaluation; however, the Department could not provide documentation to support that additional monitoring activities were performed in response to the “higher risk” designation. • 35 financial reports were required to be completed and submitted for fiscal year 2023 to ensure subawards are used for approved budgeted expenditures; however, 23 could not be provided. • 17 performance reports were required to be completed and submitted for fiscal year 2023 to ensure subaward performance goals are achieved; however, eight could not be provided. The Department could not provide any other documentation to support that subrecipient monitoring procedures to ensure that the subaward was used for authorized purposes occurred during fiscal year 2023. OSA selected a non-statistical random sample. Context: The Department provided $2.7 million to 37 Immunization Cooperative Agreements (ICA) program subrecipients in fiscal year 2023. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Lack of ongoing subrecipient monitoring procedures could result in undetected subrecipient noncompliance. Recommendation: We recommend that the Department enhance policies and procedures to ensure that: • subaward agreements include all required information and are accurate; • risk evaluations are utilized to determine the appropriate level of monitoring activities to be performed; and • ongoing subrecipient monitoring is completed during the subaward and documented. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this Finding. Presently, the Department engages in at least monthly meetings with subrecipients during which quarterly progress reports, quarterly financial reports, and workplans are reviewed and assessed for compliance. The Department documents its review of subrecipients’ quarterly progress and financial reports in a quarterly review template. Additionally, the Department completes annual monitoring visits with subrecipients to monitor their compliance and documents findings during those visits in a sub monitoring visit template. The Department also meets on an as-needed basis with subrecipients to address emerging challenges and concerns and meet subrecipients’ technical assistance needs to support their compliance. Contact: Eden Silverthorne, Associate Director, Office of Population Health Equity, MeCDC, DHHS, 207-441-1090 (State Number: 23-1118-02)
(2023-078) Title: Internal control over TANF subrecipient risk evaluation procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Office of Child and Family Services Division of Contract Management Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 93.558 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in 2 CFR 200.332. Condition: The Department has established subrecipient monitoring procedures depending on whether the subaward is competitively bid or not. If a subaward is competitively bid, the Department’s Division of Contract Management’s (DCM) Competitive Procurement Unit seeks input from the Department of Health and Human Services’ Service Center, the Department’s Division of Audit, and DCM’s Contracts Unit regarding known issues with the provider who submitted the bid. Those responses are collected and provided to the evaluation team which consists of various program personnel. The subaward agreement is then drafted and the level of subrecipient monitoring is included in the agreement. If a subaward is not competitively bid, the subaward agreement is drafted based on the level of subrecipient monitoring that the Department has established for the provided services. The Office of the State Auditor (OSA) selected seven TANF subrecipients, which included seven subawards that were competitively bid and six subawards that were not competitively bid and found that for: • three competitively bid subawards, DCM provided evidence to support that feedback was solicited from other Bureaus for any known issues or prior noncompliance; however, evidence could not be provided to support the level of subrecipient monitoring that was completed. • four competitively bid subawards, DCM could not provide evidence to support that feedback was solicited from other Bureaus for any known issues or prior noncompliance. In addition, evidence could not be provided to support the level of subrecipient monitoring that was completed. • six non-competitively bid subawards, evidence could not be provided to support the level of subrecipient monitoring that was completed. OSA selected a non-statistical random sample. Context: The Department provided $31.7 million from a total of $91.8 million to TANF subrecipients during fiscal year 2023. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Without a documented process, subrecipient risk evaluation procedures may not be consistently followed, and documentation may not be adequately maintained. • Subrecipients that are deemed higher risk may not be monitored on a more frequent basis. Conversely, subrecipients that are deemed lower risk may not be monitored on a less frequent basis, which would free resources and time to dedicate towards other higher risk subrecipients. Recommendation: We recommend that the Department: • document procedures that outline the collaborative process with all Bureaus. • implement policies and procedures that require evaluation of each subrecipient’s risk of noncompliance specifically for the purposes of determining the appropriate subrecipient monitoring to be performed. This will ensure subrecipients are monitored appropriately based on risk designation. Corrective Action Plan: See F-33 Management’s Response: The Department disagrees with this finding. The Department has subrecipient monitoring procedures for all of its subrecipients whether they were competitively bid or not. The first assessment of risk, as noted in the finding, is when a subaward is competitively bid. Secondly, another risk assessment built into the Maine Uniform Accounting and Auditing Practices for Community Agencies (MAAP), requires higher risk subrecipients to undergo a higher level of testing. Additionally, there are audit and review requirements at a much lower threshold than that of the Uniform Guidance (UG). Finally, the Social Service Unit of the Division of Audit performs a risk assessment and tests transactions for those subrecipients that have been determined to be higher risk. The Department's subrecipient monitoring procedures ensures that we comply with the UG 200.332(d) Pass-through entity (PTE) monitoring of the subrecipient must include: 1) Review of financial and performance reports. 2) Following-up and ensuring that subrecipients take timely and appropriate action on all deficiencies. 3) Issues management decisions. 4) PTE is responsible for resolving audit findings specifically related to the subaward. Based on the Department's MAAP rules we ensure we comply with UG 200.332(e) Depending on the PTE's assessment of risk, the following tools may be useful: 1) Training and technical assistance. 2) On-site reviews. 3) Arranging for agreed upon procedures. The Department covers #3 by ensuring that all of our subrecipients have a requirement to submit to the Department a/an Audit, Review or Schedule of Expenditures of Department Awards (SEDA). Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075 Auditor’s Concluding Remarks: The Department has misinterpreted the Federal regulation cited in this finding. The Department has responded to 2 CFR 200.332(d), which identifies monitoring procedures to be conducted during the subrecipient award period. OSA audited compliance with this during-the-award monitoring requirement and did not identify deficiencies. The Federal regulation that the Department failed to meet is 2 CFR 200.332(b). This regulation identifies procedures to be performed prior to monitoring procedures in order to determine the level of monitoring required for each subrecipient. 2 CFR 200.332(b) states that the Department must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of factors such as: • the subrecipient’s prior experience with the same or similar subawards; • the results of previous audits including whether or not the subrecipient receives a Single Audit, and the extent to which the same or similar subaward has been audited as a major program; • whether the subrecipient has new personnel or new or substantially changed systems; and • the extent and results of Federal awarding agency monitoring. The Department did not provide any documentation to support that monitoring procedures performed were based on an evaluation of the subrecipient’s risk of noncompliance. The finding remains as stated. (State Number: 23-1111-05)
Federal Agency: US Department of Education (ED) Program Name: Elementary and Second School Emergency Relief Fund ALN #: 84.425D Award Numbers: 826 DOE ISBE Loyola Partnership; Federal Award Year 2022 - 2023 Questioned Costs: N/A 2023-009. Finding: Lack of Subrecipient Monitoring The University of Illinois Springfield did not properly perform required subrecipient monitoring procedures on a certain subrecipient and the internal controls in place failed to ensure all monitoring procedures were performed. For one out of two subrecipients tested, the University of Illinois Springfield did not properly perform subrecipient monitoring procedures. The incorrect agreement template was used which did not allow for the required data elements and a risk evaluation was not performed in order to ensure accountability of for-profit subrecipients under the Education Stabilization Fund. Uniform Grant Guidance (2 CFR 200.331 and 2 CFR 200.332) requires all pass-through entities to: identify the award and applicable requirements, evaluate risk, monitor the activities of the subrecipient, and ensure accountability of for-profit subrecipients. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that subrecipient monitoring is performed over all subawards. University officials stated due to staff turnover and workload, the agreement template issued was incorrect and a risk assessment was not conducted for the subrecipient. Lack of properly documented evidence of subrecipient monitoring policies and procedures may result in the loss of future funding. (Finding Code No. 2023-009) Recommendation: We recommend the University of Illinois Springfield review current processes and procedures to ensure subrecipient monitoring is performed for all subawards. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agency: US Department of Education (ED) Program Name: Elementary and Second School Emergency Relief Fund ALN #: 84.425D Award Numbers: 826 DOE ISBE Loyola Partnership; Federal Award Year 2022 - 2023 Questioned Costs: N/A 2023-009. Finding: Lack of Subrecipient Monitoring The University of Illinois Springfield did not properly perform required subrecipient monitoring procedures on a certain subrecipient and the internal controls in place failed to ensure all monitoring procedures were performed. For one out of two subrecipients tested, the University of Illinois Springfield did not properly perform subrecipient monitoring procedures. The incorrect agreement template was used which did not allow for the required data elements and a risk evaluation was not performed in order to ensure accountability of for-profit subrecipients under the Education Stabilization Fund. Uniform Grant Guidance (2 CFR 200.331 and 2 CFR 200.332) requires all pass-through entities to: identify the award and applicable requirements, evaluate risk, monitor the activities of the subrecipient, and ensure accountability of for-profit subrecipients. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that subrecipient monitoring is performed over all subawards. University officials stated due to staff turnover and workload, the agreement template issued was incorrect and a risk assessment was not conducted for the subrecipient. Lack of properly documented evidence of subrecipient monitoring policies and procedures may result in the loss of future funding. (Finding Code No. 2023-009) Recommendation: We recommend the University of Illinois Springfield review current processes and procedures to ensure subrecipient monitoring is performed for all subawards. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-003 U.S. Department of the Treasury Assistance Listing Number 21.027 – COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA) Compliance Deficiency over Subrecipient Monitoring Repeat Finding: Yes, 2022-001 Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). A PTE must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: For 1 out of 3 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.332(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-003 U.S. Department of the Treasury Assistance Listing Number 21.027 – COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA) Compliance Deficiency over Subrecipient Monitoring Repeat Finding: Yes, 2022-001 Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). A PTE must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: For 1 out of 3 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.332(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2023-003 U.S. Department of the Treasury Assistance Listing Number 21.027 – COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA) Compliance Deficiency over Subrecipient Monitoring Repeat Finding: Yes, 2022-001 Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). A PTE must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: For 1 out of 3 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.332(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Reference Number: 2023-009 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Federal Agency: U.S. Department of Treasury Pass-Through Entity: N/A Federal Award Number and Year: Fiscal Year 2022-23 Name of Department: County Executive Office Internal Services Department Department of Consumer Business Affairs Department of Aging Category of Finding: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance; Instance of Noncompliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations (CFR) § 200.332, all pass-through entities (PTE) must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification: (i.) Subrecipient name (which must match the name associated with its unique entity identifier); (ii.) Subrecipient's unique entity identifier; (iii.) Federal Award Identification Number (FAIN); (iv.) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v.) Subaward Period of Performance Start and End Date; (vi.) Subaward Budget Period Start and End Date; (vii.) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii.) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix.) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x.) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi.) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii.) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii.) Identification of whether the award is R&D; and (xiv.) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (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. (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. (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. Condition During our audit of the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program, we selected twenty-three (23) subrecipients with active contracts with the County during FY 2022-23. • One (1) contract administered by the Internal Services Department (ISD) did not include one or more of the required elements defined in 2 CFR § 200.332 (a)(1) in the subrecipients’ agreements. • One (1) contract administered by the Department of Consumer Affairs (DCBA) did not include one or more of the required elements defined in 2 CFR § 200.332(a)(1) in the subrecipients’ agreements. • For four (4) contracts administered by the Aging Department (AD), the AD did not perform subrecipient monitoring related to the CSLFRF program during FY 2022-23. Cause Due to the urgency to implement the CSLFRF program, the Notice of Federal Subaward Information was not completed and provided to the subrecipient for two (2) contracts. The AD was not aware of the requirement to conduct subrecipient monitoring related to the CSLFR program and did not perform subrecipient monitoring of four (4) contracts. Effect Failure to provide all the required subaward information may result in subrecipients incorrectly reporting on federal pass-through awards in their Single Audit reports. Failure to document monitoring results in noncompliance with the subrecipient monitoring requirements 2 CFR § 200.332. Questioned Costs Questioned costs were not determinable. Context Of the twenty-three (23) subrecipients selected for testing, which totaled $71,323,434, from a population of 124 subrecipients with expenditures totaling $90,592,053: • The departments did not communicate all of the required subaward data elements for two (2) subrecipients with expenditures totaling $7,305,087. • The AD did not perform subrecipient monitoring for four (4) subrecipients with expenditures totaling $8,542,012. The sample was not a statistically valid sample. Recommendation We recommend the County perform the following: 1. Remind departments that the Notice of Federal Subaward Information is a required attachment for all subrecipient agreements. In addition, subaward contract templates should be reviewed and revised to include placeholders for required information 2 CFR § 200.332(a)(1). 2. For existing subrecipients that were not provided the required elements, provide a letter or amended agreement to include all the required elements of 2 CFR § 200.332(a)(1). 3. Maintain sufficient records of monitoring subrecipients in accordance with subrecipient monitoring requirements.
