Assistance Listing Number(s): 21.027 Name of Federal Program or Cluster: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of the Treasury Name of Pass-through Entity: City of Madison, City of Sun Prairie, Wisconsin Department of Workforce Development Award Period: January 1, 2022 through December 31, 2022; September 22, 2021 through December 31, 2024; June 20, 2022 through June 30, 2025 Criteria or Specific Requirement: 2 CFR section 200.332(a) requires pass-through entities to ensure every subaward is clearly identified to the subrecipient as a subaward and includes the required federal award identification information, all requirements imposed by the pass-through entity on the subrecipient, any additional requirements the pass-through entity imposes on the subrecipient, an indirect cost rate, a requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements, and appropriate terms and conditions concerning the closeout of the subaward. 2 CFR section 200.332(b) requires the pass-through entity to evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions for determining appropriate subrecipient monitoring. 2 CFR section 200.332(d) requires the pass-through entity to monitor the activities of the subrecipient 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 the subaward performance goals are achieved. 2 CFR section 200.332(f) requires the passthrough entity to verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded $750,000. Condition and Context: No supporting documentation was provided for the three subrecipients. No subaward agreements included all required information and none were executed and signed. No risk assessments were performed and documented. No monitoring procedures were performed other than reviewing invoices to be paid. Per the draft subawards, quarterly site visits were to occur, but none were performed and documented. There was no documentation of whether the 3 subrecipients were expected to/are being audited per the Uniform Guidance. Cause: Internal controls have not been designed, implemented, and documented in written procedures. Internal controls are not designed or implemented to ensure subrecipient agreements include the required information, to perform risk assessments, to establish monitoring procedures based on risks, to ensure monitoring takes placed as planned, and to verify whether subrecipients that expended $750,000 or more in federal awards is audited in accordance with the Uniform Guidance. Effect or Potential Effect: Questioned costs may be disallowed and requested to be repaid. Questioned Costs: $298,051; amount per GL paid to three subrecipients during the fiscal year. Repeat Finding: No. Recommendation: Procedures for subrecipient monitoring to meet federal statutes, regulations, and terms and conditions of the awards should be developed and documented. Internal controls should be designed, implemented, and documented within the subrecipient monitoring procedures to ensure compliance with 2 CFR section 200.332. Subrecipient monitoring activities should be performed and documented. Views of Responsible Officials: Boys and Girls Club of Dane County, Inc. agrees with the finding and is implementing written procedures.
Assistance Listing Number(s): 21.027 Name of Federal Program or Cluster: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of the Treasury Name of Pass-through Entity: City of Madison, City of Sun Prairie, Wisconsin Department of Workforce Development Award Period: January 1, 2022 through December 31, 2022; September 22, 2021 through December 31, 2024; June 20, 2022 through June 30, 2025 Criteria or Specific Requirement: 2 CFR section 200.332(a) requires pass-through entities to ensure every subaward is clearly identified to the subrecipient as a subaward and includes the required federal award identification information, all requirements imposed by the pass-through entity on the subrecipient, any additional requirements the pass-through entity imposes on the subrecipient, an indirect cost rate, a requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements, and appropriate terms and conditions concerning the closeout of the subaward. 2 CFR section 200.332(b) requires the pass-through entity to evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions for determining appropriate subrecipient monitoring. 2 CFR section 200.332(d) requires the pass-through entity to monitor the activities of the subrecipient 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 the subaward performance goals are achieved. 2 CFR section 200.332(f) requires the passthrough entity to verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded $750,000. Condition and Context: No supporting documentation was provided for the three subrecipients. No subaward agreements included all required information and none were executed and signed. No risk assessments were performed and documented. No monitoring procedures were performed other than reviewing invoices to be paid. Per the draft subawards, quarterly site visits were to occur, but none were performed and documented. There was no documentation of whether the 3 subrecipients were expected to/are being audited per the Uniform Guidance. Cause: Internal controls have not been designed, implemented, and documented in written procedures. Internal controls are not designed or implemented to ensure subrecipient agreements include the required information, to perform risk assessments, to establish monitoring procedures based on risks, to ensure monitoring takes placed as planned, and to verify whether subrecipients that expended $750,000 or more in federal awards is audited in accordance with the Uniform Guidance. Effect or Potential Effect: Questioned costs may be disallowed and requested to be repaid. Questioned Costs: $298,051; amount per GL paid to three subrecipients during the fiscal year. Repeat Finding: No. Recommendation: Procedures for subrecipient monitoring to meet federal statutes, regulations, and terms and conditions of the awards should be developed and documented. Internal controls should be designed, implemented, and documented within the subrecipient monitoring procedures to ensure compliance with 2 CFR section 200.332. Subrecipient monitoring activities should be performed and documented. Views of Responsible Officials: Boys and Girls Club of Dane County, Inc. agrees with the finding and is implementing written procedures.
