Finding 2023-001: Subrecipient Monitoring – Significant Deficiency U.S. Department of Treasury COVID-19 Emergency Rental Assistance Program, Assistance Listing No. 21.023 Federal Award Year: 2023 Criteria: A pass-through entity must monitor the activities of subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: • Reviewing financial and programmatic (performance and special reports) required by the pass-through entity. • Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. • Issuing a management decision for findings pertaining to the federal award provided to the subrecipient from the pass-through entity as required by 2 CFR section 200.521. Condition: The County did not have adequate internal controls in place to obtain and review the detailed records that supported the subrecipient’s quarterly expenditure reports. In addition, the County did not obtain the subrecipient’s audit reports and or issue management’s decisions on any findings that were reported. Cause: Management of the County did not have adequate internal controls in place to meet the compliance requirements of this federal grant program. Effect or potential effect: Inadequate monitoring of subrecipients could result in actions take by the oversight agency which could impact future funding. Questioned costs: None Context: Federal grant award of $6 million was passed through to one subrecipient during the year ending June 30, 2023 under this program. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the County establish controls to ensure that program staff understand and follow necessary requirements for monitoring subrecipients. Views of responsible officials and auditee: Management agrees with the finding.
2023-012 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring Requirements Award Years: 2020 - 2023 Award Numbers: AA347712055A22, AA363222155A22, AA385322255A22 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding No. 2022-011) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately monitor subrecipients under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs. In addition, LWC did not adequately review subrecipient Single Audit reports and issue timely management decisions on findings affecting the WIOA Cluster programs. LWC’s WIOA expenditures during state fiscal year 2023 totaled over $56.5 million with approximately $47.1 million provided to subrecipients. Our review of LWC’s fiscal year 2023 monitoring reports for plan year 2020/fiscal year 2021 disclosed the following for LWC’s 15 subrecipients: • For five monitoring reports, close out letters were issued between 111 and 183 days after report issuance. For four monitoring reports, close out letters were not issued as of January 2024, while the monitoring reports for these reviews were issued more than 195 days prior. One report included a finding with possible questioned costs of $563,649 that is unresolved at the time of our review. Our review of LWC’s review of Single Audit reports disclosed the following for LWC’s 15 subrecipients: • For three Single Audit reports with findings affecting the WIOA cluster of programs, management decision letters were issued 66 to 264 days after the due date set by federal regulations. In addition, for two of the three reports, LWC incorrectly issued management decisions letters noting no WIOA affected findings. Each of the noted reports contained one finding affecting the WIOA Cluster programs. Criteria: 2 CFR 200.332(d) requires that pass-through entities 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 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient. 2 CFR 200.521(c) requires that pass-through entities issue management decisions for audit findings related to federal awards they make to subrecipients, and 2 CFR 200.521(d) requires that pass-through entities responsible for issuing management decisions issue their management decisions within six months of the acceptance of the audit report by the Federal Audit Clearinghouse. Cause: LWC policy does not specifically address timeliness requirements for close out letters. LWC failed to implement adequate internal controls to ensure that subrecipients’ Single Audit reports are reviewed and required management decision letters are issued by the deadlines established by federal regulations. Effect: Failure to timely resolve documentation and questioned costs impairs LWC’s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments to subrecipients, which LWC may have to repay to the federal grantor. These risks are also increased by LWC’s failure to implement adequate internal controls to ensure that subrecipients’ Single Audit reports are reviewed and required management decision letters are issued by the deadlines established by federal regulations. Recommendation: LWC management should develop and implement policy ensuring timely close out of monitoring reviews. LWC should also implement adequate internal controls to ensure that it identifies and follows up on subrecipients’ audit findings as specified and issues required management decision letters by the due date set by federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-46).
2023-012 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring Requirements Award Years: 2020 - 2023 Award Numbers: AA347712055A22, AA363222155A22, AA385322255A22 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding No. 2022-011) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately monitor subrecipients under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs. In addition, LWC did not adequately review subrecipient Single Audit reports and issue timely management decisions on findings affecting the WIOA Cluster programs. LWC’s WIOA expenditures during state fiscal year 2023 totaled over $56.5 million with approximately $47.1 million provided to subrecipients. Our review of LWC’s fiscal year 2023 monitoring reports for plan year 2020/fiscal year 2021 disclosed the following for LWC’s 15 subrecipients: • For five monitoring reports, close out letters were issued between 111 and 183 days after report issuance. For four monitoring reports, close out letters were not issued as of January 2024, while the monitoring reports for these reviews were issued more than 195 days prior. One report included a finding with possible questioned costs of $563,649 that is unresolved at the time of our review. Our review of LWC’s review of Single Audit reports disclosed the following for LWC’s 15 subrecipients: • For three Single Audit reports with findings affecting the WIOA cluster of programs, management decision letters were issued 66 to 264 days after the due date set by federal regulations. In addition, for two of the three reports, LWC incorrectly issued management decisions letters noting no WIOA affected findings. Each of the noted reports contained one finding affecting the WIOA Cluster programs. Criteria: 2 CFR 200.332(d) requires that pass-through entities 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 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient. 2 CFR 200.521(c) requires that pass-through entities issue management decisions for audit findings related to federal awards they make to subrecipients, and 2 CFR 200.521(d) requires that pass-through entities responsible for issuing management decisions issue their management decisions within six months of the acceptance of the audit report by the Federal Audit Clearinghouse. Cause: LWC policy does not specifically address timeliness requirements for close out letters. LWC failed to implement adequate internal controls to ensure that subrecipients’ Single Audit reports are reviewed and required management decision letters are issued by the deadlines established by federal regulations. Effect: Failure to timely resolve documentation and questioned costs impairs LWC’s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments to subrecipients, which LWC may have to repay to the federal grantor. These risks are also increased by LWC’s failure to implement adequate internal controls to ensure that subrecipients’ Single Audit reports are reviewed and required management decision letters are issued by the deadlines established by federal regulations. Recommendation: LWC management should develop and implement policy ensuring timely close out of monitoring reviews. LWC should also implement adequate internal controls to ensure that it identifies and follows up on subrecipients’ audit findings as specified and issues required management decision letters by the due date set by federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-46).
2023-012 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring Requirements Award Years: 2020 - 2023 Award Numbers: AA347712055A22, AA363222155A22, AA385322255A22 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding No. 2022-011) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately monitor subrecipients under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs. In addition, LWC did not adequately review subrecipient Single Audit reports and issue timely management decisions on findings affecting the WIOA Cluster programs. LWC’s WIOA expenditures during state fiscal year 2023 totaled over $56.5 million with approximately $47.1 million provided to subrecipients. Our review of LWC’s fiscal year 2023 monitoring reports for plan year 2020/fiscal year 2021 disclosed the following for LWC’s 15 subrecipients: • For five monitoring reports, close out letters were issued between 111 and 183 days after report issuance. For four monitoring reports, close out letters were not issued as of January 2024, while the monitoring reports for these reviews were issued more than 195 days prior. One report included a finding with possible questioned costs of $563,649 that is unresolved at the time of our review. Our review of LWC’s review of Single Audit reports disclosed the following for LWC’s 15 subrecipients: • For three Single Audit reports with findings affecting the WIOA cluster of programs, management decision letters were issued 66 to 264 days after the due date set by federal regulations. In addition, for two of the three reports, LWC incorrectly issued management decisions letters noting no WIOA affected findings. Each of the noted reports contained one finding affecting the WIOA Cluster programs. Criteria: 2 CFR 200.332(d) requires that pass-through entities 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 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient. 2 CFR 200.521(c) requires that pass-through entities issue management decisions for audit findings related to federal awards they make to subrecipients, and 2 CFR 200.521(d) requires that pass-through entities responsible for issuing management decisions issue their management decisions within six months of the acceptance of the audit report by the Federal Audit Clearinghouse. Cause: LWC policy does not specifically address timeliness requirements for close out letters. LWC failed to implement adequate internal controls to ensure that subrecipients’ Single Audit reports are reviewed and required management decision letters are issued by the deadlines established by federal regulations. Effect: Failure to timely resolve documentation and questioned costs impairs LWC’s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments to subrecipients, which LWC may have to repay to the federal grantor. These risks are also increased by LWC’s failure to implement adequate internal controls to ensure that subrecipients’ Single Audit reports are reviewed and required management decision letters are issued by the deadlines established by federal regulations. Recommendation: LWC management should develop and implement policy ensuring timely close out of monitoring reviews. LWC should also implement adequate internal controls to ensure that it identifies and follows up on subrecipients’ audit findings as specified and issues required management decision letters by the due date set by federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-46).
2023-008 - Noncompliance with Subrecipient Monitoring Requirements Award Years: 2019, 2020, 2022 Award Numbers: 1903601, 80NSSC21M0333, OIA-1920858, OIA-2019511, OIA-2119688, U19AI142636-05 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding No. 2022-007) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of seven subawards out of a population of 43 subawards, it was noted that for five (71%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the financial and performance reports required by the subaward agreement were obtained and reviewed by UL Lafayette. For two (29%) of the subrecipients evaluated, the subaward documents did not contain the assistance listing number and/or the federal award date, as required by federal regulations. Criteria: Per 2 CFR 200.332(a)(1)(iv) and (xii), all pass-through entities must ensure that every subaward includes the federal award date; assistance listing numbers 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. 2 CFR 200.332(d)(1) requires that pass-through monitoring include reviewing financial and performance reports required by the pass-through entity. Cause: UL Lafayette did not have controls in place to ensure adequate monitoring of subrecipients as required by federal regulations. Effect: Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency. Recommendation: UL Lafayette should strengthen controls to ensure that subaward documents contain all required information and that the required financial and performance reports are received and reviewed timely. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-61).