Questioned Cost $- Finding No. 2023‐008: Subrecipient Monitoring (Significant Deficiency) State Agency: DLNR Federal Agency: Department of Interior AL Number and Title: 15.634 – State Wildlife Grants (R&D Cluster) Award Number and Award Year: F21AP00578 F22AP03438 2022 2022 Repeat Finding? No Condition During our audit, we examined a non‐statistical sample of two subawards and noted the following instances of noncompliance: -Subaward agreements did not include certain required federal award information. -No evidence of pass‐through entity verifying that subrecipients are audited as required by 2 CFR Section 200, Subpart F. Criteria 2 CFR Section 200.332(a) requires subawards to clearly identify information, such as Federal Award Identification Number (FAIN), identification of whether the award is R&D, period of performance, and indirect costs. 2 CFR Section 200.332(f) requires a pass‐through entity to verify that every subrecipient is audited as required by 2 CFR Section 200, Subpart F, when it is expected that the subrecipient’s expenditures exceed applicable thresholds. Effect By not including the required information in the subaward and verifying whether the subrecipient is audited, the State may not be providing the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Program personnel responsible indicated that subaward information was provided and verification of audit was performed, however, no formal documentation of the review was retained. Recommendation We recommend that program management retain evidence of process, including who performed the procedure and the date performed.
Questioned Cost $- Finding No. 2023‐013: Subrecipient Monitoring (Material Weakness) State Agency: DLIR Federal Agency: Department of Labor AL Number and Title: 17.258 – WIOA Adult Program 17.259 – WIOA Youth Activities 17.278 – WIOA Dislocated Worker Formula Grant (WIOA Cluster) Award Number and Award Year: AA‐38525‐22‐55‐A‐15 2022 Repeat Finding? No Condition During our audit, we examined a non‐statistical sample of three subawards and noted the following instances of noncompliance: -No evidence of evaluation of the subrecipients’ risk of noncompliance at the time of the subawards. -No evidence of on‐site monitoring procedures of the subrecipients. Criteria 2 CFR Section 200.332(b) requires a pass‐through entity to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. 2 CFR Section 200.332(d) requires a pass‐through entity to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in accordance with federal statutes and regulations. Effect Without evaluating the subrecipient’s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not provide the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints, program personnel were unable to perform the subrecipient’s risk of noncompliance and on‐going monitoring procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200, which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State department’s responsibilities as a pass‐through entity are fulfilled, including a formal analysis of each subrecipient’s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: -The subrecipient’s prior experience with the same or similar subawards; -The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; -Whether the subrecipient has new personnel or new or substantially changed systems; and -The extent and results of federal awarding agency monitoring
Questioned Cost $- Finding No. 2023‐013: Subrecipient Monitoring (Material Weakness) State Agency: DLIR Federal Agency: Department of Labor AL Number and Title: 17.258 – WIOA Adult Program 17.259 – WIOA Youth Activities 17.278 – WIOA Dislocated Worker Formula Grant (WIOA Cluster) Award Number and Award Year: AA‐38525‐22‐55‐A‐15 2022 Repeat Finding? No Condition During our audit, we examined a non‐statistical sample of three subawards and noted the following instances of noncompliance: -No evidence of evaluation of the subrecipients’ risk of noncompliance at the time of the subawards. -No evidence of on‐site monitoring procedures of the subrecipients. Criteria 2 CFR Section 200.332(b) requires a pass‐through entity to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. 2 CFR Section 200.332(d) requires a pass‐through entity to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in accordance with federal statutes and regulations. Effect Without evaluating the subrecipient’s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not provide the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints, program personnel were unable to perform the subrecipient’s risk of noncompliance and on‐going monitoring procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200, which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State department’s responsibilities as a pass‐through entity are fulfilled, including a formal analysis of each subrecipient’s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: -The subrecipient’s prior experience with the same or similar subawards; -The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; -Whether the subrecipient has new personnel or new or substantially changed systems; and -The extent and results of federal awarding agency monitoring
Questioned Cost $- Finding No. 2023‐013: Subrecipient Monitoring (Material Weakness) State Agency: DLIR Federal Agency: Department of Labor AL Number and Title: 17.258 – WIOA Adult Program 17.259 – WIOA Youth Activities 17.278 – WIOA Dislocated Worker Formula Grant (WIOA Cluster) Award Number and Award Year: AA‐38525‐22‐55‐A‐15 2022 Repeat Finding? No Condition During our audit, we examined a non‐statistical sample of three subawards and noted the following instances of noncompliance: -No evidence of evaluation of the subrecipients’ risk of noncompliance at the time of the subawards. -No evidence of on‐site monitoring procedures of the subrecipients. Criteria 2 CFR Section 200.332(b) requires a pass‐through entity to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. 2 CFR Section 200.332(d) requires a pass‐through entity to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in accordance with federal statutes and regulations. Effect Without evaluating the subrecipient’s risk of noncompliance and determining the appropriate subrecipient monitoring procedures necessary, the State may not provide the appropriate level of monitoring over its subrecipients. Cause and View of Responsible Officials Due to resource constraints, program personnel were unable to perform the subrecipient’s risk of noncompliance and on‐going monitoring procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200, which requires the reporting of all necessary federal award information to subrecipients and risk assessments of subrecipients. Management should develop procedures that ensure the State department’s responsibilities as a pass‐through entity are fulfilled, including a formal analysis of each subrecipient’s risk of noncompliance with each of the respective subaward requirements. This evaluation of risk may include consideration of such factors as the following: -The subrecipient’s prior experience with the same or similar subawards; -The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; -Whether the subrecipient has new personnel or new or substantially changed systems; and -The extent and results of federal awarding agency monitoring
Federal Program Information Funding Agency: U.S. Department of Education Title: 21ST Century Community Learning Centers AL Number: 84.287 Criteria The Cooperative is responsible for overseeing and monitoring subrecipients and must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate subrecipient monitoring. (2 CFR section 200.332(b)) Condition Of the 12 subrecipient school districts, the Cooperative was able to provide 3 of the annual monitoring reports. In addition, the Cooperative does not review subrecipient audit reports. Questioned Costs None. Context We reviewed 3 of the 12 subrecipient monitoring reports. Effect The Cooperative did not properly monitor the subrecipients, which could lead to noncompliance. Cause During our testing of the Cooperative’s internal controls, it was noted that there was not proper controls in place for subrecipient monitoring. Repeat Finding This is not a repeat finding. Recommendation The Cooperative should ensure controls are in place to properly review and monitor subrecipients. Management’s Response The Cooperative agrees with the recommendation and will ensure controls are in place to properly review and monitor subrecipients.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CAREER AND TECHNICAL EDUCATION – BASIC GRANTS TO STATES – FEDERAL ALN 84.048 2023-001 Internal Control Over Compliance With Subrecipient Monitoring Requirements Criteria – 2 CFR § 200.332 requires Intermediate District No. 287 (the District) as a pass through entity, to have written subrecipient monitoring policies and procedures that include a written risk assessment of each subrecipient and documentation of the District’s monitoring of the subrecipient. Additionally, as a pass-through entity, the District is required to verify that every subrecipient is audited as required by 2 CFR § 200 Subpart F when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the threshold for a federal Single Audit. Condition – During our audit, we noted that the District did have documented written controls to ensure compliance with the U.S. Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) subrecipient monitoring requirements. The District did not maintain documentation of its evaluation of each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward, nor did the District maintain documentation of the results of the subrecipients’ Single Audit, if any, for purposes of determining the appropriate subrecipient monitoring. Questioned Costs – Not applicable. Context – The District passed through $451,191 to nine subrecipients during the fiscal year. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Effect – This could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures relating to subrecipient monitoring for all federal programs. We recommend the District identify subrecipients and maintain documentation of written risk assessments of each subrecipient, that includes a consideration of the subrecipient’s Single Audit results, if any. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District is in the process of reviewing its internal control procedures and updating its written policies and procedures relating to subrecipient monitoring for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
Item #2023-001 Subrecipient Monitoring International Programs to Support Democracy Human Rights and Labor – 19.345 Criteria: 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 per 2 CFR 200.332. Condition and Context: The Agency did not fully monitor the subrecipients to ensure the subaward was 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. Cause: Management did not have internal control over subrecipient monitoring to fully address requirements under 2 CFR 200.332 Effect or Potential Effect: The Agency did not timely monitor the subrecipients in a timely fashion. Subsequent to year end the Agency retroactively monitored these activities and determined that one of the four subrecipients did not fully comply with required documentation and determined that $23,134 of costs billed to the contract were not allowable. Questioned Costs: N/A Repeat Finding: No Recommendation: Management should continue to monitor the internal controls established as part of their subsequent to year end activities to ensure all compliance requirements are conducted in a timely manner. Views of Responsible Officials: Subsequent to year end, the Agency implemented internal controls over subrecipient monitoring and retroactively performed these compliance procedures.