Finding 2023-003: Noncompliance with Subrecipient Monitoring U.S. Department of Health and Human Services Federal Program: Advanced Nursing Education Workforce Grant Program Federal Assistance Listing Number: 93.247 Federal Award Year: 2023 Repeat Finding: No Criteria: In accordance with 2 CFR 200.332(a), pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed in 2 CFR 200.332(a)(1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. In accordance with 2CFR 200.332(d), 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. Condition: The Organization had memorandum of understanding agreements with each of its subrecipients. However, these agreements did not contain the information required by 2 CFR 200.332(a)(1). The Organization did not request or review the audits of its subrecipients in order to take timely and appropriate action on deficiencies detected through audits, if applicable. The Organization did not have sufficient documentation that internal controls were in place and operating effectively over risk assessment procedures required by the subrecipient monitoring compliance requirement. Cause: The Organization did not have adequate internal controls in place to ensure the agreements with its subrecipients included the required information. Additionally, the Organization did not have adequate controls in place to properly monitor the activities of its subrecipients, or perform the necessary risk assessment procedures. Effect: We tested two out of the four subrecipients the Organization passed funds to under this grant award. Of the two we tested, we noted that the Organization did not have properly executed subrecipient agreements with either subrecipient. We also noted that the Organization did not request the audits of either subrecipient, and did not adequately document its risk assessment. Recommendation: We recommend the Organization enhance its internal controls over the preparation of subrecipient agreements to ensure all required information is contained in the agreements. We also recommend that management enhance its internal controls over subrecipient monitoring to ensure that its subrecipients are utilizing the funds for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. View of responsible officials of the auditee: Management agrees with the finding and recommendation.
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Subrecipient Monitoring Federal Program: Department of Health and Human Services Federal Assistance Listing No. 93.044, 93.045, and 93.053 - Aging Cluster Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency Board did not comply with the Uniform Guidance requirement to evaluate each subrecipient's risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: The Agency's internal control did not effectively identify policies and procedures for monitoring subrecipients, and the Agency did not comply with federal requirements regarding subrecipient monitoring. The Agency experienced significant key employee turnover during the year. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
Subrecipient Monitoring Federal Program: Department of Health and Human Services Federal Assistance Listing No. 93.044, 93.045, and 93.053 - Aging Cluster Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency Board did not comply with the Uniform Guidance requirement to evaluate each subrecipient's risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: The Agency's internal control did not effectively identify policies and procedures for monitoring subrecipients, and the Agency did not comply with federal requirements regarding subrecipient monitoring. The Agency experienced significant key employee turnover during the year. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
Subrecipient Monitoring Federal Program: Department of Health and Human Services Federal Assistance Listing No. 93.044, 93.045, and 93.053 - Aging Cluster Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency Board did not comply with the Uniform Guidance requirement to evaluate each subrecipient's risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: The Agency's internal control did not effectively identify policies and procedures for monitoring subrecipients, and the Agency did not comply with federal requirements regarding subrecipient monitoring. The Agency experienced significant key employee turnover during the year. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
Subrecipient Monitoring Federal Program: Department of Health and Human Services Federal Assistance Listing No. 93.044, 93.045, and 93.053 - Aging Cluster Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency Board did not comply with the Uniform Guidance requirement to evaluate each subrecipient's risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: The Agency's internal control did not effectively identify policies and procedures for monitoring subrecipients, and the Agency did not comply with federal requirements regarding subrecipient monitoring. The Agency experienced significant key employee turnover during the year. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
Subrecipient Monitoring Federal Program: Department of Health and Human Services Federal Assistance Listing No. 93.044, 93.045, and 93.053 - Aging Cluster Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency Board did not comply with the Uniform Guidance requirement to evaluate each subrecipient's risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: The Agency's internal control did not effectively identify policies and procedures for monitoring subrecipients, and the Agency did not comply with federal requirements regarding subrecipient monitoring. The Agency experienced significant key employee turnover during the year. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Numbers: E-20-MC-25-005, E-21-MC-25-0005, E-22-MC-25-0005, E-20-MW-25-005, and E-20-MW-35-005 Award Year: July 1, 2022–June 30, 2023 Subrecipient Monitoring Type of finding: Material weakness and noncompliance Prior-year finding: Yes Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to 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. According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated. • Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for the four subrecipients selected for testing, but there was no documentation to evidence the nature and extent of the City’s review of the audit reports obtained. Additionally, a documented risk assessment was not performed by the City over the four subrecipients selected for testing prior to entering into a contract. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Additionally, the City requires a risk assessment be completed over each subrecipient. However, due to time constraints, a risk assessment was not completed. Effect Lack of effective controls and written policies and procedures over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements for both risk assessments and review of single audit report procedures. Employees can complete these checklists when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that is completed by employees to formally document review of subrecipient agencies' audit reports. Implementation Date The City implemented use of the Audit Review Certification form starting in Spring 2023 as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023, and will continue use of the form for the FY25 program year beginning on July 1, 2024. Responsible Officials Anthony Woods, Planner and Contract Manager, and Liz Mengers, Planning and Development Manager
Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Numbers: E-20-MC-25-005, E-21-MC-25-0005, E-22-MC-25-0005, E-20-MW-25-005, and E-20-MW-35-005 Award Year: July 1, 2022–June 30, 2023 Subrecipient Monitoring Type of finding: Material weakness and noncompliance Prior-year finding: Yes Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to 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. According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated. • Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for the four subrecipients selected for testing, but there was no documentation to evidence the nature and extent of the City’s review of the audit reports obtained. Additionally, a documented risk assessment was not performed by the City over the four subrecipients selected for testing prior to entering into a contract. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Additionally, the City requires a risk assessment be completed over each subrecipient. However, due to time constraints, a risk assessment was not completed. Effect Lack of effective controls and written policies and procedures over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements for both risk assessments and review of single audit report procedures. Employees can complete these checklists when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that is completed by employees to formally document review of subrecipient agencies' audit reports. Implementation Date The City implemented use of the Audit Review Certification form starting in Spring 2023 as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023, and will continue use of the form for the FY25 program year beginning on July 1, 2024. Responsible Officials Anthony Woods, Planner and Contract Manager, and Liz Mengers, Planning and Development Manager
Program: HOME Investment Partnerships Program (HOME) ALN #: 14.239 Federal Agency: Department of Housing and Urban Development Federal Award Number: M22-MC250202 Award Year: July 1, 2022–June 30, 2023 Eligibility/Subrecipient Monitoring Type of finding: Noncompliance Prior-year finding: No Statistically valid sample: No Criteria 24 CFR 92.252, Qualification as affordable housing: Rental housing (e) Periods of affordability. The HOME-assisted units must meet the affordability requirements for not less than the applicable period specified in the following table, beginning after project completion. (1) The affordability requirements: (i) Apply without regard to the term of any loan or mortgage, repayment of the HOME investment, or the transfer of ownership (ii) Must be imposed by a deed restriction, a covenant running with the land, an agreement restricting the use of the property, or other mechanisms approved by HUD and must give the participating jurisdiction the right to require specific performance (except that the participating jurisdiction may provide that the affordability restrictions may terminate upon foreclosure or transfer in lieu of foreclosure) (iii) Must be recorded in accordance with State recordation laws. (2) The participating jurisdiction may use purchase options, rights of first refusal, or other preemptive rights to purchase the housing before foreclosure or deed in lieu of foreclosure in order to preserve affordability. (3) The affordability restrictions shall be revived according to the original terms if, during the original affordability period, the owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or had family or business ties obtains an ownership interest in the project or property. 4) The termination of the restrictions on the project does not terminate the participating jurisdiction’s repayment obligation under § 92.503(b). (h) Tenant income. The income of each tenant must be determined initially in accordance with § 92.203(a)(1)(i). In addition, each year during the period of affordability the project owner must reexamine each tenant’s annual income in accordance with one of the options in § 92.203 selected by the participating jurisdiction. 24 CFR92.203 Income determinations (a) The HOME program has income-targeting requirements for the HOME program and for HOME projects. Therefore, the participating jurisdiction must determine each family is income eligible by determining the family’s annual income. (1) For families who are tenants in HOME-assisted housing and not receiving HOME tenant-based rental assistance, the participating jurisdiction must initially determine annual income using the method in paragraph (a)(1)(i) of this section. For subsequent income determinations during the period of affordability, the participating jurisdiction may use any one of the following methods in accordance with § 92.252(h): (ii) Obtain from the family a written statement of the amount of the family’s annual income and family size, along with a certification that the information is complete and accurate. The certification must state that the family will provide source documents upon request. Title 