2023-008 - Noncompliance with Subrecipient Monitoring Requirements Award Years: 2019, 2020, 2022 Award Numbers: 1903601, 80NSSC21M0333, OIA-1920858, OIA-2019511, OIA-2119688, U19AI142636-05 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding No. 2022-007) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of seven subawards out of a population of 43 subawards, it was noted that for five (71%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the financial and performance reports required by the subaward agreement were obtained and reviewed by UL Lafayette. For two (29%) of the subrecipients evaluated, the subaward documents did not contain the assistance listing number and/or the federal award date, as required by federal regulations. Criteria: Per 2 CFR 200.332(a)(1)(iv) and (xii), all pass-through entities must ensure that every subaward includes the federal award date; assistance listing numbers 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. 2 CFR 200.332(d)(1) requires that pass-through monitoring include reviewing financial and performance reports required by the pass-through entity. Cause: UL Lafayette did not have controls in place to ensure adequate monitoring of subrecipients as required by federal regulations. Effect: Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency. Recommendation: UL Lafayette should strengthen controls to ensure that subaward documents contain all required information and that the required financial and performance reports are received and reviewed timely. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-61).
2023-008 - Noncompliance with Subrecipient Monitoring Requirements Award Years: 2019, 2020, 2022 Award Numbers: 1903601, 80NSSC21M0333, OIA-1920858, OIA-2019511, OIA-2119688, U19AI142636-05 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding No. 2022-007) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of seven subawards out of a population of 43 subawards, it was noted that for five (71%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the financial and performance reports required by the subaward agreement were obtained and reviewed by UL Lafayette. For two (29%) of the subrecipients evaluated, the subaward documents did not contain the assistance listing number and/or the federal award date, as required by federal regulations. Criteria: Per 2 CFR 200.332(a)(1)(iv) and (xii), all pass-through entities must ensure that every subaward includes the federal award date; assistance listing numbers 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. 2 CFR 200.332(d)(1) requires that pass-through monitoring include reviewing financial and performance reports required by the pass-through entity. Cause: UL Lafayette did not have controls in place to ensure adequate monitoring of subrecipients as required by federal regulations. Effect: Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency. Recommendation: UL Lafayette should strengthen controls to ensure that subaward documents contain all required information and that the required financial and performance reports are received and reviewed timely. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-61).
2023-008 - Noncompliance with Subrecipient Monitoring Requirements Award Years: 2019, 2020, 2022 Award Numbers: 1903601, 80NSSC21M0333, OIA-1920858, OIA-2019511, OIA-2119688, U19AI142636-05 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding No. 2022-007) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of seven subawards out of a population of 43 subawards, it was noted that for five (71%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the financial and performance reports required by the subaward agreement were obtained and reviewed by UL Lafayette. For two (29%) of the subrecipients evaluated, the subaward documents did not contain the assistance listing number and/or the federal award date, as required by federal regulations. Criteria: Per 2 CFR 200.332(a)(1)(iv) and (xii), all pass-through entities must ensure that every subaward includes the federal award date; assistance listing numbers 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. 2 CFR 200.332(d)(1) requires that pass-through monitoring include reviewing financial and performance reports required by the pass-through entity. Cause: UL Lafayette did not have controls in place to ensure adequate monitoring of subrecipients as required by federal regulations. Effect: Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency. Recommendation: UL Lafayette should strengthen controls to ensure that subaward documents contain all required information and that the required financial and performance reports are received and reviewed timely. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-61).
Condition During our audit, we examined the two ERA subawards for proper monitoring procedures. For the two subawards tested, the City did not follow their policies and procedures for performing on site reviews and did not review and evaluate the results of the subrecipients’ single audit reports. Criteria 2 CFR Section 200.332(d) requires a pass through entity to perform monitoring procedures which may include on site monitoring. The City’s policies and procedures require on site reviews to be conducted for its ERA programs. 2 CFR Section 200.332(d) also requires a pass through entity to review available single audit reports and follow up on any deficiencies pertaining to the federal award provided. Effect Without performing on site monitoring or evaluating subrecipients’ most recent single audit reports, the City may not be able to determine if subrecipients are using federal funds appropriately. Cause Due to staffing shortages and turnover, the City was not able to adhere to its on site monitoring procedures. The City also lacked procedures to review subrecipients’ single audit reports. Recommendation We recommend the City be more diligent in following its policies and procedures for on site monitoring of its subrecipients. We also recommend the City implement control procedures to review a subrecipient’s most recent single audit report to determine if any management decisions on findings or monitoring is necessary.
Condition During our audit, we selected a non statistical sample of three CSLFRF subawards for proper monitoring procedures. For two rental assistance subawards examined, we noted the City did not follow its policies and procedures for performing on site reviews and did not review and evaluate the results of the subrecipients’ single audit reports. Criteria 2 CFR Section 200.332(d) requires a pass through entity to perform monitoring procedures which may include on site monitoring. The City’s policies and procedures require on site reviews to be conducted for its CSLFRF programs. 2 CFR Section 200.332(d) also requires a pass through entity to review available single audit reports and follow up on any deficiencies pertaining to the federal award provided. Effect Without performing on site monitoring or evaluating subrecipients’ most recent single audit reports, the City may not be able to determine if subrecipients are using federal funds appropriately. Cause Due to staffing shortages and turnover, the City was not able to adhere to its on site monitoring procedures. The City also lacked procedures to review subrecipients’ single audit reports. Recommendation We recommend the City be more diligent in following its policies and procedures for on site monitoring of its subrecipients. We also recommend the City implement control procedures to review a subrecipient’s most recent single audit report to determine if any management decisions on findings or monitoring is necessary.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the Board did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f)). Specifically, reporting of performance results by the subrecipient were not submitted to the Board as required under the terms of the contract. Cause/Effect: The Board did not have adequate procedures in place for determining that the subrecipient had complied with federal regulations and had achieved performance goals. Auditor's Recommendation: The Board should review the monitoring plan related to subrecipients to ensure the Board has met the federal requirements for monitoring subrecipients. Management Response: The Board agrees with this recommendation and will review monitoring procedures relating to subrecipients.
New York City Department for the Aging (“DFTA”) Finding #: 2023-010 Funding Year(s): 07/01/2022 - 06/30/2023 New York City Department for the Aging: Aging Cluster (FAL #93.044, 93.045 & 93.053) Contract Number: N/A Pass-Through Agency: New York State Office for the Aging Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency) Criteria: As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition/Context: Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA. Cause/Effect: While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements. Questioned Costs: None identified. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”) Finding #: 2023-010 Funding Year(s): 07/01/2022 - 06/30/2023 New York City Department for the Aging: Aging Cluster (FAL #93.044, 93.045 & 93.053) Contract Number: N/A Pass-Through Agency: New York State Office for the Aging Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency) Criteria: As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition/Context: Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA. Cause/Effect: While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements. Questioned Costs: None identified. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”) Finding #: 2023-010 Funding Year(s): 07/01/2022 - 06/30/2023 New York City Department for the Aging: Aging Cluster (FAL #93.044, 93.045 & 93.053) Contract Number: N/A Pass-Through Agency: New York State Office for the Aging Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency) Criteria: As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition/Context: Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA. Cause/Effect: While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements. Questioned Costs: None identified. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”) Finding #: 2023-010 Funding Year(s): 07/01/2022 - 06/30/2023 New York City Department for the Aging: Aging Cluster (FAL #93.044, 93.045 & 93.053) Contract Number: N/A Pass-Through Agency: New York State Office for the Aging Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency) Criteria: As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition/Context: Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA. Cause/Effect: While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements. Questioned Costs: None identified. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”) Finding #: 2023-010 Funding Year(s): 07/01/2022 - 06/30/2023 New York City Department for the Aging: Aging Cluster (FAL #93.044, 93.045 & 93.053) Contract Number: N/A Pass-Through Agency: New York State Office for the Aging Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency) Criteria: As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition/Context: Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA. Cause/Effect: While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements. Questioned Costs: None identified. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) Ref. No. Compliance and Internal Control over Compliance Findings 2023-005 Subrecipient Monitoring - Significant Deficiency Federal agency: Department of Justice Programs Pass-Through Entity: State of Hawaii Department of the Attorney General Program: ALN No. 16.575 Crime Victim Assistance Criteria: Subrecipient monitoring and management requirements for pass-through entities at 2 CFR §200.332 – Requirements for pass-through entities requires that the County monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include reviewing financial and performance reports required by the pass-through entity. The County of Maui’s Prosecuting Attorney’s Office completes a “Project Monitoring Report Form” during the project period for each subrecipient which details programmatic and fiscal data. At the end of the contract period, each subrecipient is required to submit a “Subrecipient Monitoring Form”. The purpose of this report is to monitor subrecipients, and to also ensure that the County is in compliance with federal, state, and Victims of Crime Act requirements and regulations. Condition: During our testing of the subrecipient monitoring compliance requirement, we discovered the following: • Two (2) out of 2 instances where the County did not complete the Project Monitoring Report Form for the subrecipient during the contract period. • One (1) out of 2 instances where the County did not obtain a Subrecipient Monitoring Form from the subrecipient at the end of the contract period. • One (1) out of 2 instances where the County obtained a Subrecipient Monitoring Form from the subrecipient, however, it was not properly completed. Cause: The County did not follow its procedures to complete the Project Monitoring Report Form and obtain the Subrecipient Monitoring Form from its subrecipients. Effect: Completion of the Project Monitoring Report Form and obtaining the Subrecipient Monitoring Form from subrecipients help to ensure that the subaward is used for authorized purposes and the terms and conditions of the subaward and that subaward performance goals are achieved. Questioned Cost: $ -- Recommendation We recommend the County ensure the completion of its Project Monitoring Report Form during the contract period and obtain the Subrecipient Monitoring Form from its subrecipients at the end of every contract period as part of its monitoring procedures over subrecipients. Views of Responsible Officials and Planned Corrective Action The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan
Federal Program American Rescue Plan Act, AL 21.027 Criteria The requirements of 2CFR Part 200.332 state the various requirements of subrecipient agreements, which include the assistance listing number of the grant funding being passed through, and indication that the subrecipient would be subject to single audit requirements as set forth in 2CFR Part 200, Subpart F (Uniform Guidance). Condition During the audit, we noted the agreement with subrecipient did not include the items noted in the criteria above. Cause The City did not have controls in place to ensure the required information was included in the subrecipient agreement. Identification as a Repeat Finding This is not a repeat finding. Effect The City could jeopardize future grant funding due to program noncompliance and subrecipients could be unaware of the required compliance requirements. Questioned Costs None. Context/Sampling The only new subrecipient agreement entered for the fiscal year under audit was selected for review. There were no federal expenditures related to the agreement for the period under audit as the agreement was entered into in June 2023. Recommendation We recommend the City review 2CFR200 to ensure information required in subrecipient agreements is properly included. Management’s Response See Corrective Action Plan.