Emergency Rental Assistance Program—Subrecipient Monitoring Background: The ERA Program was established in FY 2020-21 under the federal Consolidated Appropriations Act of 2021 and continued in FY 2021-22 and FY 2022-23 under ARPA. Treasury provided funding to DEHCR for the ERA Program. The program was established to assist households that are unable to pay rent or utilities. DOA established the WERA program using the federal ERA Program funding. To administer the WERA program, DOA contracted with community action agencies and ESI to intake and review applications for eligibility. The community action agencies and ESI were responsible for entering the applications into DOA’s HE Plus computer system, which was used to determine and process the benefit payment amounts. Criteria: Section 2 CFR s. 200.332 (d) through (f) requires DOA to monitor the activities of the community action agencies and ESI as necessary to ensure that the community action agencies and ESI use the subaward for authorized purposes, take timely and appropriate action on all deficiencies detected through monitoring, and comply with the terms and conditions of the subaward. DOA’s policies and procedures for monitoring the community action agencies and ESI under the WERA program require DOA staff to review approximately four percent of all WERA applications weekly to assess that the documentation is accurate and complete, and that the applicants are eligible. DOA staff are required to outreach to the staff at the community action agencies or ESI to resolve any omission or error. The community action agencies or ESI is required to take corrective action, which may include obtaining documentation and adding it to HE Plus within seven to ten business days. Condition: During FY 2022-23, DOA did not perform all monitoring required by federal regulations or its policies and procedures. We found that DOA did not complete monitoring of the community action agencies between February 2023 and June 2023. Further, DOA only completed monitoring of ESI during the months of January 2023 and June 2023. For the monitoring DOA did complete in FY 2022-23, we reviewed the documentation for seven of the weeks and found that DOA staff identified 69 applications where the community action agency or ESI did not include sufficient documentation in HE Plus to demonstrate that the applicant was eligible to receive benefits under the program or that the costs were allowable to be funded by the WERA program. We reviewed 21 of the 69 applications for which DOA had identified documentation concerns and found that 16 of the 21 had not been resolved in HE Plus at the time of our fieldwork in February 2024. The documentation concerns were identified in DOA’s monitoring reviews, which took place in August 2022, October 2022, and January 2023. When we requested documentation of DOA’s communications with the community action agencies or ESI, DOA staff told us they did not communicate the results of the reviews to the community action agencies or ESI. Context: In FY 2022-23, DOA processed $98.9 million in ERA Program benefit payments using HE Plus. A total of 25,201 applicants were reported in HE Plus as having received benefit payments under the ERA Program in FY 2022-23. We reviewed and discussed DOA’s procedures for tracking and completing monitoring for the community action agencies and ESI. We also evaluated the monitoring completed in FY 2022-23. We selected 21 of the 69 applications for which DOA’s weekly monitoring identified documentation concerns, missing signatures, or other errors and for which the applicant received ERA Program benefits in FY 2022 23. We reviewed available documentation related to these applications in HE Plus. Questioned Costs: We question an undetermined amount for individuals that DOA identified in their monitoring of the community action agencies or ESI that did not have sufficient documentation in HE Plus. Effect: Because DOA did not ensure the community action agencies and ESI were taking timely and appropriate action on the deficiencies detected through monitoring for the ERA Program, there is a higher risk that DOA, ESI, and the community action agencies are not in compliance with all federal requirements. In addition, DOA provided rental assistance to applicants who may have been ineligible to receive ERA Program benefits, which may have resulted in improper payments. Cause: DOA staff indicated that monitoring of ESI was inadvertently missed. In addition, DOA indicated that monitoring was temporarily stopped between February 2023 and June 2023 because of a temporary pause in accepting new WERA applications in HE Plus as ESI and community action agencies processed a backlog of existing WERA applications. However, the processing of backlogged applications created new applications in HE Plus that required monitoring. In addition, DOA did not have adequate management oversight to ensure its established monitoring procedures were being followed. DOA noted that there was no procedure in place for management oversight of the monitoring program in FY 2022-23. Recommendation: We recommend the Wisconsin Department of Administration: -review its existing monitoring procedures and ensure adequate management oversight procedures are established, documented, and followed; -complete review and follow-up with the community action agencies or Energy Services, Inc. (ESI) identified by its existing monitoring procedures; and -consider if additional monitoring should be completed for the community action agencies or ESI for the months during FY 2022-23 when the Department of Administration paused monitoring for the Emergency Rental Assistance Program. Finding 2023-103: Emergency Rental Assistance Program—Subrecipient Monitoring COVID-19—Emergency Rental Assistance Program (Assistance Listing number 21.023) Award Number Award Year None 2021 Questioned Costs: Undetermined Type of Finding: Material Weakness, Material Noncompliance As a result, we qualified our opinion on compliance for the subrecipient monitoring compliance requirement. Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendations.
Geographic Programs - Great Lakes Restoration Initiative—Subrecipient Monitoring Background: DNR receives federal funding from the U.S. Environmental Protection Agency (EPA) for the GLRI program. The objective of the GLRI program is to advance protection and restoration of the Great Lakes Basin Ecosystem. To administer the GLRI program, DNR contracts with subrecipients located around the State, including counties, cities, and sewage districts. Criteria: DNR administers federal programs that are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Uniform Guidance includes three requirements related to the monitoring of subrecipients. First, 2 CFR s. 200.332 (a) (1) requires DNR to communicate certain award information to subrecipients at the time of the subaward. Second, 2 CFR s. 200.332 (b) requires DNR to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring. Finally, 2 CFR s. 200.332 (d) through (f) requires DNR to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. An EPA subaward policy further clarifies that the Uniform Guidance provisions are applicable to its grant programs, including a requirement for DNR to establish and follow a system for evaluating the risks of subrecipient noncompliance with laws, regulations, and the terms and conditions of the subaward, as required by 2 CFR ss. 200.332 (b) and (d). This policy also requires DNR to document its evaluations. In addition, EPA’s policy requires that DNR establish and follow a process for deciding whether to impose additional requirements on subrecipients based on the risk assessments. Condition: DNR did not have documentation that it completed risk assessments for GLRI subrecipients during FY 2022-23. Although DNR reviewed subrecipient reimbursement requests and progress reports as its primary monitoring activity, the sufficiency of this level of monitoring cannot be assured without performing the required risk assessments. We also found that DNR did not obtain the single audit report from the Federal Audit Clearinghouse (FAC) or have documentation to support that it completed a review of the report for the largest subrecipient that received GLRI program funding in FY 2022 23. Context: DNR expended $13.2 million under the GLRI program during FY 2022-23, including $7.2 million that it provided to 18 subrecipients. We interviewed DNR staff to gain an understanding of its procedures for monitoring subrecipients. We reviewed the agreements between DNR and subrecipients to identify whether DNR had communicated the required award information to subrecipients. We also reviewed monitoring activities DNR performed for the GLRI program, including DNR’s process to review subrecipient single audit reports and DNR’s monitoring of subrecipients through progress reporting and reimbursement requests. Questioned Costs: None. Effect: Because DNR did not comply with all subrecipient monitoring compliance requirements for the GLRI program, there is a higher risk that DNR and its subrecipients are not in compliance with all federal requirements. Cause: DNR did not have a plan to monitor subrecipients for the GLRI program based on subrecipient risk assessments. DNR attributed the lack of documented risk assessments for GLRI program subrecipients to its close working relationship with the subrecipients and its reliance on program managers to assess and complete monitoring as needed. In addition, DNR did not have sufficient procedures in place to ensure all GLRI subrecipient single audit reports were being obtained and reviewed. DNR staff indicated that they relied on the subrecipient to notify DNR when a single audit report was submitted to the FAC rather than DNR staff independently identifying and reviewing all relevant GLRI subrecipient single audit reports submitted to the FAC. Further, the DNR staff person completing single audit report reviews for DNR grant programs was not aware of all 18 GLRI subrecipients and had not requested this information in order to independently identify from the FAC those single audit reports that should have been reviewed. Recommendation: We recommend the Wisconsin Department of Natural Resources develop a written monitoring plan for the Geographic Programs - Great Lakes Restoration Initiative program that includes policies and procedures for: -completing risk assessments for each subrecipient; -the specific monitoring steps that are required based on the level of subrecipient risk identified in a risk assessment; -independently identifying and reviewing subrecipient single audit reports, if applicable; and -maintaining documentation of all subrecipient monitoring activities performed. Finding 2023-800: Geographic Programs - Great Lakes Restoration Initiative—Subrecipient Monitoring Geographic Programs - Great Lakes Restoration Initiative (Assistance Listing number 66.469) Award Numbers Award Years 00E01568 2015 00E02252 2017 00E02288 2017 00E02348 2018 00E02349 2018 00E02393 2018 00E02456 2019 00E02490 2019 00E02824 2020 00E02979 2021 00E02975 2021 00E03010 2021 01E03010 2022 00E03149 2022 00E03187 2022 00E03252 2022 00E03250 2022 Questioned Costs: None Type of Finding: Material Weakness, Material Noncompliance As a result, we qualified our opinion on compliance for the subrecipient monitoring compliance requirement. Response from the Wisconsin Department of Natural Resources: The Wisconsin Department of Natural Resources agrees with the audit finding and recommendations.