45 US Code of Federal Regulations Part 75 (45 CFR part 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303 also states that nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, the 2 CFR sections 200.332(d) through (f) provide the principles to be applied to 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. Condition During our testwork, we noted there were two individuals residing in a facility financed with a City HOME loan who did not meet the low-income requirements and were therefore determined not to be eligible. Cause The City’s property manager failed to ensure that another unit, or the next available unit, within the building would be designated as a HOME-floating unit as required in its loan agreement with the City. Effect Ineligible recipients could potentially cause the City to not be in compliance with HUD requirements. Questioned Costs Not determinable Recommendation We recommend the City work collaboratively with its property managers to ensure that the correct number of units are being designated as HOME-assisted units. Views of Responsible Officials and Corrective Actions The two individuals determined to have incomes in excess of HOME Program limits were noted in our FY23 monitoring of properties assisted with HOME funds. The HOME Program allows for a unit to be occupied by a household who was initially eligible and whose income later increases, but requires that a comparable unit be designated as a HOME unit and leased to an eligible household when one is available. Owners of each property were made aware of the circumstance when City monitoring was completed. Each will designate comparable units to be HOME units when available and lease them to eligible households. Implementation Date Dependent on when residents move and/or appropriate units are available. Responsible Officials Chris Cotter, Housing Director & Judith Tumusiime, Federal Grants Manager, Cambridge Community Development Department
Program: Housing Opportunities for Persons with AIDS (HOPWA) ALN #: 14.241 Federal Agency: Housing and Urban Development Federal Award Numbers: MAH22-F005, MAH20-F005, and MAH21-F005 Award Year: July 1, 2022–June 30, 2023 Subrecipient Monitoring Type of finding: Material weakness and noncompliance Prior-year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to 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. According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated. • Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for the four subrecipients selected for testing, but there was no documentation to evidence the nature and extent of the City’s review of the reports obtained. Additionally, a documented risk assessment was not performed by the City over the four subrecipients selected for testing prior to entering into a contract. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Additionally, the City requires a risk assessment be completed over each subrecipient. However, due to time constraints, a risk assessment was not completed. Effect Lack of effective controls and written policies and procedures over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements for both risk assessments and review of single audit report procedures. Employees can complete these checklists when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City will incorporate a more formal review of financial audits of subrecipients in conjunction with new contracts moving forward. These audits, and City staff’s verification of assessment will be included in each subrecipient file. Implementation Date FY2025 Contracts Responsible Officials Robert Keller, Project Planner, Cambridge Community Development Department, and Judith Tumusiime, Federal Grants Manager, Cambridge Community Development Department
Program: Housing Opportunities for Persons with AIDS (HOPWA) ALN #: 14.241 Federal Agency: Housing and Urban Development Federal Award Numbers: MAH22-F005, MAH20-F005, and MAH21-F005 Award Year: July 1, 2022–June 30, 2023 Subrecipient Monitoring Type of finding: Material weakness and noncompliance Prior-year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to 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. According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated. • Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for the four subrecipients selected for testing, but there was no documentation to evidence the nature and extent of the City’s review of the reports obtained. Additionally, a documented risk assessment was not performed by the City over the four subrecipients selected for testing prior to entering into a contract. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Additionally, the City requires a risk assessment be completed over each subrecipient. However, due to time constraints, a risk assessment was not completed. Effect Lack of effective controls and written policies and procedures over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements for both risk assessments and review of single audit report procedures. Employees can complete these checklists when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City will incorporate a more formal review of financial audits of subrecipients in conjunction with new contracts moving forward. These audits, and City staff’s verification of assessment will be included in each subrecipient file. Implementation Date FY2025 Contracts Responsible Officials Robert Keller, Project Planner, Cambridge Community Development Department, and Judith Tumusiime, Federal Grants Manager, Cambridge Community Development Department
Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: NA Award Year: July 1, 2022–June 30, 2023 Subrecipient Monitoring Type of finding: Material weakness and noncompliance Prior-year finding: Yes Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to 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. According to 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated. • Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for the four subrecipients selected for testing, but there was no documentation to evidence the nature and extent of the City’s review of the audit reports obtained. Additionally, a documented risk assessment was not performed by the City over the four subrecipients selected for testing prior to entering into a contract. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Additionally, the City requires a risk assessment be completed over each subrecipient. However, due to time constraints, a risk assessment was not completed or documented. Effect Lack of effective controls and written policies and procedures over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements for both risk assessments and review of single audit report procedures. Employees can complete these checklists when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City will use a subrecipient audit certification form and a subrecipient risk assessment questionnaire to evaluate a subrecipient's risk/experience with federal funds as well as assess their federal funding threshold for having a single audit. Implementation Date FY25 Contracts (7/1/2024) Responsible Officials Michele Kincaid, Assistant Finance Director, and Sharon Pu, Grants Management
Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: NA Award Year: July 1, 2022–June 30, 2023 Subrecipient Monitoring Type of finding: Material weakness and noncompliance Prior-year finding: Yes Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to 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. According to 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated. • Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for the four subrecipients selected for testing, but there was no documentation to evidence the nature and extent of the City’s review of the audit reports obtained. Additionally, a documented risk assessment was not performed by the City over the four subrecipients selected for testing prior to entering into a contract. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Additionally, the City requires a risk assessment be completed over each subrecipient. However, due to time constraints, a risk assessment was not completed or documented. Effect Lack of effective controls and written policies and procedures over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements for both risk assessments and review of single audit report procedures. Employees can complete these checklists when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City will use a subrecipient audit certification form and a subrecipient risk assessment questionnaire to evaluate a subrecipient's risk/experience with federal funds as well as assess their federal funding threshold for having a single audit. Implementation Date FY25 Contracts (7/1/2024) Responsible Officials Michele Kincaid, Assistant Finance Director, and Sharon Pu, Grants Management
Reference Number: 2023-007 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: 2021 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters Criteria or Specific Requirement: Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must: (a) 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 award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements. Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a 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 statues, regulations, and the terms and conditions of the federal awards. 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: The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F). Context: Exceptions were noted for 8 of 8 subrecipients selected for testing: • The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: 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 years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis. Questioned Costs: Undetermined. Recommendation: The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed. Views of Responsible Officials: The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007 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: 2021 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters Criteria or Specific Requirement: Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must: (a) 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 award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements. Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a 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 statues, regulations, and the terms and conditions of the federal awards. 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: The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F). Context: Exceptions were noted for 8 of 8 subrecipients selected for testing: • The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: 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 years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis. Questioned Costs: Undetermined. Recommendation: The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed. Views of Responsible Officials: The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007 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: 2021 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters Criteria or Specific Requirement: Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must: (a) 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 award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements. Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a 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 statues, regulations, and the terms and conditions of the federal awards. 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: The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F). Context: Exceptions were noted for 8 of 8 subrecipients selected for testing: • The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements. Cause: The County did not establish effective internal controls and procedures over subrecipient monitoring. Effect: 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 years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis. Questioned Costs: Undetermined. Recommendation: The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed. Views of Responsible Officials: The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Public Health Federal Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Assistance Listing Number: 10.557 Award Number and Year: 224MA702W1003 (10/1/2021 – 9/30/2022) 234MA702W1003 (10/1/2022 – 9/30/2023) Compliance Requirement: Eligibility- Subrecipient Agreements Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR section 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. 