2023-006 – Subrecipient Monitoring – Internal Control and Compliance over Subrecipient Monitoring (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): C.F.R. § 200.332 prescribes that the pass-through entity must conduct monitoring activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. 4. The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. Condition: During our audit, we noted that the City did not have established monitoring policies and procedures for its subrecipients to address the compliance requirements. Consequently, no subrecipient monitoring activities were conducted during the year. Cause: The City does not have any written policy and sufficient procedures for subrecipient monitoring activities tailored to address the subrecipient monitoring compliance requirements of the grant. Effect or Potential Effect: The City was not able to do the necessary subrecipient monitoring activities resulted to internal control and compliance requirement finding. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City establish a formal policy over review procedures on subrecipient monitoring to ensure the City is in compliance the grant requirement. Views of Responsible Officials: Management concurs the finding.
2023-001 Finding – Federal Award Type: Subrecipient Monitoring – Material Non-Compliance and Weakness in Internal Control Over Compliance. Identification of Federal Program: 21.027 – Coronavirus State and Local Fiscal Recovery Funds 10.182 – Food Bank Network Criteria / Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2CFR§200.332, a pass-through entity must clearly identify to the subrecipient the award as a subaward by providing the required federal information related to the award, all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the provisions of contracts and grants agreements. The pass-through entity must evaluate risk of non-compliance of each subrecipient, monitoring the subrecipient and ensuring accountability of for-profit subrecipients. Condition / Context: Oregon Food Bank, Inc. passed through $4,027,781 in funding to subrecipients under Assistance Listing 21.027 and $1,825,785 in funding to subrecipients under Assistance Listing 10.182. During our audit, we noted that Oregon Food Bank, Inc. did not have formal written procedures or controls in place to ensure compliance with the U.S. Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) subrecipient monitoring requirements. Per review of subaward contracts, required federal contract information was not clearly identified. Further, there was not adequate documentation that subrecipients were evaluated for risk of non-compliance. Subrecipients were not sufficiently monitored as procedures were informal and were not applied consistently. Cause: Procedures are not in place to ensure that Oregon Food Bank, Inc. is providing adequate subaward contracts or maintaining proper subrecipient monitoring for each federal subrecipient. Effect: Failure to maintain sufficient subrecipient contracts and monitoring may result in the wrongful use of federal funds and non‐compliance with the provisions of applicable requirements of the federal award. Questioned Costs: None. Recommendation: Oregon Food Bank, Inc. should establish written policies and procedures regarding the contracting and monitoring of subrecipients that are in line with Uniform Guidance requirements, as well as establish organizational controls to ensure that such policies and procedures are being followed. Management’s response: Management concurs with the audit finding.
2023-001 Finding – Federal Award Type: Subrecipient Monitoring – Material Non-Compliance and Weakness in Internal Control Over Compliance. Identification of Federal Program: 21.027 – Coronavirus State and Local Fiscal Recovery Funds 10.182 – Food Bank Network Criteria / Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2CFR§200.332, a pass-through entity must clearly identify to the subrecipient the award as a subaward by providing the required federal information related to the award, all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the provisions of contracts and grants agreements. The pass-through entity must evaluate risk of non-compliance of each subrecipient, monitoring the subrecipient and ensuring accountability of for-profit subrecipients. Condition / Context: Oregon Food Bank, Inc. passed through $4,027,781 in funding to subrecipients under Assistance Listing 21.027 and $1,825,785 in funding to subrecipients under Assistance Listing 10.182. During our audit, we noted that Oregon Food Bank, Inc. did not have formal written procedures or controls in place to ensure compliance with the U.S. Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) subrecipient monitoring requirements. Per review of subaward contracts, required federal contract information was not clearly identified. Further, there was not adequate documentation that subrecipients were evaluated for risk of non-compliance. Subrecipients were not sufficiently monitored as procedures were informal and were not applied consistently. Cause: Procedures are not in place to ensure that Oregon Food Bank, Inc. is providing adequate subaward contracts or maintaining proper subrecipient monitoring for each federal subrecipient. Effect: Failure to maintain sufficient subrecipient contracts and monitoring may result in the wrongful use of federal funds and non‐compliance with the provisions of applicable requirements of the federal award. Questioned Costs: None. Recommendation: Oregon Food Bank, Inc. should establish written policies and procedures regarding the contracting and monitoring of subrecipients that are in line with Uniform Guidance requirements, as well as establish organizational controls to ensure that such policies and procedures are being followed. Management’s response: Management concurs with the audit finding.
Reference Number: 2023-011 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJOASS (10/1/2020 – 9/30/2022) 2101NJOANS (10/1/2020 – 9/30/2022) 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJOANS (10/1/2020 – 9/30/2022) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021-9/30/2023) 2201NJOAPH (10/1/2021-9/30/2023) 2201NJOAFC (10/1/2021-9/30/2023) 2301NJOACM (10/1/2022 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: 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; Section III – Federal Award Findings and Questioned Costs (Continued) 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 section 200.414. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subawards issued by the Department of Human Services (Department) did not include all required federal award information. Context: For 8 of 8 subawards selected for testing, the following required information was not provided to the subrecipient at the time of award issuance: (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; (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; (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 Questioned costs: None noted. Cause: The Department’s procedures were not sufficient to ensure the subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subawards. Views of responsible officials: The Division of Aging Services (DoAS) will comply with the pass-through entity and subrecipient monitoring requirements under the federal Uniform Guidance as per CFR § 200.332(a). The DoAS will provide all required information to the subrecipient at the time of award issuance. This subaward notice will be posted as a miscellaneous attachment to contracts in the Division's System for Administering Grants Electronically (SAGE), or via mail, fax or email to those subawards not administered in SAGE. DoAS plans to complete and update this information on SAGE within 60 days.
Reference Number: 2023-011 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJOASS (10/1/2020 – 9/30/2022) 2101NJOANS (10/1/2020 – 9/30/2022) 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJOANS (10/1/2020 – 9/30/2022) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021-9/30/2023) 2201NJOAPH (10/1/2021-9/30/2023) 2201NJOAFC (10/1/2021-9/30/2023) 2301NJOACM (10/1/2022 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: 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; Section III – Federal Award Findings and Questioned Costs (Continued) 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 section 200.414. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subawards issued by the Department of Human Services (Department) did not include all required federal award information. Context: For 8 of 8 subawards selected for testing, the following required information was not provided to the subrecipient at the time of award issuance: (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; (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; (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 Questioned costs: None noted. Cause: The Department’s procedures were not sufficient to ensure the subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subawards. Views of responsible officials: The Division of Aging Services (DoAS) will comply with the pass-through entity and subrecipient monitoring requirements under the federal Uniform Guidance as per CFR § 200.332(a). The DoAS will provide all required information to the subrecipient at the time of award issuance. This subaward notice will be posted as a miscellaneous attachment to contracts in the Division's System for Administering Grants Electronically (SAGE), or via mail, fax or email to those subawards not administered in SAGE. DoAS plans to complete and update this information on SAGE within 60 days.
Reference Number: 2023-011 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJOASS (10/1/2020 – 9/30/2022) 2101NJOANS (10/1/2020 – 9/30/2022) 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJOANS (10/1/2020 – 9/30/2022) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021-9/30/2023) 2201NJOAPH (10/1/2021-9/30/2023) 2201NJOAFC (10/1/2021-9/30/2023) 2301NJOACM (10/1/2022 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: 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; Section III – Federal Award Findings and Questioned Costs (Continued) 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 section 200.414. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subawards issued by the Department of Human Services (Department) did not include all required federal award information. Context: For 8 of 8 subawards selected for testing, the following required information was not provided to the subrecipient at the time of award issuance: (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; (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; (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 Questioned costs: None noted. Cause: The Department’s procedures were not sufficient to ensure the subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subawards. Views of responsible officials: The Division of Aging Services (DoAS) will comply with the pass-through entity and subrecipient monitoring requirements under the federal Uniform Guidance as per CFR § 200.332(a). The DoAS will provide all required information to the subrecipient at the time of award issuance. This subaward notice will be posted as a miscellaneous attachment to contracts in the Division's System for Administering Grants Electronically (SAGE), or via mail, fax or email to those subawards not administered in SAGE. DoAS plans to complete and update this information on SAGE within 60 days.
Reference Number: 2023-011 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJOASS (10/1/2020 – 9/30/2022) 2101NJOANS (10/1/2020 – 9/30/2022) 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJOANS (10/1/2020 – 9/30/2022) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021-9/30/2023) 2201NJOAPH (10/1/2021-9/30/2023) 2201NJOAFC (10/1/2021-9/30/2023) 2301NJOACM (10/1/2022 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: 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; Section III – Federal Award Findings and Questioned Costs (Continued) 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 section 200.414. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subawards issued by the Department of Human Services (Department) did not include all required federal award information. Context: For 8 of 8 subawards selected for testing, the following required information was not provided to the subrecipient at the time of award issuance: (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; (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; (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 Questioned costs: None noted. Cause: The Department’s procedures were not sufficient to ensure the subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subawards. Views of responsible officials: The Division of Aging Services (DoAS) will comply with the pass-through entity and subrecipient monitoring requirements under the federal Uniform Guidance as per CFR § 200.332(a). The DoAS will provide all required information to the subrecipient at the time of award issuance. This subaward notice will be posted as a miscellaneous attachment to contracts in the Division's System for Administering Grants Electronically (SAGE), or via mail, fax or email to those subawards not administered in SAGE. DoAS plans to complete and update this information on SAGE within 60 days.