Geographic Programs - Great Lakes Restoration Initiative—Subrecipient Monitoring Background: DNR receives federal funding from the U.S. Environmental Protection Agency (EPA) for the GLRI program. The objective of the GLRI program is to advance protection and restoration of the Great Lakes Basin Ecosystem. To administer the GLRI program, DNR contracts with subrecipients located around the State, including counties, cities, and sewage districts. Criteria: DNR administers federal programs that are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Uniform Guidance includes three requirements related to the monitoring of subrecipients. First, 2 CFR s. 200.332 (a) (1) requires DNR to communicate certain award information to subrecipients at the time of the subaward. Second, 2 CFR s. 200.332 (b) requires DNR to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring. Finally, 2 CFR s. 200.332 (d) through (f) requires DNR to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. An EPA subaward policy further clarifies that the Uniform Guidance provisions are applicable to its grant programs, including a requirement for DNR to establish and follow a system for evaluating the risks of subrecipient noncompliance with laws, regulations, and the terms and conditions of the subaward, as required by 2 CFR ss. 200.332 (b) and (d). This policy also requires DNR to document its evaluations. In addition, EPA’s policy requires that DNR establish and follow a process for deciding whether to impose additional requirements on subrecipients based on the risk assessments. Condition: DNR did not have documentation that it completed risk assessments for GLRI subrecipients during FY 2022-23. Although DNR reviewed subrecipient reimbursement requests and progress reports as its primary monitoring activity, the sufficiency of this level of monitoring cannot be assured without performing the required risk assessments. We also found that DNR did not obtain the single audit report from the Federal Audit Clearinghouse (FAC) or have documentation to support that it completed a review of the report for the largest subrecipient that received GLRI program funding in FY 2022 23. Context: DNR expended $13.2 million under the GLRI program during FY 2022-23, including $7.2 million that it provided to 18 subrecipients. We interviewed DNR staff to gain an understanding of its procedures for monitoring subrecipients. We reviewed the agreements between DNR and subrecipients to identify whether DNR had communicated the required award information to subrecipients. We also reviewed monitoring activities DNR performed for the GLRI program, including DNR’s process to review subrecipient single audit reports and DNR’s monitoring of subrecipients through progress reporting and reimbursement requests. Questioned Costs: None. Effect: Because DNR did not comply with all subrecipient monitoring compliance requirements for the GLRI program, there is a higher risk that DNR and its subrecipients are not in compliance with all federal requirements. Cause: DNR did not have a plan to monitor subrecipients for the GLRI program based on subrecipient risk assessments. DNR attributed the lack of documented risk assessments for GLRI program subrecipients to its close working relationship with the subrecipients and its reliance on program managers to assess and complete monitoring as needed. In addition, DNR did not have sufficient procedures in place to ensure all GLRI subrecipient single audit reports were being obtained and reviewed. DNR staff indicated that they relied on the subrecipient to notify DNR when a single audit report was submitted to the FAC rather than DNR staff independently identifying and reviewing all relevant GLRI subrecipient single audit reports submitted to the FAC. Further, the DNR staff person completing single audit report reviews for DNR grant programs was not aware of all 18 GLRI subrecipients and had not requested this information in order to independently identify from the FAC those single audit reports that should have been reviewed. Recommendation: We recommend the Wisconsin Department of Natural Resources develop a written monitoring plan for the Geographic Programs - Great Lakes Restoration Initiative program that includes policies and procedures for: -completing risk assessments for each subrecipient; -the specific monitoring steps that are required based on the level of subrecipient risk identified in a risk assessment; -independently identifying and reviewing subrecipient single audit reports, if applicable; and -maintaining documentation of all subrecipient monitoring activities performed. Finding 2023-800: Geographic Programs - Great Lakes Restoration Initiative—Subrecipient Monitoring Geographic Programs - Great Lakes Restoration Initiative (Assistance Listing number 66.469) Award Numbers Award Years 00E01568 2015 00E02252 2017 00E02288 2017 00E02348 2018 00E02349 2018 00E02393 2018 00E02456 2019 00E02490 2019 00E02824 2020 00E02979 2021 00E02975 2021 00E03010 2021 01E03010 2022 00E03149 2022 00E03187 2022 00E03252 2022 00E03250 2022 Questioned Costs: None Type of Finding: Material Weakness, Material Noncompliance As a result, we qualified our opinion on compliance for the subrecipient monitoring compliance requirement. Response from the Wisconsin Department of Natural Resources: The Wisconsin Department of Natural Resources agrees with the audit finding and recommendations.
Aging Cluster—Subrecipient Monitoring Background: The DHHS Administration for Community Living provides funding to DHS for the Aging Cluster. The Aging Cluster provides funds to assist states and area agencies in providing programs and services to support independence and wellness for older adults. To administer the Aging Cluster, DHS contracts with three Area Agencies on Aging and used CARS to process reimbursement requests for the subrecipients. Criteria: DHS administers federal programs that are subject to Uniform Guidance. Uniform Guidance includes the following requirements related to the monitoring of subrecipients: -2 CFR s. 200.332 (b) requires DHS to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring; and -2 CFR s. 200.332 (d) through (f) requires DHS to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. DHS established policies requiring grant administrators to conduct a risk assessment for every subaward of federal funds and to use the risk assessment to determine the frequency and extent of monitoring. DHS policies include a subrecipient risk assessment template to assist grant administrators in completing the risk assessment and determining the risk level of the subrecipient. DHS policies also require grant administrators to monitor subrecipients based on the risk assessment. DHS policies indicate that monitoring must include reviewing financial and performance reports required by DHS. Additionally, per DHS policies, monitoring may include providing subrecipient training and technical assistance, performing desk reviews of the subrecipient’s records, and performing on-site review of the subrecipient’s records and operations. Finally, DHS policies in the Division of Public Health Bureau of Operations Contract Management Manual suggest that when CARS is used to process reimbursement requests, grant administrators should use enhanced expenditure reporting from subrecipients to ensure expenditures are allowable. These policies note that additional verification can be performed by reviewing subrecipient financial records through a desk review or an on-site visit. Condition: DHS performed the required risk assessments for each Area Agency on Aging and, as a part of its plan for monitoring each entity, DHS: -required the submission of both a quarterly financial report and a separate semiannual financial report for use in monitoring activities and to provide information for DHS to prepare semiannual financial reports to submit to the federal government; and -established regular monthly and quarterly program and fiscal oversight meetings to provide a forum for the discussion of issues, to answer questions, and to provide technical guidance. During FY 2022-23, DHS received 10 of the 12 quarterly financial reports from the Area Agencies on Aging. Although DHS indicated it reviewed each quarterly and semiannual financial report submitted by the Area Agencies on Aging, DHS did not document how these reports were reviewed, when they were reviewed, or the extent of the review process. For example, DHS did not have documentation indicating who performed the review. Related to the monthly and quarterly meetings held with the Area Agencies on Aging during FY 2022-23, DHS did not document attendance, agendas, or minutes for these oversight meetings. Context: DHS expended $32.5 million under the Aging Cluster during FY 2022-23, including $31.3 million that was provided to the Area Agencies on Aging. We interviewed DHS staff to gain an understanding of its policies and procedures for monitoring subrecipients for the Aging Cluster, and we reviewed DHS manuals and guidance related to subrecipient monitoring. Questioned Costs: None. Effect: Because its subrecipient monitoring procedures were not documented, DHS cannot demonstrate that it performed adequate monitoring of each Area Agency on Aging. Therefore, DHS is at increased risk of noncompliance with federal regulations for the Aging Cluster. Further, due to the lack of complete quarterly reporting from one Area Agency on Aging, DHS submitted incomplete information in three mid-year financial reports to the federal government. Among these three reports, we estimate that DHS did not report approximately $1.6 million in program income. Cause: Because the program has only three significant subrecipients, the procedures implemented by DHS were more informal and relied on the knowledge of the staff persons performing the monitoring, as well as frequent interactions between DHS staff and each Area Agency on Aging. Formal procedures were not developed and implemented for the tracking, review, and documentation of the receipt and review of the quarterly and the semiannual financial reports. Formal procedures were not developed and implemented for maintaining documentation of oversight meetings that were held. In prior years, DHS had performed an on-site visit as a part of its monitoring plan. As a result of the public health emergency, these on-site visits were not performed during FY 2022-23. Recommendation: We recommend the Wisconsin Department of Health Services: -create a centralized tracking process to monitor the receipt of the quarterly financial reports and semiannual financial reports from each Area Agency on Aging, including follow-up procedures when reports are not provided; -implement procedures to document the review and approval of the quarterly financial reports and semiannual financial reports, including related follow-up and resolution; and -develop and maintain in a central location documentation related to the monitoring procedures performed, including email correspondence or documentation of oversight meetings such as agendas and significant discussion topics. Finding 2023-308: Aging Cluster—Subrecipient Monitoring COVID-19—Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2001WISSC3 2020 2001WISSC6 2020 2101WIVAC5 2021 2101WISTPH 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2101WIOASS 2021 2201WIOASS 2022 2301WIOASS 2023 Questioned Costs: None COVID-19—Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2001WIHDC2 2020 2002WIHDC3 2020 2101WICMC6 2021 2101WIHDC5 2021 2101WIHDC6 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2101WIOACM 2021 2101WIOAHD 2021 2201WIOACM 2022 2201WIOAHD 2022 2301WIOACM 2023 2301WIOAHD 2023 Questioned Costs: None Nutrition Services Incentive Program (Assistance Listing number 93.053) Award Numbers Award Years 2201WIOANS 2022 2301WIOANS 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Aging Cluster—Subrecipient Monitoring Background: The DHHS Administration for Community Living provides funding to DHS for the Aging Cluster. The Aging Cluster provides funds to assist states and area agencies in providing programs and services to support independence and wellness for older adults. To administer the Aging Cluster, DHS contracts with three Area Agencies on Aging and used CARS to process reimbursement requests for the subrecipients. Criteria: DHS administers federal programs that are subject to Uniform Guidance. Uniform Guidance includes the following requirements related to the monitoring of subrecipients: -2 CFR s. 200.332 (b) requires DHS to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring; and -2 CFR s. 200.332 (d) through (f) requires DHS to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. DHS established policies requiring grant administrators to conduct a risk assessment for every subaward of federal funds and to use the risk assessment to determine the frequency and extent of monitoring. DHS policies include a subrecipient risk assessment template to assist grant administrators in completing the risk assessment and determining the risk level of the subrecipient. DHS policies also require grant administrators to monitor subrecipients based on the risk assessment. DHS policies indicate that