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: The subaward agreements issued to eligible subrecipients was did not contain all of the required data. The subaward agreements did not contain the federal award identification number (FAIN) or federal award date. Context: For 8 of 8 subawards selected for testing, the Federal Award Identification Number (FAIN) and Federal Award Date were not included in the agreement provided to the subrecipient. Questioned costs: None Cause: The Department utilizes a standard subaward that was not updated to include all federal subaward requirements. Effect: The exclusion of required federal grant award information may cause subrecipients to be uninformed about specific program and regulatory information. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in all subawards and that proper subrecipient monitoring is conducted. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-005 Prior Year Finding: 2022-004 Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Number and Year: 202222N202044 (10/1/2021 – 9/30/2022), 202323N202044 (10/1/2022 – 9/30/2023), 202323N119944 (1/1/2022 – 9/30/2023), 202323N202044 (10/1/2022 – 9/30/2023), 202323N119944 (10/1/2022 – 9/30/2023) Compliance Requirement: Eligibility, Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Compliance: Eligibility – Per 7 CFR section 226.2, subrecipients must meet the definition of “independent center” or “sponsoring organization”. In addition, all institutions must also meet the eligibility requirements stated in 7 CFR section 226.15 and 42 USC 1766(a)(6) and (d)(l). Definitions include: 1) Independent center means a child care center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the state agency to assume final administrative and financial responsibility for program operations. 2) Sponsoring organization means a public or nonprofit private organization that is entirely responsible for the administration of the food program. 3) For-profit center means a child care center, outside-school-hours care center, or adult day care center providing nonresidential care to adults or children that does not qualify for tax-exempt status under the Internal Revenue Code of 1986. For-profit centers serving adults must meet the criteria described in paragraph (a) of this definition. For-profit centers serving children must meet the criteria described in paragraphs (b )(1) or (b )(2) of this definition, except that children who only participate in the at-risk afterschool snack and/or meal component of the program must not be considered in determining the percentages under paragraphs (b )( 1) or (b)(2) of this definition. Subrecipient Monitoring – 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; 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that it issued subawards in compliance with federal regulations. Context: Sixty subawards were selected for testing. The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. The following exceptions were noted: • For one of sixty subawards selected for testing, the Department could not provide documentation that it had obtained the subrecipient’s Unique Entity Identifier prior to the issuance of the subaward. • For six of sixty subrecipients selected for testing, the Department did not have an approved permanent agreement on file prior to the start date of the contract. Therefore, the Department was unable to provide documentation that it had determined subrecipient eligibility prior to the start date of the contract. Questioned costs: Undetermined. Cause: The Department’s procedures and controls were not sufficient to ensure that subawards were issued in compliance with federal regulations and that subrecipient eligibility was determined prior to issuance of contracts. Effect: Failure to ensure subrecipients are eligible to receive program funding and failure to ensure subrecipients have a registered unique entity identification number could result in unauthorized entities receiving program funding. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all subrecipients are eligible to receive program funds and that required information is obtained prior to entering into a subrecipient agreement. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-005 Prior Year Finding: 2022-004 Federal Agency: U.S. Department of Agriculture State Agency: Department of Elementary and Secondary Education Federal Program: Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Number and Year: 202222N202044 (10/1/2021 – 9/30/2022), 202323N202044 (10/1/2022 – 9/30/2023), 202323N119944 (1/1/2022 – 9/30/2023), 202323N202044 (10/1/2022 – 9/30/2023), 202323N119944 (10/1/2022 – 9/30/2023) Compliance Requirement: Eligibility, Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Compliance: Eligibility – Per 7 CFR section 226.2, subrecipients must meet the definition of “independent center” or “sponsoring organization”. In addition, all institutions must also meet the eligibility requirements stated in 7 CFR section 226.15 and 42 USC 1766(a)(6) and (d)(l). Definitions include: 1) Independent center means a child care center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the state agency to assume final administrative and financial responsibility for program operations. 2) Sponsoring organization means a public or nonprofit private organization that is entirely responsible for the administration of the food program. 