Reference Number: 2023-011 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJOASS (10/1/2020 – 9/30/2022) 2101NJOANS (10/1/2020 – 9/30/2022) 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJOANS (10/1/2020 – 9/30/2022) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021-9/30/2023) 2201NJOAPH (10/1/2021-9/30/2023) 2201NJOAFC (10/1/2021-9/30/2023) 2301NJOACM (10/1/2022 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: 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; Section III – Federal Award Findings and Questioned Costs (Continued) 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 section 200.414. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subawards issued by the Department of Human Services (Department) did not include all required federal award information. Context: For 8 of 8 subawards selected for testing, the following required information was not provided to the subrecipient at the time of award issuance: (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; (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; (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 Questioned costs: None noted. Cause: The Department’s procedures were not sufficient to ensure the subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subawards. Views of responsible officials: The Division of Aging Services (DoAS) will comply with the pass-through entity and subrecipient monitoring requirements under the federal Uniform Guidance as per CFR § 200.332(a). The DoAS will provide all required information to the subrecipient at the time of award issuance. This subaward notice will be posted as a miscellaneous attachment to contracts in the Division's System for Administering Grants Electronically (SAGE), or via mail, fax or email to those subawards not administered in SAGE. DoAS plans to complete and update this information on SAGE within 60 days.
Reference Number: 2023-015 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Health Federal Program: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: 6NU50CK000525 (8/1/2019 – 7/31/2024), 6NU50CK000525 (8/1/2019 – 7/31/2024), 6NU50CK000525-02-03 (8/1/2020 - 7/31/2024), 5NU50CK000525-03-00 (8/1/2019 – 7/31/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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. 2 CFR section 200.332 also states that pass-through entities must: (d) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: 1) The subrecipient's prior experience with the same or similar subawards; 2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; 3) Whether the subrecipient has new personnel or new or substantially changed systems; 4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (e) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. Section III – Federal Award Findings and Questioned Costs (Continued) (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501 Audit requirements. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Documentation of subaward agreements and monitoring activities was not maintained and was not available for audit. Context: The Department of Health (DOH) is the primary recipient of program funding and, therefore, has overall responsibility for activities funded by the program. DOH entered into an agreement with the Department of Education (DOE) to issue subawards to public and non-public schools on their behalf. Six of twenty-six subrecipients selected for testing received subawards issued by DOE. DOE was unable to provide copies of subaward agreements or documentation that subrecipient monitoring activities had been performed. Therefore, auditors were unable to verify compliance with Federal requirements for these subawards. Questioned costs: Undetermined. Cause: The agreement between DOH and DOE did not clearly state DOE’s responsibilities for subaward issuance and monitoring. As a result, DOE did not maintain copies of subaward agreements, nor was it able to provide documentation that it had performed risk assessments or monitoring activities for these subrecipients. In its oversight role, DOH did not review documentation maintained by DOE to ensure compliance with Federal subrecipient monitoring requirements. Effect: Auditors were unable to verify that subawards were issued in accordance with Federal requirements, that the subrecipients were eligible to receive program funding, nor that the subrecipients had been adequately monitored. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: DOH should review and enhance internal controls and procedures regarding agreements with other State departments to issue subawards on its behalf. Agreements should clearly define the responsibilities of other departments to ensure compliance with all Federal requirements. DOH should also periodically review the documentation maintained by other departments that issue subawards on its behalf to ensure it is adequate and is available for audit. DOE should review and enhance internal controls and procedures to ensure that it maintains copies of all subaward agreements, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed for all subrecipients. Documentation of subrecipient monitoring activities should be readily available for audit. Views of responsible officials: The Department of Health (DOH) will enhance its internal controls and procedures, regarding federal subawards issued by other New Jersey State departments and agencies on behalf of DOH. The Department’s Memorandum of Agreement (MOA) and Memorandum of Understanding (MOU) documents will be updated and enhanced to list and define the specific responsibilities and requirements of other departments and pass-through entities more clearly when issuing subawards with federal funding derived from DOH. If necessary, the updated MOA/MOU documents may also include an Exhibit specific to Subrecipient Monitoring, containing the federal Uniform Guidance compliance requirements including mandatory reporting of subgrantee performance indicators and listing records retention requirements for all documentation of monitored subrecipient activities.
Reference Number: 2023-015 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Health Federal Program: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: 6NU50CK000525 (8/1/2019 – 7/31/2024), 6NU50CK000525 (8/1/2019 – 7/31/2024), 6NU50CK000525-02-03 (8/1/2020 - 7/31/2024), 5NU50CK000525-03-00 (8/1/2019 – 7/31/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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. 2 CFR section 200.332 also states that pass-through entities must: (d) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: 1) The subrecipient's prior experience with the same or similar subawards; 2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; 3) Whether the subrecipient has new personnel or new or substantially changed systems; 4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (e) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. Section III – Federal Award Findings and Questioned Costs (Continued) (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501 Audit requirements. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Documentation of subaward agreements and monitoring activities was not maintained and was not available for audit. Context: The Department of Health (DOH) is the primary recipient of program funding and, therefore, has overall responsibility for activities funded by the program. DOH entered into an agreement with the Department of Education (DOE) to issue subawards to public and non-public schools on their behalf. Six of twenty-six subrecipients selected for testing received subawards issued by DOE. DOE was unable to provide copies of subaward agreements or documentation that subrecipient monitoring activities had been performed. Therefore, auditors were unable to verify compliance with Federal requirements for these subawards. Questioned costs: Undetermined. Cause: The agreement between DOH and DOE did not clearly state DOE’s responsibilities for subaward issuance and monitoring. As a result, DOE did not maintain copies of subaward agreements, nor was it able to provide documentation that it had performed risk assessments or monitoring activities for these subrecipients. In its oversight role, DOH did not review documentation maintained by DOE to ensure compliance with Federal subrecipient monitoring requirements. Effect: Auditors were unable to verify that subawards were issued in accordance with Federal requirements, that the subrecipients were eligible to receive program funding, nor that the subrecipients had been adequately monitored. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: DOH should review and enhance internal controls and procedures regarding agreements with other State departments to issue subawards on its behalf. Agreements should clearly define the responsibilities of other departments to ensure compliance with all Federal requirements. DOH should also periodically review the documentation maintained by other departments that issue subawards on its behalf to ensure it is adequate and is available for audit. DOE should review and enhance internal controls and procedures to ensure that it maintains copies of all subaward agreements, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed for all subrecipients. Documentation of subrecipient monitoring activities should be readily available for audit. Views of responsible officials: The Department of Health (DOH) will enhance its internal controls and procedures, regarding federal subawards issued by other New Jersey State departments and agencies on behalf of DOH. The Department’s Memorandum of Agreement (MOA) and Memorandum of Understanding (MOU) documents will be updated and enhanced to list and define the specific responsibilities and requirements of other departments and pass-through entities more clearly when issuing subawards with federal funding derived from DOH. If necessary, the updated MOA/MOU documents may also include an Exhibit specific to Subrecipient Monitoring, containing the federal Uniform Guidance compliance requirements including mandatory reporting of subgrantee performance indicators and listing records retention requirements for all documentation of monitored subrecipient activities.
Reference Number: 2023-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Community Affairs Federal Program: Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2102NJE5C6 (3/11/21 – 9/30/22), 2202NJLIEA (10/1/21 – 9/30/22), 2001NJLIEA (10/1/19 – 9/30/22), 2302NJLIEA (10/1/2022 – 9/30/2024), 2302NJLIEI (10/1/2022 – 9/30/2024), 2202NJLIEA (10/1/2021 – 9/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: xv. Subrecipient name (which must match the name associated with its unique entity identifier); xvi. Subrecipient's unique entity identifier; xvii. Federal Award Identification Number (FAIN); xviii. 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; xix. Subaward Period of Performance Start and End Date; xx. Subaward Budget Period Start and End Date; xxi. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; xxii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; xxiii. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; xxiv. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xxv. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xxvi. 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; xxvii. Identification of whether the award is R&D; and xxviii. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. Section III – Federal Award Findings and Questioned Costs (Continued) Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subawards issued by the Department of Community Affairs (Department) did not include all required federal award information. Context: For 8 of 8 subawards selected for testing, the following required information was not provided to the subrecipient at the time of award issuance: (v) Federal Award Identification Number (FAIN); (vi) 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; (x) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (xi) Total Amount of the Federal Award committed to the subrecipient by 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 Questioned costs: None noted. Cause: The Department’s procedures were not sufficient to ensure the subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subawards. Section III – Federal Award Findings and Questioned Costs (Continued) Views of responsible officials: The Department of Community Affairs (DCA) has reviewed and enhanced internal controls and procedures to ensure that all required information, as per the federal Uniform Guidance pass-through entity requirements, is included in all new LIHEAP subaward contracts. These subaward agreement control enhancements have been implemented effective with the fiscal year 2024 contracts.