monitoring must include reviewing financial and performance reports required by DHS. Additionally, per DHS policies, monitoring may include providing subrecipient training and technical assistance, performing desk reviews of the subrecipient’s records, and performing on-site review of the subrecipient’s records and operations. Finally, DHS policies in the Division of Public Health Bureau of Operations Contract Management Manual suggest that when CARS is used to process reimbursement requests, grant administrators should use enhanced expenditure reporting from subrecipients to ensure expenditures are allowable. These policies note that additional verification can be performed by reviewing subrecipient financial records through a desk review or an on-site visit. Condition: DHS performed the required risk assessments for each Area Agency on Aging and, as a part of its plan for monitoring each entity, DHS: -required the submission of both a quarterly financial report and a separate semiannual financial report for use in monitoring activities and to provide information for DHS to prepare semiannual financial reports to submit to the federal government; and -established regular monthly and quarterly program and fiscal oversight meetings to provide a forum for the discussion of issues, to answer questions, and to provide technical guidance. During FY 2022-23, DHS received 10 of the 12 quarterly financial reports from the Area Agencies on Aging. Although DHS indicated it reviewed each quarterly and semiannual financial report submitted by the Area Agencies on Aging, DHS did not document how these reports were reviewed, when they were reviewed, or the extent of the review process. For example, DHS did not have documentation indicating who performed the review. Related to the monthly and quarterly meetings held with the Area Agencies on Aging during FY 2022-23, DHS did not document attendance, agendas, or minutes for these oversight meetings. Context: DHS expended $32.5 million under the Aging Cluster during FY 2022-23, including $31.3 million that was provided to the Area Agencies on Aging. We interviewed DHS staff to gain an understanding of its policies and procedures for monitoring subrecipients for the Aging Cluster, and we reviewed DHS manuals and guidance related to subrecipient monitoring. Questioned Costs: None. Effect: Because its subrecipient monitoring procedures were not documented, DHS cannot demonstrate that it performed adequate monitoring of each Area Agency on Aging. Therefore, DHS is at increased risk of noncompliance with federal regulations for the Aging Cluster. Further, due to the lack of complete quarterly reporting from one Area Agency on Aging, DHS submitted incomplete information in three mid-year financial reports to the federal government. Among these three reports, we estimate that DHS did not report approximately $1.6 million in program income. Cause: Because the program has only three significant subrecipients, the procedures implemented by DHS were more informal and relied on the knowledge of the staff persons performing the monitoring, as well as frequent interactions between DHS staff and each Area Agency on Aging. Formal procedures were not developed and implemented for the tracking, review, and documentation of the receipt and review of the quarterly and the semiannual financial reports. Formal procedures were not developed and implemented for maintaining documentation of oversight meetings that were held. In prior years, DHS had performed an on-site visit as a part of its monitoring plan. As a result of the public health emergency, these on-site visits were not performed during FY 2022-23. Recommendation: We recommend the Wisconsin Department of Health Services: -create a centralized tracking process to monitor the receipt of the quarterly financial reports and semiannual financial reports from each Area Agency on Aging, including follow-up procedures when reports are not provided; -implement procedures to document the review and approval of the quarterly financial reports and semiannual financial reports, including related follow-up and resolution; and -develop and maintain in a central location documentation related to the monitoring procedures performed, including email correspondence or documentation of oversight meetings such as agendas and significant discussion topics. Finding 2023-308: Aging Cluster—Subrecipient Monitoring COVID-19—Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2001WISSC3 2020 2001WISSC6 2020 2101WIVAC5 2021 2101WISTPH 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2101WIOASS 2021 2201WIOASS 2022 2301WIOASS 2023 Questioned Costs: None COVID-19—Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2001WIHDC2 2020 2002WIHDC3 2020 2101WICMC6 2021 2101WIHDC5 2021 2101WIHDC6 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2101WIOACM 2021 2101WIOAHD 2021 2201WIOACM 2022 2201WIOAHD 2022 2301WIOACM 2023 2301WIOAHD 2023 Questioned Costs: None Nutrition Services Incentive Program (Assistance Listing number 93.053) Award Numbers Award Years 2201WIOANS 2022 2301WIOANS 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Aging Cluster—Subrecipient Monitoring Background: The DHHS Administration for Community Living provides funding to DHS for the Aging Cluster. The Aging Cluster provides funds to assist states and area agencies in providing programs and services to support independence and wellness for older adults. To administer the Aging Cluster, DHS contracts with three Area Agencies on Aging and used CARS to process reimbursement requests for the subrecipients. Criteria: DHS administers federal programs that are subject to Uniform Guidance. Uniform Guidance includes the following requirements related to the monitoring of subrecipients: -2 CFR s. 200.332 (b) requires DHS to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring; and -2 CFR s. 200.332 (d) through (f) requires DHS to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. DHS established policies requiring grant administrators to conduct a risk assessment for every subaward of federal funds and to use the risk assessment to determine the frequency and extent of monitoring. DHS policies include a subrecipient risk assessment template to assist grant administrators in completing the risk assessment and determining the risk level of the subrecipient. DHS policies also require grant administrators to monitor subrecipients based on the risk assessment. DHS policies indicate that monitoring must include reviewing financial and performance reports required by DHS. Additionally, per DHS policies, monitoring may include providing subrecipient training and technical assistance, performing desk reviews of the subrecipient’s records, and performing on-site review of the subrecipient’s records and operations. Finally, DHS policies in the Division of Public Health Bureau of Operations Contract Management Manual suggest that when CARS is used to process reimbursement requests, grant administrators should use enhanced expenditure reporting from subrecipients to ensure expenditures are allowable. These policies note that additional verification can be performed by reviewing subrecipient financial records through a desk review or an on-site visit. Condition: DHS performed the required risk assessments for each Area Agency on Aging and, as a part of its plan for monitoring each entity, DHS: -required the submission of both a quarterly financial report and a separate semiannual financial report for use in monitoring activities and to provide information for DHS to prepare semiannual financial reports to submit to the federal government; and -established regular monthly and quarterly program and fiscal oversight meetings to provide a forum for the discussion of issues, to answer questions, and to provide technical guidance. During FY 2022-23, DHS received 10 of the 12 quarterly financial reports from the Area Agencies on Aging. Although DHS indicated it reviewed each quarterly and semiannual financial report submitted by the Area Agencies on Aging, DHS did not document how these reports were reviewed, when they were reviewed, or the extent of the review process. For example, DHS did not have documentation indicating who performed the review. Related to the monthly and quarterly meetings held with the Area Agencies on Aging during FY 2022-23, DHS did not document attendance, agendas, or minutes for these oversight meetings. Context: DHS expended $32.5 million under the Aging Cluster during FY 2022-23, including $31.3 million that was provided to the Area Agencies on Aging. We interviewed DHS staff to gain an understanding of its policies and procedures for monitoring subrecipients for the Aging Cluster, and we reviewed DHS manuals and guidance related to subrecipient monitoring. Questioned Costs: None. Effect: Because its subrecipient monitoring procedures were not documented, DHS cannot demonstrate that it performed adequate monitoring of each Area Agency on Aging. Therefore, DHS is at increased risk of noncompliance with federal regulations for the Aging Cluster. Further, due to the lack of complete quarterly reporting from one Area Agency on Aging, DHS submitted incomplete information in three mid-year financial reports to the federal government. Among these three reports, we estimate that DHS did not report approximately $1.6 million in program income. Cause: Because the program has only three significant subrecipients, the procedures implemented by DHS were more informal and relied on the knowledge of the staff persons performing the monitoring, as well as frequent interactions between DHS staff and each Area Agency on Aging. Formal procedures were not developed and implemented for the tracking, review, and documentation of the receipt and review of the quarterly and the semiannual financial reports. Formal procedures were not developed and implemented for maintaining documentation of oversight meetings that were held. In prior years, DHS had performed an on-site visit as a part of its monitoring plan. As a result of the public health emergency, these on-site visits were not performed during FY 2022-23. Recommendation: We recommend the Wisconsin Department of Health Services: -create a centralized tracking process to monitor the receipt of the quarterly financial reports and semiannual financial reports from each Area Agency on Aging, including follow-up procedures when reports are not provided; -implement procedures to document the review and approval of the quarterly financial reports and semiannual financial reports, including related follow-up and resolution; and -develop and maintain in a central location documentation related to the monitoring procedures performed, including email correspondence or documentation of oversight meetings such as agendas and significant discussion topics. Finding 2023-308: Aging Cluster—Subrecipient Monitoring COVID-19—Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2001WISSC3 2020 2001WISSC6 2020 2101WIVAC5 2021 2101WISTPH 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2101WIOASS 2021 2201WIOASS 2022 2301WIOASS 2023 Questioned Costs: None COVID-19—Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2001WIHDC2 2020 2002WIHDC3 2020 2101WICMC6 2021 2101WIHDC5 2021 2101WIHDC6 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2101WIOACM 2021 2101WIOAHD 2021 2201WIOACM 2022 2201WIOAHD 2022 2301WIOACM 2023 2301WIOAHD 2023 Questioned Costs: None Nutrition Services Incentive Program (Assistance Listing number 93.053) Award Numbers Award Years 2201WIOANS 2022 2301WIOANS 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Aging Cluster—Subrecipient Monitoring Background: The DHHS Administration for Community Living provides funding to DHS for the Aging Cluster. The Aging Cluster provides funds to assist states and area agencies in providing programs and services to support independence and wellness for older adults. To administer the Aging Cluster, DHS contracts with three Area Agencies on Aging and used CARS to process reimbursement requests for the subrecipients. Criteria: DHS administers federal programs that are subject to Uniform Guidance. Uniform Guidance includes the following requirements related to the monitoring of subrecipients: -2 CFR s. 200.332 (b) requires DHS to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring; and -2 CFR s. 200.332 (d) through (f) requires DHS to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. DHS established policies requiring grant administrators to conduct a risk assessment for every subaward of federal funds and to use the risk assessment to determine the frequency and extent of monitoring. DHS policies include a subrecipient risk assessment template to assist grant administrators in completing the risk assessment and determining the risk level of the subrecipient. DHS policies also require grant administrators to monitor subrecipients based on the risk assessment. DHS policies indicate that monitoring must include reviewing financial and performance reports required by DHS. Additionally, per DHS policies, monitoring may include providing subrecipient training and technical assistance, performing desk reviews of the subrecipient’s records, and performing on-site review of the subrecipient’s records and operations. Finally, DHS policies in the Division of Public Health Bureau of Operations Contract Management Manual suggest that when CARS is used to process reimbursement requests, grant administrators should use enhanced expenditure reporting from subrecipients to ensure expenditures are allowable. These policies note that additional verification can be performed by reviewing subrecipient financial records through a desk review or an on-site visit. Condition: DHS performed the required risk assessments for each Area Agency on Aging and, as a part of its plan for monitoring each entity, DHS: -required the submission of both a quarterly financial report and a separate semiannual financial report for use in monitoring activities and to provide information for DHS to prepare semiannual financial reports to submit to the federal government; and -established regular monthly and quarterly program and fiscal oversight meetings to provide a forum for the discussion of issues, to answer questions, and to provide technical guidance. During FY 2022-23, DHS received 10 of the 12 quarterly financial reports from the Area Agencies on Aging. Although DHS indicated it reviewed each quarterly and semiannual financial report submitted by the Area Agencies on Aging, DHS did not document how these reports were reviewed, when they were reviewed, or the extent of the review process. For example, DHS did not have documentation indicating who performed the review. Related to the monthly and quarterly meetings held with the Area Agencies on Aging during FY 2022-23, DHS did not document attendance, agendas, or minutes for these oversight meetings. Context: DHS expended $32.5 million under the Aging Cluster during FY 2022-23, including $31.3 million that was provided to the Area Agencies on Aging. We interviewed DHS staff to gain an understanding of its policies and procedures for monitoring subrecipients for the Aging Cluster, and we reviewed DHS manuals and guidance related to subrecipient monitoring. Questioned Costs: None. Effect: Because its subrecipient monitoring procedures were not documented, DHS cannot demonstrate that it performed adequate monitoring of each Area Agency on Aging. Therefore, DHS is at increased risk of noncompliance with federal regulations for the Aging Cluster. Further, due to the lack of complete quarterly reporting from one Area Agency on Aging, DHS submitted incomplete information in three mid-year financial reports to the federal government. Among these three reports, we estimate that DHS did not report approximately $1.6 million in program income. Cause: Because the program has only three significant subrecipients, the procedures implemented by DHS were more informal and relied on the knowledge of the staff persons performing the monitoring, as well as frequent interactions between DHS staff and each Area Agency on Aging. Formal procedures were not developed and implemented for the tracking, review, and documentation of the receipt and review of the quarterly and the semiannual financial reports. Formal procedures were not developed and implemented for maintaining documentation of oversight meetings that were held. In prior years, DHS had performed an on-site visit as a part of its monitoring plan. As a result of the public health emergency, these on-site visits were not performed during FY 2022-23. Recommendation: We recommend the Wisconsin Department of Health Services: -create a centralized tracking process to monitor the receipt of the quarterly financial reports and semiannual financial reports from each Area Agency on Aging, including follow-up procedures when reports are not provided; -implement procedures to document the review and approval of the quarterly financial reports and semiannual financial reports, including related follow-up and resolution; and -develop and maintain in a central location documentation related to the monitoring procedures performed, including email correspondence or documentation of oversight meetings such as agendas and significant discussion topics. Finding 2023-308: Aging Cluster—Subrecipient Monitoring COVID-19—Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2001WISSC3 2020 2001WISSC6 2020 2101WIVAC5 2021 2101WISTPH 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2101WIOASS 2021 2201WIOASS 2022 2301WIOASS 2023 Questioned Costs: None COVID-19—Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2001WIHDC2 2020 2002WIHDC3 2020 2101WICMC6 2021 2101WIHDC5 2021 2101WIHDC6 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2101WIOACM 2021 2101WIOAHD 2021 2201WIOACM 2022 2201WIOAHD 2022 2301WIOACM 2023 2301WIOAHD 2023 Questioned Costs: None Nutrition Services Incentive Program (Assistance Listing number 93.053) Award Numbers Award Years 2201WIOANS 2022 2301WIOANS 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Aging Cluster—Subrecipient Monitoring Background: The DHHS Administration for Community Living provides funding to DHS for the Aging Cluster. The Aging Cluster provides funds to assist states and area agencies in providing programs and services to support independence and wellness for older adults. To administer the Aging Cluster, DHS contracts with three Area Agencies on Aging and used CARS to process reimbursement requests for the subrecipients. Criteria: DHS administers federal programs that are subject to Uniform Guidance. Uniform Guidance includes the following requirements related to the monitoring of subrecipients: -2 CFR s. 200.332 (b) requires DHS to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring; and -2 CFR s. 200.332 (d) through (f) requires DHS to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. DHS established policies requiring grant administrators to conduct a risk assessment for every subaward of federal funds and to use the risk assessment to determine the frequency and extent of monitoring. DHS policies include a subrecipient risk assessment template to assist grant administrators in completing the risk assessment and determining the risk level of the subrecipient. DHS policies also require grant administrators to monitor subrecipients based on the risk assessment. DHS policies indicate that monitoring must include reviewing financial and performance reports required by DHS. Additionally, per DHS policies, monitoring may include providing subrecipient training and technical assistance, performing desk reviews of the subrecipient’s records, and performing on-site review of the subrecipient’s records and operations. Finally, DHS policies in the Division of Public Health Bureau of Operations Contract Management Manual suggest that when CARS is used to process reimbursement requests, grant administrators should use enhanced expenditure reporting from subrecipients to ensure expenditures are allowable. These policies note that additional verification can be performed by reviewing subrecipient financial records through a desk review or an on-site visit. Condition: DHS performed the required risk assessments for each Area Agency on Aging and, as a part of its plan for monitoring each entity, DHS: -required the submission of both a quarterly financial report and a separate semiannual financial report for use in monitoring activities and to provide information for DHS to prepare semiannual financial reports to submit to the federal government; and -established regular monthly and quarterly program and fiscal oversight meetings to provide a forum for the discussion of issues, to answer questions, and to provide technical guidance. During FY 2022-23, DHS received 10 of the 12 quarterly financial reports from the Area Agencies on Aging. Although DHS indicated it reviewed each quarterly and semiannual financial report submitted by the Area Agencies on Aging, DHS did not document how these reports were reviewed, when they were reviewed, or the extent of the review process. For example, DHS did not have documentation indicating who performed the review. Related to the monthly and quarterly meetings held with the Area Agencies on Aging during FY 2022-23, DHS did not document attendance, agendas, or minutes for these oversight meetings. Context: DHS expended $32.5 million under the Aging Cluster during FY 2022-23, including $31.3 million that was provided to the Area Agencies on Aging. We interviewed DHS staff to gain an understanding of its policies and procedures for monitoring subrecipients for the Aging Cluster, and we reviewed DHS manuals and guidance related to subrecipient monitoring. Questioned Costs: None. Effect: Because its subrecipient monitoring procedures were not documented, DHS cannot demonstrate that it performed adequate monitoring of each Area Agency on Aging. Therefore, DHS is at increased risk of noncompliance with federal regulations for the Aging Cluster. Further, due to the lack of complete quarterly reporting from one Area Agency on Aging, DHS submitted incomplete information in three mid-year financial reports to the federal government. Among these three reports, we estimate that DHS did not report approximately $1.6 million in program income. Cause: Because the program has only three significant subrecipients, the procedures implemented by DHS were more informal and relied on the knowledge of the staff persons performing the monitoring, as well as frequent interactions between DHS staff and each Area Agency on Aging. Formal procedures were not developed and implemented for the tracking, review, and documentation of the receipt and review of the quarterly and the semiannual financial reports. Formal procedures were not developed and implemented for maintaining documentation of oversight meetings that were held. In prior years, DHS had performed an on-site visit as a part of its monitoring plan. As a result of the public health emergency, these on-site visits were not performed during FY 2022-23. Recommendation: We recommend the Wisconsin Department of Health Services: -create a centralized tracking process to monitor the receipt of the quarterly financial reports and semiannual financial reports from each Area Agency on Aging, including follow-up procedures when reports are not provided; -implement procedures to document the review and approval of the quarterly financial reports and semiannual financial reports, including related follow-up and resolution; and -develop and maintain in a central location documentation related to the monitoring procedures performed, including email correspondence or documentation of oversight meetings such as agendas and significant discussion topics. Finding 2023-308: Aging Cluster—Subrecipient Monitoring COVID-19—Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2001WISSC3 2020 2001WISSC6 2020 2101WIVAC5 2021 2101WISTPH 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers (Assistance Listing number 93.044) Award Numbers Award Years 2101WIOASS 2021 2201WIOASS 2022 2301WIOASS 2023 Questioned Costs: None COVID-19—Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2001WIHDC2 2020 2002WIHDC3 2020 2101WICMC6 2021 2101WIHDC5 2021 2101WIHDC6 2021 Questioned Costs: None Special Programs for the Aging, Title III, Part C, Nutrition Services (Assistance Listing number 93.045) Award Numbers Award Years 2101WIOACM 2021 2101WIOAHD 2021 2201WIOACM 2022 2201WIOAHD 2022 2301WIOACM 2023 2301WIOAHD 2023 Questioned Costs: None Nutrition Services Incentive Program (Assistance Listing number 93.053) Award Numbers Award Years 2201WIOANS 2022 2301WIOANS 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response—Subrecipient Monitoring Background: CDC provides funding to DHS under the Cooperative Agreements program. The Cooperative Agreements program is intended to provide funding to rapidly respond to public health emergencies as identified by the CDC. DHS received three awards from the CDC to be funded by the Cooperative Agreements grant: COVID Crisis Response, COVID Public Health Workforce, and Monkey Pox Crisis Response. Under the COVID Public Health Workforce award, DHS contracted with subrecipients, including local and tribal public health agencies and cooperative educational service agencies (CESAs), to administer the award. DHS uses CARS to process the reimbursement requests for the local and tribal public health agencies. Reimbursement requests for CESAs are processed directly through STAR, the State’s accounting system, based upon review and approval of detailed invoices. Criteria: DHS administers federal programs that are subject to Uniform Guidance. Uniform Guidance includes the following requirements related to the monitoring of subrecipients: -2 CFR s. 200.332 (b) requires DHS to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring; and -2 CFR s. 200.332 (d) through (f) requires DHS to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. DHS established policies requiring grant administrators to conduct a risk assessment for every subaward of federal funds and to use the risk assessment to determine the frequency and extent of monitoring. DHS policies include a subrecipient risk assessment template to assist grant administrators in completing the risk assessment and determining the risk level of the subrecipient. DHS policies also require grant administrators to monitor subrecipients based