Reference Number: 2023-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Community Affairs Federal Program: Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2102NJE5C6 (3/11/21 – 9/30/22), 2202NJLIEA (10/1/21 – 9/30/22), 2001NJLIEA (10/1/19 – 9/30/22), 2302NJLIEA (10/1/2022 – 9/30/2024), 2302NJLIEI (10/1/2022 – 9/30/2024), 2202NJLIEA (10/1/2021 – 9/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: xv. Subrecipient name (which must match the name associated with its unique entity identifier); xvi. Subrecipient's unique entity identifier; xvii. Federal Award Identification Number (FAIN); xviii. 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; xix. Subaward Period of Performance Start and End Date; xx. Subaward Budget Period Start and End Date; xxi. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; xxii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; xxiii. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; xxiv. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xxv. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xxvi. 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; xxvii. Identification of whether the award is R&D; and xxviii. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per section 200.414. Section III – Federal Award Findings and Questioned Costs (Continued) Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Subawards issued by the Department of Community Affairs (Department) did not include all required federal award information. Context: For 8 of 8 subawards selected for testing, the following required information was not provided to the subrecipient at the time of award issuance: (v) Federal Award Identification Number (FAIN); (vi) 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; (x) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (xi) Total Amount of the Federal Award committed to the subrecipient by 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 Questioned costs: None noted. Cause: The Department’s procedures were not sufficient to ensure the subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subawards. Section III – Federal Award Findings and Questioned Costs (Continued) Views of responsible officials: The Department of Community Affairs (DCA) has reviewed and enhanced internal controls and procedures to ensure that all required information, as per the federal Uniform Guidance pass-through entity requirements, is included in all new LIHEAP subaward contracts. These subaward agreement control enhancements have been implemented effective with the fiscal year 2024 contracts.
Reference Number: 2023-021 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDF (10/1/2019 – 9/30/2022) 2001NJCCDF (10/1/2019 – 9/30/2022) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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. 2 CFR section 200.332(d) states that pass-through entities 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. Pass-through entity monitoring of the subrecipient must include: (4) Reviewing financial and performance reports required by the pass-through entity. (5) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (6) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. Section III – Federal Award Findings and Questioned Costs (Continued) Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not comply with subrecipient monitoring requirements for the program. Context: Eight subawards were selected for testing and the following exceptions were noted: • For 2 of 8 subawards selected for testing, the subaward did not include all required Federal Award information. The subawards were missing the Federal Award Date of award to the recipient by the Federal agency. • For 1 of 8 subawards selected for testing, the Department did not conduct an annual desk review for the award as required by the Department’s procedures. Questioned costs: None noted. Cause: The Department’s procedures were not effective to ensure that subawards were issued in compliance with Federal requirements, nor that subrecipient monitoring was performed timely in accordance with Departmental procedures. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subaward agreements and that proper subrecipient monitoring is performed. Section III – Federal Award Findings and Questioned Costs (Continued) Views of responsible officials: In accordance with the audit finding recommendation, the Department of Human Services’ Division of Family Development (DFD) will ensure that the applicable federal award date will be included with the contract award information as required by Uniform Guidance pass-through entity requirements. Subrecipient monitoring was performed in a timely manner in compliance with DHS Contract Policy with the exception of one subrecipient, NJSACC. NJSACC’s fiscal review documents are due back to DFD on April 15, 2024. Once received, DFD will schedule a fiscal review meeting with the agency and the entire process should be completed within one (1) month of receipt. In addition, DFD will review the current policy for clarity, reasonableness, and to ensure compliance.
Reference Number: 2023-021 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDF (10/1/2019 – 9/30/2022) 2001NJCCDF (10/1/2019 – 9/30/2022) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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. 2 CFR section 200.332(d) states that pass-through entities 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. Pass-through entity monitoring of the subrecipient must include: (4) Reviewing financial and performance reports required by the pass-through entity. (5) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (6) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. Section III – Federal Award Findings and Questioned Costs (Continued) Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not comply with subrecipient monitoring requirements for the program. Context: Eight subawards were selected for testing and the following exceptions were noted: • For 2 of 8 subawards selected for testing, the subaward did not include all required Federal Award information. The subawards were missing the Federal Award Date of award to the recipient by the Federal agency. • For 1 of 8 subawards selected for testing, the Department did not conduct an annual desk review for the award as required by the Department’s procedures. Questioned costs: None noted. Cause: The Department’s procedures were not effective to ensure that subawards were issued in compliance with Federal requirements, nor that subrecipient monitoring was performed timely in accordance with Departmental procedures. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subaward agreements and that proper subrecipient monitoring is performed. Section III – Federal Award Findings and Questioned Costs (Continued) Views of responsible officials: In accordance with the audit finding recommendation, the Department of Human Services’ Division of Family Development (DFD) will ensure that the applicable federal award date will be included with the contract award information as required by Uniform Guidance pass-through entity requirements. Subrecipient monitoring was performed in a timely manner in compliance with DHS Contract Policy with the exception of one subrecipient, NJSACC. NJSACC’s fiscal review documents are due back to DFD on April 15, 2024. Once received, DFD will schedule a fiscal review meeting with the agency and the entire process should be completed within one (1) month of receipt. In addition, DFD will review the current policy for clarity, reasonableness, and to ensure compliance.
Reference Number: 2023-021 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDF (10/1/2019 – 9/30/2022) 2001NJCCDF (10/1/2019 – 9/30/2022) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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. 2 CFR section 200.332(d) states that pass-through entities 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. Pass-through entity monitoring of the subrecipient must include: (4) Reviewing financial and performance reports required by the pass-through entity. (5) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (6) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. Section III – Federal Award Findings and Questioned Costs (Continued) Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not comply with subrecipient monitoring requirements for the program. Context: Eight subawards were selected for testing and the following exceptions were noted: • For 2 of 8 subawards selected for testing, the subaward did not include all required Federal Award information. The subawards were missing the Federal Award Date of award to the recipient by the Federal agency. • For 1 of 8 subawards selected for testing, the Department did not conduct an annual desk review for the award as required by the Department’s procedures. Questioned costs: None noted. Cause: The Department’s procedures were not effective to ensure that subawards were issued in compliance with Federal requirements, nor that subrecipient monitoring was performed timely in accordance with Departmental procedures. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subaward agreements and that proper subrecipient monitoring is performed. Section III – Federal Award Findings and Questioned Costs (Continued) Views of responsible officials: In accordance with the audit finding recommendation, the Department of Human Services’ Division of Family Development (DFD) will ensure that the applicable federal award date will be included with the contract award information as required by Uniform Guidance pass-through entity requirements. Subrecipient monitoring was performed in a timely manner in compliance with DHS Contract Policy with the exception of one subrecipient, NJSACC. NJSACC’s fiscal review documents are due back to DFD on April 15, 2024. Once received, DFD will schedule a fiscal review meeting with the agency and the entire process should be completed within one (1) month of receipt. In addition, DFD will review the current policy for clarity, reasonableness, and to ensure compliance.
Reference Number: 2023-025 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Opioid STR Assistance Listing Number: 93.788 Award Number and Year: H79T1083317 (9/3/2020 – 9/29/2023), H79T1085743 (9/30/2022 – 9/29/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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. Control – Per 2 CFR section 200.303(a), a 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not include all required information in subaward agreements. Context: Ten subawards were selected for testing and the following exceptions were noted: • For 10 of 10 subawards selected for testing, the Federal Award Date of award to the recipient by the Federal agency was omitted from the subaward agreement. • For 2 of 10 subawards selected for testing, the subrecipient’s unique entity identifier was not obtained and was omitted from the subaward agreement. Questioned costs: None noted. Cause: The Department’s procedures were not effective to ensure that subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Section III – Federal Award Findings and Questioned Costs (Continued) Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subaward agreements. Views of responsible officials: The Department of Human Services, Division of Mental Health and Addiction Services (DMHAS) agrees that for fiscal year 2023 it did not provide at the time of subaward one (1) of the fourteen (14) elements required by the federal Uniform Guidance (UG) pass-through entity requirements. More specifically, DMHAS did not communicate to subrecipients at the time of subaward the date on which DMHAS received its Notice of Award from the U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Center for Substance Abuse Treatment (SMAHSA). This single piece of information was omitted in each of the ten (10) samples tested. It is important to note, however, that DMHAS could certify that it did not communicate to any pool of applicants or subrecipients that funding was available until such time as DMHAS received its federal award. The failure to include the federal date of award was the result of clerical/ministerial error, and DMHAS’s inability to evidence the federal award date in its software system, known as the Contract Information Management System (CIMS). CIMS is accessible to subrecipients and DMHAS relies on it to document and track subawards. DMHAS satisfied every remaining subaward information element of the UG pass-through entity requirements with the exception of subsection (ii) – the subrecipient’s Unique Entity Identifier (UEI), for two (2) of the ten (10) samples tested. More specifically, DMHAS did not reference two (2) subrecipients UEI numbers at the time of each subrecipient’s subaward. It is important to note that DMHAS has the UEIs available to it, but it could not establish that it referenced two (2) of the UEIs at the time of award. The failure to include the UEI for each of the two (2) subrecipients was the result of clerical/ministerial error, and DMHAS’s inability to enter the data for the particular subrecipients into CIMS. Each of the two (2) samples related to a “specialty contract” that cannot be captured in CIMS. DMHAS has already undertaken efforts to update its software system and replace CIMS with SAGE AGATE. Although federal regulation does not require that every data element referenced in 2 CFR 200.332(a)(1) be available in a single document, as part of its ongoing systems improvement plans, the DMHAS is completing the procurement of a new contract information management system, SAGE AGATE, so that all federal award and contract information is available in a single report through a single software application. DMHAS has prepared a purchase order for SAGE AGATE, the State funds have been appropriated and the DMHAS is in the process of scheduling a kick off meeting, along with Section III – Federal Award Findings and Questioned Costs (Continued) 3-day training sessions. The DMHAS SAGE AGATE Scope of Work includes IntelliGrants software, as well as limited customization of the IntelliGrants software to satisfy any needs particular to DMHAS. DMHAS will ensure that the final software package provides DMHAS with the means to document and communicate to subrecipients at the time of subaward each of the requisite elements of 2 CFR 200.332(a)(1), including the Federal Date of Award and the UEI. In the interim, DMHAS has drafted an updated Notice of Subrecipient Award Template, which Template includes every component required by 2 CFR 200.332(a)(1). Upon DMHAS executive review and approval of the Template, Contract staff in the DMHAS Fiscal Unit will utilize the Template for each Notice of Subrecipient Award. DMHAS anticipates that the Template will be superseded by a Notice maintained within, and/or generated by, SAGE AGATE. Prior to the date of this CAP, DMHAS Program/Initiative Managers throughout the various DMHAS treatment service and support units were responsible for preparing and executing Notices of Subrecipient Award. As a result of the Significant Deficiency identified in this 2023 Audit, and in order to correct and mitigate against clerical/ministerial errors, DMHAS is transferring responsibility for the preparation and execution of Notices of Subrecipient Award from Program/Initiative Managers, to the DMHAS Fiscal Unit, Contract Manager (and the Contract Manager’s Contract Administration staff). Such staff will have total SAGE AGATE system access, and be best suited to ensure that Notices of Subrecipient Award comply with 2 CFR 200.332. Finally, as a preventive action, the DMHAS Compliance Unit will audit the issuance of post-contract negotiation Notices of Award in three (3) months, and again in six (6) months. The internal audit will sample no less than ten (10) newly awarded/renewed deficit-funded contracts for substance use disorder services, and will measure compliance with every element identified in 2 CFR 200.332.
Criteria: CFR 200.332(d) states: All pass-through entities 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 goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particulate subaward. (3) Issuing a management decision for applicable audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section 200.513(a)(3)(vii). Such reliance does not conform to the agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Condition: The County did not perform subrecipient monitoring of a school district that received the subaward. Cause: The County was not aware of the requirement to monitor the subrecipient. Effect: Unallowed activities could be undertaken or unallowed costs could be claimed under the program. Questioned Costs: None Perspective: Amounts passed through to subrecipients for the year totaled $2,042,606, of which $1,400,000 was passed through to the Sheridan School District which is subject to its own separate audit under the Uniform Guidance. Views of Officials: The County agrees with the findings and will develop a corrective action plan to implement to have all future grant recipients, regardless of whether they are administered by a third party partner or a non-competitive discretionary allocation, be required to register their organization on the County's online portal.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities clearly identify to each subrecipient significant Federal subaward information, including identifying award numbers, subaward period dates and budget dates, Federal Assistance Listings number and Title, and appropriate terms and conditions concerning closeout of the subaward. Typically this requirement is satisfied by utilizing a subrecipient contract, reflecting all necessary information, and requiring execution showing acknowledgement of the terms by both parties. 2 CFR section 200.332(b) requires that pass-through entities evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. The evaluation of this risk should include the subrecipient’s prior experience with the same or similar subawards, the results of previous subrecipient audits, whether the subrecipient has new personnel or substantially changed systems, and the extent and results of federal awarding agency monitoring if the subrecipient also receives federal awards directly. 2 CFR section 200.331(f) requires that pass-through entities verify that subrecipients expected to be audited are taking timely and appropriate action on deficiencies detected through audits. Condition: Internal controls should be in place to ensure the City is in compliance with all requirements of the federal award program. For the fiscal year ended June 30, 2023, the following conditions existed: • A risk assessment, required by 2 CFR section 200.332(b), was not performed on the City’s subrecipient of grant funds. • The City did not verify whether the subrecipient of the grant funds was required to be audited, as required by 2 CFR section 200.331(f). • The agreement between the City and its subrecipient did not include a description of the program’s compliance requirements, as required by 2 CFR section 200.331(a), including the specific requirements for the subrecipient’s periodic reporting to the City. Context/Cause: The City did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Testing was performed over each requirement for the City, who had a single subrecipient for the fiscal year ended June 30, 2023. Effect: Noncompliance at the subrecipient level may occur due to the subrecipient not being aware of all of the grant’s requirements. Without a risk assessment being performed on the City’s subrecipient for its grant funds, the City will not be aware of problems with staffing or information systems of the subrecipient. Additionally, the City will be unable to effectively monitor the subrecipient if the City is unaware of whether the subrecipient is required to be audited. Recommendation: We recommend the City enhances internal controls to ensure compliance with subrecipient monitoring requirements. Auditee’s Response: We concur with the finding. We will take the necessary steps to ensure that subrecipient agreements include a communication of the federal requirements and that the City performs a risk assessment on subrecipients of federal funding.
Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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: 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 section 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, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (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. Control: Per 2 CFR Section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.
Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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: 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 section 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, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (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. Control: Per 2 CFR Section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.
Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1 (5/23/2021 - 12/31/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes 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: 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 section 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, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters. (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services. (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. Control: Per 2 CFR Section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) was unable to provide support that subawards it issued contained all required federal information nor that it properly monitored its subrecipients. Context: Five subrecipients were selected for testing, and the following exceptions were noted: • For one of five subrecipients, the County did not have a subaward agreement in place with the subrecipient. As such, all required information was not furnished to the subrecipient. • Five of five subaward agreements were missing the following required information: o Federal Award Identification Number (FAIN) • For two of five subrecipients, the County was unable to provide support that it conducted during the award monitoring. • For one of five subrecipients, the County was unable to provide support that it had verified that the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The County should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Office of Community Relations (OCR) is reviewing and working to enhance internal controls and procedures to ensure all required information is included in the subaward, that proper subrecipient monitoring is conducted, and the evaluation of independent audits are performed. OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of funds to grantees selected through the RFPs managed by the subrecipient.
Finding 2023-030 (material noncompliance / material weakness – repeat finding – 2022-039 and 2022-060) EMERGENCY RENTAL ASSISTANCE PROGRAM – 21.023 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: ERAE0006 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – 21.027 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: SLFRP0136 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) – 97.036 Federal Awarding Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) Federal Award Fiscal Years: 2020 to 2023 Federal Award Number: FEMA-4505-DRRIP00000001 Administered by: Rhode Island Emergency Management Agency (RIEMA) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The State has not implemented adequate subrecipient monitoring activities to ensure material compliance with federal regulations for several federal programs. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. Criteria: 2 CFR §200.332(d) “Requirements for pass-through entities” requires that all pass-through entities 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.” That monitoring must include (1) reviewing financial and performance reports, (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means, (3) issuing a management decision for audit findings pertaining to the Federal award. 2 CFR §200.332(a)(1) requires pass-through entities to clearly identify certain Federal award identification information in the subaward (e.g., subrecipient unique entity identifier, Federal Award Identification Number, Assistance Listing number and title, et al.). Condition: For the federal programs cited above, State pass-through agencies did not perform subrecipient monitoring activities required by federal regulations. Our testing evaluated whether the grantee agency obtained and reviewed subrecipient financial and performance reports, i.e., Single Audit reports, when applicable, or performed other monitoring activities to comply with federal regulations. Based on test results, specific to agency review of Single Audit reports, the following programs were deemed to be in material noncompliance with subrecipient monitoring requirements: [See Schedule of Findings and Questioned Costs for tables.] In addition to the noncompliance related to review of subrecipient audit reports noted above, we identified the following deficiencies: • Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds – The Pandemic Recovery Office (PRO) along with the Department of Housing, through a memorandum of understanding with PRO to administer portions of these programs, executed various subawards with local non-profit organizations. Procedures were in place to review and approve monthly invoice packages for adherence to program requirements and contract budgets, and consistency with key performance indicator data submitted by the subrecipients. However, no on-site monitoring was performed in fiscal 2023 and periodic meetings with subrecipients were not documented. • Epidemiology and Laboratory Capacity for Infectious Diseases – Subawards executed by the Department of Health did not adequately identify required Federal award identification information. Cause: The State did not conduct subrecipient monitoring activities required to materially comply with federal regulations. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Yes RECOMMENDATION 2023-030 Improve policies and procedures statewide to ensure compliance with federal regulations for subrecipient monitoring. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-030 (material noncompliance / material weakness – repeat finding – 2022-039 and 2022-060) EMERGENCY RENTAL ASSISTANCE PROGRAM – 21.023 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: ERAE0006 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – 21.027 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: SLFRP0136 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) – 97.036 Federal Awarding Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) Federal Award Fiscal Years: 2020 to 2023 Federal Award Number: FEMA-4505-DRRIP00000001 Administered by: Rhode Island Emergency Management Agency (RIEMA) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The State has not implemented adequate subrecipient monitoring activities to ensure material compliance with federal regulations for several federal programs. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. Criteria: 2 CFR §200.332(d) “Requirements for pass-through entities” requires that all pass-through entities 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.” That monitoring must include (1) reviewing financial and performance reports, (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means, (3) issuing a management decision for audit findings pertaining to the Federal award. 2 CFR §200.332(a)(1) requires pass-through entities to clearly identify certain Federal award identification information in the subaward (e.g., subrecipient unique entity identifier, Federal Award Identification Number, Assistance Listing number and title, et al.). Condition: For the federal programs cited above, State pass-through agencies did not perform subrecipient monitoring activities required by federal regulations. Our testing evaluated whether the grantee agency obtained and reviewed subrecipient financial and performance reports, i.e., Single Audit reports, when applicable, or performed other monitoring activities to comply with federal regulations. Based on test results, specific to agency review of Single Audit reports, the following programs were deemed to be in material noncompliance with subrecipient monitoring requirements: [See Schedule of Findings and Questioned Costs for tables.] In addition to the noncompliance related to review of subrecipient audit reports noted above, we identified the following deficiencies: • Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds – The Pandemic Recovery Office (PRO) along with the Department of Housing, through a memorandum of understanding with PRO to administer portions of these programs, executed various subawards with local non-profit organizations. Procedures were in place to review and approve monthly invoice packages for adherence to program requirements and contract budgets, and consistency with key performance indicator data submitted by the subrecipients. However, no on-site monitoring was performed in fiscal 2023 and periodic meetings with subrecipients were not documented. • Epidemiology and Laboratory Capacity for Infectious Diseases – Subawards executed by the Department of Health did not adequately identify required Federal award identification information. Cause: The State did not conduct subrecipient monitoring activities required to materially comply with federal regulations. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Yes RECOMMENDATION 2023-030 Improve policies and procedures statewide to ensure compliance with federal regulations for subrecipient monitoring. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-043 (other noncompliance / significant deficiency – repeat finding – 2022-055) TITLE I GRANTS TO LOCAL EDUCATION AGENCIES – 84.010 Federal Awarding Agency: U.S. Department of Education (ED) Federal Award Fiscal Year: 2023 Federal Award Number: S010A220039 – 22A Administered by: Rhode Island Department of Education (RIDE) Compliance Requirement: Special Tests and Provisions – Oversight and Monitoring Responsibilities with Respect to Charter Schools with Relationships with Charter Management Organizations SPECIAL TESTS AND PROVISIONS – OVERSIGHT AND MONITORING RESPONSIBILITIES WITH RESPECT TO CHARTER SCHOOLS WITH RELATIONSHIPS WITH CHARTER MANAGEMENT ORGANIZATIONS RIDE does not have any specific procedures to assess the risk posed by conflicts of interest, related party transactions, or insufficient segregation of duties between the Charter School and Charter Management Organization (CMO). Criteria: As grantees, State Education Agencies (SEAs) / Local Education Agencies (LEAs) are responsible for overseeing and monitoring subrecipients, including charter schools with relationships with Charter Management Organizations (CMOs). The SEA/LEA must: (1) 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 §200.332(b)); and (2) monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved (2 CFR §200.332(d)). Additional requirements applicable to nonfederal entities receiving federal funds include: (1) the Code of Federal Regulations (CFR) requirements regarding conflicts of interest, (2) guidance regarding related-party transactions in generally accepted accounting principles, and (3) the GAO Green Book and COSO framework guidance regarding segregation of duties applicable to charter schools with relationships with CMOs. Condition: RIDE’s policies, procedures, and internal control for reviewing charter schools with relationships with Charter Management Organizations (CMOs) is the same for all LEAs. Those policies and procedures do not include any specific procedures to assess the risk posed by conflicts of interest, related party transactions, or insufficient segregation of duties between the Charter School and CMO. Cause: RIDE currently has two Charter Schools with a relationship with a CMO and they did not modify their policies, procedures, and internal controls to address the Federal requirements related to the relationship. Effect: RIDE is not in compliance with federal regulations. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2023-043 Enhance the policies, procedures, and internal controls over monitoring LEAs, Charter Schools, and Charter Schools with relationships to CMOs to include assessing the risk posed by conflicts of interest, related-party transactions, or insufficient segregation of duties between the Charter School and CMO. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-030 (material noncompliance / material weakness – repeat finding – 2022-039 and 2022-060) EMERGENCY RENTAL ASSISTANCE PROGRAM – 21.023 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: ERAE0006 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – 21.027 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: SLFRP0136 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) – 97.036 Federal Awarding Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) Federal Award Fiscal Years: 2020 to 2023 Federal Award Number: FEMA-4505-DRRIP00000001 Administered by: Rhode Island Emergency Management Agency (RIEMA) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The State has not implemented adequate subrecipient monitoring activities to ensure material compliance with federal regulations for several federal programs. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. Criteria: 2 CFR §200.332(d) “Requirements for pass-through entities” requires that all pass-through entities 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.” That monitoring must include (1) reviewing financial and performance reports, (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means, (3) issuing a management decision for audit findings pertaining to the Federal award. 2 CFR §200.332(a)(1) requires pass-through entities to clearly identify certain Federal award identification information in the subaward (e.g., subrecipient unique entity identifier, Federal Award Identification Number, Assistance Listing number and title, et al.). Condition: For the federal programs cited above, State pass-through agencies did not perform subrecipient monitoring activities required by federal regulations. Our testing evaluated whether the grantee agency obtained and reviewed subrecipient financial and performance reports, i.e., Single Audit reports, when applicable, or performed other monitoring activities to comply with federal regulations. Based on test results, specific to agency review of Single Audit reports, the following programs were deemed to be in material noncompliance with subrecipient monitoring requirements: [See Schedule of Findings and Questioned Costs for tables.] In addition to the noncompliance related to review of subrecipient audit reports noted above, we identified the following deficiencies: • Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds – The Pandemic Recovery Office (PRO) along with the Department of Housing, through a memorandum of understanding with PRO to administer portions of these programs, executed various subawards with local non-profit organizations. Procedures were in place to review and approve monthly invoice packages for adherence to program requirements and contract budgets, and consistency with key performance indicator data submitted by the subrecipients. However, no on-site monitoring was performed in fiscal 2023 and periodic meetings with subrecipients were not documented. • Epidemiology and Laboratory Capacity for Infectious Diseases – Subawards executed by the Department of Health did not adequately identify required Federal award identification information. Cause: The State did not conduct subrecipient monitoring activities required to materially comply with federal regulations. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Yes RECOMMENDATION 2023-030 Improve policies and procedures statewide to ensure compliance with federal regulations for subrecipient monitoring. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-030 (material noncompliance / material weakness – repeat finding – 2022-039 and 2022-060) EMERGENCY RENTAL ASSISTANCE PROGRAM – 21.023 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: ERAE0006 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – 21.027 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: SLFRP0136 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) – 97.036 Federal Awarding Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) Federal Award Fiscal Years: 2020 to 2023 Federal Award Number: FEMA-4505-DRRIP00000001 Administered by: Rhode Island Emergency Management Agency (RIEMA) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The State has not implemented adequate subrecipient monitoring activities to ensure material compliance with federal regulations for several federal programs. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. Criteria: 2 CFR §200.332(d) “Requirements for pass-through entities” requires that all pass-through entities 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.” That monitoring must include (1) reviewing financial and performance reports, (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means, (3) issuing a management decision for audit findings pertaining to the Federal award. 2 CFR §200.332(a)(1) requires pass-through entities to clearly identify certain Federal award identification information in the subaward (e.g., subrecipient unique entity identifier, Federal Award Identification Number, Assistance Listing number and title, et al.). Condition: For the federal programs cited above, State pass-through agencies did not perform subrecipient monitoring activities required by federal regulations. Our testing evaluated whether the grantee agency obtained and reviewed subrecipient financial and performance reports, i.e., Single Audit reports, when applicable, or performed other monitoring activities to comply with federal regulations. Based on test results, specific to agency review of Single Audit reports, the following programs were deemed to be in material noncompliance with subrecipient monitoring requirements: [See Schedule of Findings and Questioned Costs for tables.] In addition to the noncompliance related to review of subrecipient audit reports noted above, we identified the following deficiencies: • Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds – The Pandemic Recovery Office (PRO) along with the Department of Housing, through a memorandum of understanding with PRO to administer portions of these programs, executed various subawards with local non-profit organizations. Procedures were in place to review and approve monthly invoice packages for adherence to program requirements and contract budgets, and consistency with key performance indicator data submitted by the subrecipients. However, no on-site monitoring was performed in fiscal 2023 and periodic meetings with subrecipients were not documented. • Epidemiology and Laboratory Capacity for Infectious Diseases – Subawards executed by the Department of Health did not adequately identify required Federal award identification information. Cause: The State did not conduct subrecipient monitoring activities required to materially comply with federal regulations. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Yes RECOMMENDATION 2023-030 Improve policies and procedures statewide to ensure compliance with federal regulations for subrecipient monitoring. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-030 (material noncompliance / material weakness – repeat finding – 2022-039 and 2022-060) EMERGENCY RENTAL ASSISTANCE PROGRAM – 21.023 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: ERAE0006 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – 21.027 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: SLFRP0136 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) – 97.036 Federal Awarding Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) Federal Award Fiscal Years: 2020 to 2023 Federal Award Number: FEMA-4505-DRRIP00000001 Administered by: Rhode Island Emergency Management Agency (RIEMA) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The State has not implemented adequate subrecipient monitoring activities to ensure material compliance with federal regulations for several federal programs. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. Criteria: 2 CFR §200.332(d) “Requirements for pass-through entities” requires that all pass-through entities 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.” That monitoring must include (1) reviewing financial and performance reports, (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means, (3) issuing a management decision for audit findings pertaining to the Federal award. 2 CFR §200.332(a)(1) requires pass-through entities to clearly identify certain Federal award identification information in the subaward (e.g., subrecipient unique entity identifier, Federal Award Identification Number, Assistance Listing number and title, et al.). Condition: For the federal programs cited above, State pass-through agencies did not perform subrecipient monitoring activities required by federal regulations. Our testing evaluated whether the grantee agency obtained and reviewed subrecipient financial and performance reports, i.e., Single Audit reports, when applicable, or performed other monitoring activities to comply with federal regulations. Based on test results, specific to agency review of Single Audit reports, the following programs were deemed to be in material noncompliance with subrecipient monitoring requirements: [See Schedule of Findings and Questioned Costs for tables.] In addition to the noncompliance related to review of subrecipient audit reports noted above, we identified the following deficiencies: • Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds – The Pandemic Recovery Office (PRO) along with the Department of Housing, through a memorandum of understanding with PRO to administer portions of these programs, executed various subawards with local non-profit organizations. Procedures were in place to review and approve monthly invoice packages for adherence to program requirements and contract budgets, and consistency with key performance indicator data submitted by the subrecipients. However, no on-site monitoring was performed in fiscal 2023 and periodic meetings with subrecipients were not documented. • Epidemiology and Laboratory Capacity for Infectious Diseases – Subawards executed by the Department of Health did not adequately identify required Federal award identification information. Cause: The State did not conduct subrecipient monitoring activities required to materially comply with federal regulations. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Yes RECOMMENDATION 2023-030 Improve policies and procedures statewide to ensure compliance with federal regulations for subrecipient monitoring. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-030 (material noncompliance / material weakness – repeat finding – 2022-039 and 2022-060) EMERGENCY RENTAL ASSISTANCE PROGRAM – 21.023 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: ERAE0006 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – 21.027 Federal Awarding Agency: U.S. Department of the Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: SLFRP0136 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) – 97.036 Federal Awarding Agency: U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) Federal Award Fiscal Years: 2020 to 2023 Federal Award Number: FEMA-4505-DRRIP00000001 Administered by: Rhode Island Emergency Management Agency (RIEMA) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The State has not implemented adequate subrecipient monitoring activities to ensure material compliance with federal regulations for several federal programs. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. Criteria: 2 CFR §200.332(d) “Requirements for pass-through entities” requires that all pass-through entities 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.” That monitoring must include (1) reviewing financial and performance reports, (2) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means, (3) issuing a management decision for audit findings pertaining to the Federal award. 2 CFR §200.332(a)(1) requires pass-through entities to clearly identify certain Federal award identification information in the subaward (e.g., subrecipient unique entity identifier, Federal Award Identification Number, Assistance Listing number and title, et al.). Condition: For the federal programs cited above, State pass-through agencies did not perform subrecipient monitoring activities required by federal regulations. Our testing evaluated whether the grantee agency obtained and reviewed subrecipient financial and performance reports, i.e., Single Audit reports, when applicable, or performed other monitoring activities to comply with federal regulations. Based on test results, specific to agency review of Single Audit reports, the following programs were deemed to be in material noncompliance with subrecipient monitoring requirements: [See Schedule of Findings and Questioned Costs for tables.] In addition to the noncompliance related to review of subrecipient audit reports noted above, we identified the following deficiencies: • Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds – The Pandemic Recovery Office (PRO) along with the Department of Housing, through a memorandum of understanding with PRO to administer portions of these programs, executed various subawards with local non-profit organizations. Procedures were in place to review and approve monthly invoice packages for adherence to program requirements and contract budgets, and consistency with key performance indicator data submitted by the subrecipients. However, no on-site monitoring was performed in fiscal 2023 and periodic meetings with subrecipients were not documented. • Epidemiology and Laboratory Capacity for Infectious Diseases – Subawards executed by the Department of Health did not adequately identify required Federal award identification information. Cause: The State did not conduct subrecipient monitoring activities required to materially comply with federal regulations. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Yes RECOMMENDATION 2023-030 Improve policies and procedures statewide to ensure compliance with federal regulations for subrecipient monitoring. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
2023-045 Oregon Housing and Community Services Obtain documentation to support expenditures or pursue cost recovery Federal Awarding Agency: U.S. Department of Treasury Assistance Listing Number and Name: 21.023 Emergency Rental Assistance (COVID-19) Federal Award Numbers and Years: ERA 1, 2021 (COVID-19); ERA 2, 2021 (COVID-19) Compliance Requirements: Activities Allowed or Unallowed, Eligibility, Period of Performance Type of Finding: Noncompliance Prior Year Finding: N/A Questioned Costs: $96,624 (known) Criteria: 2 CFR 200.332(d); 2 CFR 200.501(g) Department management is responsible for monitoring the activities of subrecipients to ensure subawards are used for authorized purposes and are compliant with federal requirements. Additionally, department management is responsible for ensuring compliance when a contractor is responsible for program compliance. The department passed through funds to 17 community action agencies (subrecipients) and a third-party vendor (contractor) to provide program delivery. Program delivery included determining client eligibility and making payments for direct client assistance for rent, utilities, internet, and other housing related costs. During the fiscal year, the department performed program reviews for each of the subrecipients and the contractor to determine whether funds were paid to eligible clients for allowable activities. We selected eight subrecipient program reviews and the contractor review for testing. The department reviewed 175 client applications that were processed and approved for payment across the eight selected subrecipients. We reviewed the department’s program monitoring reports and identified 91 client applications with potential exceptions related to federal requirements. Our testing found 67 client applications with exceptions totaling $74,857 in questioned costs. The department reviewed a total of 60 individual client applications processed and approved for payment by the contractor. We reviewed the department’s program monitoring report and identified 16 client applications with potential exceptions related to federal requirements. Our testing found five client applications with exceptions totaling $21,767 in questioned costs. The majority of exceptions were due to a lack of sufficient documentation being maintained to ensure assistance was only provided to eligible clients for allowable costs within the applicable time period. We recommend department management coordinate with their subrecipients and contractor to obtain additional documentation to ensure compliance with federal requirements or to recover amounts paid that are not in compliance with federal requirements.
2023-034 Oregon Department of Emergency Management Fully implement subrecipient risk assessments Federal Awarding Agency: U.S. Department of Homeland Security Assistance Listing Number and Name: 97.036 Disaster Grants – Public Assistance (Presidentially Declared) 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (COVID-19) Federal Award Numbers and Years: FEMA-4258-DR-OR, 2016; FEMA-4296-DR-OR, 2017; FEMA-4328-DR-OR, 2017; FEMA-4432-DR-OR, 2019; FEMA-4452-DR-OR, 2019; FEMA-4519-DR-OR, 2020; FEMA-4562-DR-OR, 2020; FEMA-4599-DR-OR, 2021 FEMA-4499-DR-OR, 2020 (COVID-19) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: 2020-033 Questioned Costs: N/A Criteria: Criteria: 2 CFR 200.332(b) Federal regulations stipulate that pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining appropriate subrecipient monitoring. Monitoring activities should be completed based on the results of the subrecipient’s determined risk. In fiscal year 2020, we noted the department did not have systematic policies and procedures in place to adequately evaluate subrecipients’ risk for noncompliance with federal subrecipient monitoring requirements. In response, the department developed a subrecipient risk assessment policy and procedures, which included risk assessment questionnaires, a scoring matrix, and a tracking mechanism to track distribution and receipt of the questionnaires as well as the subrecipients’ overall risk level. We selected a random sample of 36 subrecipients who had received a payment during the fiscal year and reviewed the department’s February 2024 tracking spreadsheet. Four of the subrecipients had not returned the questionnaire or been evaluated for risk of noncompliance using other available information. One of the four was not listed as a subrecipient on the tracking spreadsheet. Management indicated that due to agency restructuring and the significant turnover of key management and staff during that period, full implementation of the subrecipient risk assessment procedures was still in process. Risk assessments help guide the agency in determining the appropriate level of monitoring for each subrecipient and the nature and extent of procedures to be applied. Without this guidance, the department may not provide an adequate level of monitoring. We recommend department management fully develop and implement its policies and procedures to ensure risk assessments are performed and documented for each subrecipient.
2023-034 Oregon Department of Emergency Management Fully implement subrecipient risk assessments Federal Awarding Agency: U.S. Department of Homeland Security Assistance Listing Number and Name: 97.036 Disaster Grants – Public Assistance (Presidentially Declared) 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (COVID-19) Federal Award Numbers and Years: FEMA-4258-DR-OR, 2016; FEMA-4296-DR-OR, 2017; FEMA-4328-DR-OR, 2017; FEMA-4432-DR-OR, 2019; FEMA-4452-DR-OR, 2019; FEMA-4519-DR-OR, 2020; FEMA-4562-DR-OR, 2020; FEMA-4599-DR-OR, 2021 FEMA-4499-DR-OR, 2020 (COVID-19) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: 2020-033 Questioned Costs: N/A Criteria: Criteria: 2 CFR 200.332(b) Federal regulations stipulate that pass-through entities evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining appropriate subrecipient monitoring. Monitoring activities should be completed based on the results of the subrecipient’s determined risk. In fiscal year 2020, we noted the department did not have systematic policies and procedures in place to adequately evaluate subrecipients’ risk for noncompliance with federal subrecipient monitoring requirements. In response, the department developed a subrecipient risk assessment policy and procedures, which included risk assessment questionnaires, a scoring matrix, and a tracking mechanism to track distribution and receipt of the questionnaires as well as the subrecipients’ overall risk level. We selected a random sample of 36 subrecipients who had received a payment during the fiscal year and reviewed the department’s February 2024 tracking spreadsheet. Four of the subrecipients had not returned the questionnaire or been evaluated for risk of noncompliance using other available information. One of the four was not listed as a subrecipient on the tracking spreadsheet. Management indicated that due to agency restructuring and the significant turnover of key management and staff during that period, full implementation of the subrecipient risk assessment procedures was still in process. Risk assessments help guide the agency in determining the appropriate level of monitoring for each subrecipient and the nature and extent of procedures to be applied. Without this guidance, the department may not provide an adequate level of monitoring. We recommend department management fully develop and implement its policies and procedures to ensure risk assessments are performed and documented for each subrecipient.
Finding 2023-002 Material Weakness: Subrecipient Monitoring - Compliance and Control Finding ALN 93.391: Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: City of Chicago, Illinois Criteria Or Specific Requirement: Per 2 CFR 200.332, the Project is responsible for evaluating each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward as well as informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance, Federal awarding agency, Assistance Listing Number and program name. The Project is required to monitor subrecipients’ compliance with Federal statutes, regulations and the terms and conditions of the subaward. The monitoring policy should include an initial evaluation of the risk of noncompliance to determine the appropriate level of monitoring required related to the subaward and ensure the continued monitoring of the subrecipients, inclusive of review of subrecipients’ single audit reports, when applicable. Condition: We noted that management did not evaluate the risk of noncompliance of its subrecipients and did not provide subrecipients with required information. Cause: Management does not have an internal control process in place to ensure proper subrecipient monitoring. Effect: The Project was not in compliance with the subrecipient monitoring regulations set forth in the Uniform Guidance. Further, the amount of funding passed through to subrecipients was material to the program. Questioned Costs: None Context: During the testing performed, we noted the Project did not perform a risk assessment of subrecipients and documentation informing subrecipients of all required rules and regulations related to federal funding was not maintained. Identification As A Repeat Finding: N/A Recommendation: We recommend that management implement a formal subrecipient monitoring policy that defines how the Project will monitor each subrecipient. This policy should include an evaluation of the risk of noncompliance for each subrecipient as well as how the subrecipients will be monitored. The Project should also request a copy of the subrecipients’ single audit, as applicable. Views Of Responsible Officials And Planned Corrective Action: An adequate subrecipients risk assessment policy will be put in place to evaluate and monitor subrecipients. Southwest Organizing Project will provide subrecipients with all required federal awards identifiers. Subrecipients will be required to provide a single audit when applicable and a signed statement if not applicable. Management will monitor receipt of single audits during the budgeting process and when closing out programs as well as record keeping for audit and reporting evidence.