on the risk assessments. DHS policies indicate that monitoring may include providing subrecipient training and technical assistance, performing desk reviews of the subrecipient’s records, and performing on-site reviews of the subrecipient’s records and operations. Finally, DHS policies in the Division of Public Health Bureau of Operations Contract Management Manual suggest that when CARS is used to process reimbursement requests, grant administrators should use enhanced expenditure reporting from subrecipients to ensure expenditures are allowable. DHS policies note that additional verification can be performed by reviewing subrecipients financial records through a desk review or an on-site visit. Condition: For 1 of 11 subrecipients we reviewed, DHS was unable to provide a completed subrecipient risk assessment. In addition, DHS did not define the level of monitoring to be performed based on the completed risk assessments. For example, there were no procedures to indicate the level of monitoring required for low-, moderate-, and high-risk subrecipients, such as when DHS would be required to review subrecipient invoices through a desk review or an on-site visit. DHS staff indicated that all subrecipients were monitored in the same manner regardless of the risk assessment level determined. DHS monitoring of subrecipient activity for the Cooperative Agreements program was not documented sufficiently to provide assurance that the subrecipients used the subaward for authorized purposes and in compliance with the subaward terms and conditions. DHS grant program staff collected and reviewed semiannual progress and fiscal reports for the 96 local and tribal public health agencies that received funding under the COVID Public Health Workforce award, but did not require such reporting for the CESAs. We reviewed the spreadsheet maintained by the grant program staff to track and document review of the semiannual progress and fiscal reports submitted in December 2022. We found the documentation was incomplete. We identified that for 12 of the 96 subrecipients being tracked, the spreadsheet indicated that the review was still in progress at the time of our fieldwork in February 2024. We also identified that for four subrecipients, DHS indicated in the spreadsheet that costs were denied or potentially denied. However, DHS did not note a conclusion in the spreadsheet. We requested any documentation DHS had available related to resolution of the denied or potentially denied costs. DHS provided only limited documentation, including email correspondence with certain of the subrecipients. DHS was unable to provide documentation to support that it had resolved three of the four subrecipients potentially unallowable costs. Finally, DHS did not review subrecipient invoices through a desk review or an on-site visit of the subrecipient to assess the allowability of the costs charged to the grant. Context: DHS expended $15.4 million under the Cooperative Agreements grant during FY 2022-23, including $6.8 million that was provided to subrecipients. Of the $6.8 million provided to subrecipients, $5.5 million was processed through CARS. We interviewed DHS staff to gain an understanding of DHS policies and procedures for processing reimbursement requests from subrecipients, including its use of CARS, and its policies and procedures for monitoring subrecipients to ensure costs are allowable to be charged to the grant program. For the COVID Public Health Workforce grant, DHS contracted with 96 local and tribal public health agencies and 12 CESAs to administer the program. Questioned Costs: None. Effect: Because its subrecipient monitoring procedures are insufficient, DHS is at increased risk of noncompliance with federal regulations for the Cooperative Agreements program. Further, there is an increased risk of improper payments for the Cooperative Agreements program. Cause: DHS program staff were unable to explain why a risk assessment was not performed for the one subrecipient that did not have a risk assessment. DHS management did not establish written procedures to guide program staff in assessing the extent of subrecipient monitoring necessary for each level of subrecipient risk. As a result, program staff did not adjust monitoring procedures for subrecipients based on the risk assessment. DHS program staff indicated that staff turnover contributed to some of the issues with the subrecipient monitoring spreadsheet and the lack of documentation of decisions that were made. Further, DHS program staff relied on the CARS payment process to determine that costs were allowable to be charged to the grant program. However, CARS payments are processed based on high-level summaries from subrecipients and would not provide sufficient detail to assess whether the costs were allowable or not. Recommendation: We recommend the Wisconsin Department of Health Services: -review the tracking spreadsheets completed in fiscal year 2022-23, and complete the assessment of the progress and fiscal reports and consideration of potential unallowable costs, document the conclusions, and return funding to the federal government if costs were determined to be unallowable; -develop a written monitoring plan for the Cooperative Agreements program that includes a description of the subrecipient monitoring expected for low-, moderate-, and high-risk subrecipients; procedures for completing and documenting review of the progress and fiscal reports; procedures for completing and documenting desk reviews or on-site visits; procedures for assessing and documenting the reliance that can be placed on review of a subrecipient’s single audit report; and procedures for documenting management oversight of the monitoring plan; -develop a central location to maintain documentation related to the subrecipient monitoring, including email correspondence; and -provide sufficient training to Department of Health Services staff administering the Cooperative Agreements program to ensure all subrecipient monitoring responsibilities are completed consistently and are based on the risk assessment level determined. Finding 2023-306: Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response—Subrecipient Monitoring COVID-19—Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response (Assistance Listing number 93.354) Award Numbers Award Years 6 NU90TP922078-01 2020 1 NU90TP922132-01 2021 Questioned Costs: None Type of Finding: Material Weakness, Material Noncompliance As a result, we qualified our opinion on compliance for the subrecipient monitoring compliance requirement. Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises—Subrecipient Monitoring Background: The DHHS Centers for Disease Control (CDC) provides funding to DHS under the Health Disparities program. The program is intended to address health disparities for high-risk and underserved populations to address COVID-19 related health disparities and advance health equity. To administer the award under the Health Disparities program, DHS contracted with a variety of subrecipients, including local and tribal public health agencies and nonprofit entities. DHS uses CARS to process the reimbursement requests for the subrecipients. Criteria: DHS administers federal programs that are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Uniform Guidance includes the following requirements related to the monitoring of subrecipients: -2 CFR s. 200.332 (b) requires DHS to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring; and -2 CFR s. 200.332 (d) through (f) requires DHS to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. DHS established policies requiring grant administrators to conduct a risk assessment for every subaward of federal funds and to use the risk assessment to determine the frequency and extent of monitoring. DHS policies include a subrecipient risk assessment template to assist grant administrators in completing the risk assessment and determining the risk level of the subrecipient. DHS policies also require grant administrators to monitor subrecipients based on the risk assessments. DHS policies indicate that monitoring may include providing subrecipient training and technical assistance; performing desk reviews of the subrecipient’s records; and performing on-site reviews of the subrecipient’s records and operations. Finally, DHS policies in the Division of Public Health Bureau of Operations Contract Management Manual suggest that when CARS is used to process reimbursement requests, grant administrators should use enhanced expenditure reporting from subrecipients to ensure expenditures are allowable. These policies note that additional verification can be performed by reviewing subrecipient financial records through a desk review or on-site visit. Condition: DHS did not establish sufficient procedures to ensure the requirements related to subrecipient risk assessments were met. Although we found that risk assessments were completed for subrecipients, DHS did not define the level of monitoring to be performed based on the completed risk assessments. For example, there were no procedures to indicate the level of monitoring required for low-, moderate-, and high-risk subrecipients, such as when it would be required to review subrecipient invoices through a desk review or an on-site visit. Staff indicated that the level of monitoring of subrecipients is determined by the program staff working with the subrecipient. To ensure only allowable costs were funded by the program, the Health Disparities program staff indicated that they relied on the establishment of a contract with the subrecipient, which indicated the costs that were allowable for the program. Further, staff indicated that there were ongoing interactions with the subrecipients to ensure the funding was expended appropriately. DHS provided various examples of how individual program staff interacted with subrecipients through email, periodic meetings, and the receipt of progress reports. However, as monitoring to be completed was determined by an individual program staff member, there was no procedure to ensure adequate monitoring was completed or that monitoring was consistent. Further, the documentation DHS provided did not demonstrate management oversight to ensure adequate monitoring was completed. DHS also did not review subrecipient invoices through a desk review or an on-site visit to assess the allowability of the costs charged to the grant. Context: DHS expended $9.6 million under the Health Disparities program during FY 2022-23, including $3.8 million that was provided to subrecipients and was processed through CARS. DHS contracted with 87 subrecipients to administer the program. We interviewed DHS staff to gain an understanding of DHS policies and procedures for processing reimbursement requests from subrecipients, including its use of CARS, and its policies and procedures for monitoring subrecipients to ensure costs are allowable to be charged to the grant program. Questioned Costs: None. Effect: Because its subrecipient monitoring procedures are insufficient, DHS is at increased risk of noncompliance with federal regulations for the Health Disparities program. Further, there is an increased risk of improper payments for the Health Disparities program. Cause: DHS did not establish written procedures to guide program staff in assessing the extent of subrecipient monitoring necessary for each level of subrecipient risk. As a result, program staff did not adjust monitoring procedures for subrecipients based on the risk assessment. DHS program staff relied on the CARS payment process and interactions with subrecipients to determine that costs were allowable to be charged to the Health Disparities program. Further, management oversight to ensure subrecipient monitoring was completed either did not occur or was not documented. Recommendation: We recommend the Wisconsin Department of Health Services: -develop a written monitoring plan for the Health Disparities program that includes a description of the subrecipient monitoring expected for low-, moderate-, and high-risk subrecipients; procedures for completing and documenting desk reviews of subrecipient invoices; procedures for assessing and documenting the reliance that can be placed on review of subrecipient single audit reports; and procedures for documenting management oversight of the monitoring plan; -develop a central location to maintain documentation related to the subrecipient monitoring, including email correspondence; and -provide sufficient training to the Department of Health Services staff administering the Health Disparities program to ensure all subrecipient monitoring responsibilities are completed consistently and are based on the risk assessment level determined. Finding 2023-305: Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises—Subrecipient Monitoring COVID-19—Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing number 93.391) Award Number Award Year 1 NH75OT000039-01 2021 Questioned Costs: None Type of Finding: Material Weakness, Material Noncompliance As a result, we qualified our opinion on compliance for the subrecipient monitoring compliance requirement. Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendations.
Refugee and Entrant Assistance State/Replacement Designee Administered Programs—Subrecipient Monitoring Background: DCF receives federal funding from DHHS for the Refugee Programs. The Refugee Programs provide assistance to refugees to attain economic self-sufficiency soon after initial placement in a U.S. community. To administer the Refugee Programs, DCF contracts with subrecipients, or partner agencies, located around the State. The partner agencies are responsible for completing eligibility determinations, determining and providing benefits, and referring refugees to other community resources that may assist them. Criteria: DCF administers federal programs that are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Uniform Guidance includes three requirements related to the monitoring of subrecipients. First, 2 CFR s. 200.332 (a) (1) requires DCF to communicate certain award information to subrecipients at the time of the subaward. Second, 2 CFR s. 200.332 (b) requires DCF to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate nature and level of subrecipient monitoring. Finally, 2 CFR s. 200.332 (d) through (f) requires DCF to monitor the activities of the subrecipient as necessary to ensure that the subrecipient uses the subaward for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Condition: We found that DCF did not have documentation to support that it completed sufficient monitoring activities for 8 of the 25 subrecipients for the Refugee Programs during FY 2022-23. We also found that a risk assessment was not documented by DCF for one of the three subrecipients we reviewed for the Refugee Programs. Context: Of the $8.7 million DCF expended during FY 2022-23 under the Refugee Programs, it disbursed nearly $6.9 million to 25 subrecipients, including school districts, community centers, and social services agencies. DCF is responsible for performing subrecipient monitoring procedures for the recipients of these funds. We reviewed the agreements between DCF and subrecipients to identify whether DCF had communicated the required award information to subrecipients. We also reviewed monitoring activities performed by DCF for the Refugee Programs during FY 2022-23, including by gaining an understanding of the process DCF used for reviewing subrecipient single audit reports, the results of risk assessments completed for subrecipients, and the procedures used by DCF to monitor subrecipients through the on-site monitoring and programmatic desk reviews. Questioned Costs: None. Effect: Because DCF did not comply with all subrecipient monitoring compliance requirements for the Refugee Programs, there is a higher risk that DCF, as well as the subrecipients, are not in compliance with all federal requirements. Cause: DCF did not have a formal plan to monitor subrecipients for the Refugee Programs based on the risk assessment process. DCF staff in the Bureau of Refugee Programs indicated that they relied on risk assessments completed by DCF’s central audit function. However, DCF staff did not identify that risk assessments for some Refugee Programs subrecipients were not completed centrally because DCF’s central audit function does not complete risk assessments for subrecipients with expenditures below a certain threshold. DCF staff in the Bureau of Refugee Programs indicated they had performed a semiannual programmatic desk review for six of the eight subrecipients but were unable to provide documentation to evidence that such reviews were performed. DCF staff in the Bureau of Refugee Programs stated that the large increase in federal funds in the Refugee Programs and the introduction of several subprograms resulted in an increased workload for DCF staff who had to respond to other priorities of the program. According to DCF staff in the Bureau of Refugee Programs, this resulted in a reduction in the extent to which on-site monitoring could be performed. Recommendation: We recommend the Wisconsin Department of Children and Families: -develop a subrecipient monitoring plan based on the risk assessment process to identify the specific monitoring steps necessary; -establish and implement procedures to ensure risk assessments are completed for each subrecipient of the Refugee and Entrant Assistance State/Replacement Designee Administered Programs; and -maintain documentation of all subreceipient monitoring activities performed. Finding 2023-201: Refugee and Entrant Assistance State/Replacement Designee Administered Programs—Subrecipient Monitoring Refugee and Entrant Assistance State/Replacement Designee Administered Programs (Assistance Listing number 93.566) Award Numbers Award Years 2201WIRCMA 2022 2301WIRCMA 2023 2101WIRSSS 2021 2201WIRSSS 2022 2301WIRSSS 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Children and Families: The Wisconsin Department of Children and Families agrees with the audit finding and recommendations.
Social Services Block Grant—Subrecipient Contracts Background: The U.S. Department of Health and Human Services (DHHS) provides funding to DHS for SSBG. This program provides flexible financial assistance to states that allows states to tailor social services programs to the needs of the population. During FY 2022-23, DHS provided $9.6 million in SSBG funds to DCF for the children and family aids program, which provides for prevention, investigation, and treatment services related to child abuse and neglect. In addition to general purpose revenue and other federal funds, DCF uses the SSBG funds and contracts with each county for the administration of this program. Because DCF provides funding to counties to carry out the purpose of a federal program, DCF is considered a pass-through entity, and the counties are considered subrecipients. In establishing contracts, DCF uses specific contract codes within the contract to designate the children and family aids program, the purpose of the program, the costs that will be reimbursed, and the federal programs being used in funding the amount of the contract. The information provided to the subrecipients for each contract code included in the contract, either in the contract or in other referenced information, includes the federal assistance listing number, as appropriate, and other required information. The contract codes for the children and family aids program are then used by the counties when determining which costs may be funded and in requesting reimbursement for costs incurred. Criteria: Under 2 CFR s. 200.332, the pass-through entity is required to clearly identify to the subrecipient certain information that allows the subrecipient to understand the federal requirements related to the funding provided. This information includes providing the federal assistance listing number and the amount being provided under the assistance listing number. Condition: DCF did not identify in the contracts with the counties that the contract code used for the children and family aids program was partially funding by SSBG. Information such as the assistance listing number and the award amount that was specific to SSBG was not included in the contract or in other information referenced in the contract. Context: We reviewed 7 of the 72 county contracts that were entered into during FY 2022-23 and discussed with DCF staff the inclusion of the assistance listing number for the contract codes used for the children and family aids program. During FY 2022-23, DCF subawarded $7.4 million in SSBG funds. Questioned Costs: None. Effect: Because the contracts with the counties do not include information related to the SSBG program, the counties may be unaware that they have received SSBG funds. This could result in the counties not complying with federal requirements related to SSBG funding. Cause: The funds DCF received from DHS were recorded in an appropriation that was designated as program revenue funding. DCF did not have procedures in place to identify the SSBG funds received from DHS for the children and family aids program as federal funding. Recommendation: We recommend the Wisconsin Department of Children and Families: -inform the counties of any Social Services Block Grant funding provided in subrecipient contracts for the children and family aids program; and -implement procedures to identify federal funding that is received as a transfer from another state agency when subgranting funds. Finding 2023-200: Social Services Block Grant—Subrecipient Contracts Social Services Block Grant (Assistance Listing number 93.667) Award Numbers Award Years 2301WISOSR 2023 2201WISOSR 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Children and Families: The Wisconsin Department of Children and Families agrees with the audit finding and recommendations.
Social Services Block Grant—Subrecipient Contracts Background: DHHS provides funding to DHS for the SSBG program. This program provides flexible financial assistance to states that allows states to tailor social services programs to the needs of the population. In addition, the State can transfer funds received under the Temporary Assistance for Needy Families (TANF) program (Assistance Listing number 93.558) to the SSBG program for use under this program. During FY 2022-23, $14.7 million was transferred to the SSBG program from the TANF program. DHS uses the SSBG funding, including the amounts transferred from the TANF program and general purpose revenue, to provide funding for the community aids program, and more specifically, amounts designated within this program as the “basic county allocation” that can be used by counties to support any eligible service. DHS contracts with each county for the administration of the community aids program. Because DHS provides funding to counties to carry out the purpose of a federal program, DHS is considered a pass-through entity, and the counties are considered subrecipients. DHS uses its Community Aids Reporting System (CARS) and establishes CARS profiles to designate the program, the purpose of the program, the types of costs that will be reimbursed, and the federal programs that are used in funding the amount of the contract. The information provided to the counties for a CARS profile will include the federal assistance listing number, as appropriate, and other required information. The CARS profile established for the basic county allocation is used by the counties when determining costs that can be funded and in requesting reimbursement for costs incurred. Criteria: Under 2 CFR s. 200.332, the pass-through entity is required to clearly identify to the subrecipient certain information that allows the subrecipient to understand the federal requirements related to the funding provided. This information includes providing the federal assistance listing number and the amount being provided under the assistance listing number. 42 USC section 604 allows for the transfer of funds from the TANF program to the SSBG program. Once transferred, the funding is no longer considered TANF funding and is subject to the requirements that apply to the SSBG program. Further, expenditures incurred with the transferred TANF funds would be considered an expenditure of SSBG. Condition: In the contracts with the counties, DHS identified that both the SSBG and TANF programs were being used to provide funding for the CARS profile for the basic county allocation. The TANF funds transferred to SSBG are subject to the requirements of the SSBG program, but the information DHS provided to the counties, which included the assistance listing number, inaccurately identified the TANF program as a funding source. Context: We reviewed 7 of the 72 county contracts that were executed during FY 2022-23 and discussed with DHS staff the inclusion of the assistance listing number for the CARS profile used for the basic county allocation. During FY 2022-23, DHS expended $33.4 million in SSBG funds, which included transferred TANF funds, and subawarded $32.4 million. Questioned Costs: None. Effect: Because the contracts with the counties did not accurately identify the transferred TANF funds as those from the SSBG program, the counties were not aware of the full amount of SSBG funds received and as a result may not be aware of the federal requirements related to this funding. This could result in the counties not complying with federal requirements related to the SSBG funding. Cause: In contract development, DHS separately identified the SSBG and transferred TANF funds used in funding the basic county allocation. This separation resulted in the error in identifying TANF as a funding source in the contracts with the counties. Recommendation: We recommend the Wisconsin Department of Health Services update its procedures for contract development to ensure information provided in its subrecipient contracts identified the Social Services Block Grant as the federal funding source for the basic county allocation of the community aids program related to the transferred Temporary Assistance for Needy Families funds. Finding 2023-301: Social Services Block Grant—Subrecipient Contracts Social Services Block Grant (Assistance Listing number 93.667) Award Numbers Award Years 2301WISOSR 2023 2201WISOSR 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendation.
2023-003 Program: COVID-19 Aging Cluster Assistance Listing No.: 93.041, 93.042, 93.043, 93.044, 93.045, 93.052, 93.053 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Aging Award No. and Year: Various Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control over Compliance and Instance of Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR section 200.332(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: We noted 6 instances out of 6 where the County did not include in the subrecipient agreement the subrecipient’s unique entity identifier and the subrecipient’s Federal Award identification Number (FAN) in accordance with 2 CFR 200.332(a) of the Uniform Guidance. In addition, we noted 6 instances out of 6 where the County did not perform a risk assessment on the program’s subrecipients for purposes of determining the appropriate subrecipient monitoring in accordance with 2 CFR 200.332(b) of the Uniform Guidance. Cause: The County did not ensure that the required award information was communicated to subrecipients. Additionally, the County did not document the evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Effect: The County did not identify the required elements of the subaward to the subrecipients at the time of subaward nor did the County document the evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 6 subrecipients out of 18 subrecipients were selected for testing. The condition noted above was identified during our procedures over the County’s subrecipient monitoring procedures. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County follow the implemented policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.332(a) and that the required evaluation of the subrecipient’s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.