3) For-profit center means a child care center, outside-school-hours care center, or adult day care center providing nonresidential care to adults or children that does not qualify for tax-exempt status under the Internal Revenue Code of 1986. For-profit centers serving adults must meet the criteria described in paragraph (a) of this definition. For-profit centers serving children must meet the criteria described in paragraphs (b )(1) or (b )(2) of this definition, except that children who only participate in the at-risk afterschool snack and/or meal component of the program must not be considered in determining the percentages under paragraphs (b )( 1) or (b)(2) of this definition. Subrecipient Monitoring – 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; 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that it issued subawards in compliance with federal regulations. Context: Sixty subawards were selected for testing. The Department documents subrecipient eligibility in a permanent agreement with each subrecipient. The following exceptions were noted: • For one of sixty subawards selected for testing, the Department could not provide documentation that it had obtained the subrecipient’s Unique Entity Identifier prior to the issuance of the subaward. • For six of sixty subrecipients selected for testing, the Department did not have an approved permanent agreement on file prior to the start date of the contract. Therefore, the Department was unable to provide documentation that it had determined subrecipient eligibility prior to the start date of the contract. Questioned costs: Undetermined. Cause: The Department’s procedures and controls were not sufficient to ensure that subawards were issued in compliance with federal regulations and that subrecipient eligibility was determined prior to issuance of contracts. Effect: Failure to ensure subrecipients are eligible to receive program funding and failure to ensure subrecipients have a registered unique entity identification number could result in unauthorized entities receiving program funding. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all subrecipients are eligible to receive program funds and that required information is obtained prior to entering into a subrecipient agreement. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-013 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV-35786-21-55-5-25 (10/1/2020 – 12/31/2022), DV-37859-22-55-5-25 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) 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 - 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. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Per 2 CFR section 200.331 - Subrecipient and contractor determinations states, in part, that a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. 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: The Executive Office of Labor and Workforce Development (Department) omitted required federal award information from subawards it issued from the programs and did not adequately monitor subrecipients. Context: WIOA Cluster: Six out of eighteen subrecipients were selected for testing. The following exceptions were noted: • For 6 of 6 subawards issued, the Federal Award Identification Number (FAIN) and Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. • For 1 of 6 subrecipients selected for testing, no subaward monitoring was performed during the audit period. • For 1 of 6 subrecipients selected for testing, subaward monitoring was not completed in accordance with the Department’s policy. • For 1 of 6 subrecipients selected for testing, a determination on whether the entity was a subrecipient was unable to be made based on the documentation provided. • One subrecipient was excluded from subrecipient testing based on auditor analysis that the entity did not meet the definition of a subrecipient. The Schedule of Expenditures of Federal Awards was not adjusted to reflect the classification change. Employment Service Cluster: Five out of sixteen subrecipients were selected for testing. The following exceptions were noted: • For 5 of 5 subawards issued, the Federal Award Identification Number (FAIN) and the Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required information nor that subrecipient monitoring was completed in accordance with the requirements of the federal programs. Effect: Excluding 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. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. 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 Department personnel on a timely basis. Questioned costs: WIOA Cluster: Undetermined Employment Service Cluster: None Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required information is included in its subawards. We also recommend the Department review and enhance its internal controls and procedures to ensure subrecipient monitoring is performed in compliance with the requirements of the federal programs. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-013 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV-35786-21-55-5-25 (10/1/2020 – 12/31/2022), DV-37859-22-55-5-25 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) 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 - 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. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Per 2 CFR section 200.331 - Subrecipient and contractor determinations states, in part, that a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. 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: The Executive Office of Labor and Workforce Development (Department) omitted required federal award information from subawards it issued from the programs and did not adequately monitor subrecipients. Context: WIOA Cluster: Six out of eighteen subrecipients were selected for testing. The following exceptions were noted: • For 6 of 6 subawards issued, the Federal Award Identification Number (FAIN) and Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. • For 1 of 6 subrecipients selected for testing, no subaward monitoring was performed during the audit period. • For 1 of 6 subrecipients selected for testing, subaward monitoring was not completed in accordance with the Department’s policy. • For 1 of 6 subrecipients selected for testing, a determination on whether the entity was a subrecipient was unable to be made based on the documentation provided. • One subrecipient was excluded from subrecipient testing based on auditor analysis that the entity did not meet the definition of a subrecipient. The Schedule of Expenditures of Federal Awards was not adjusted to reflect the classification change. Employment Service Cluster: Five out of sixteen subrecipients were selected for testing. The following exceptions were noted: • For 5 of 5 subawards issued, the Federal Award Identification Number (FAIN) and the Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required information nor that subrecipient monitoring was completed in accordance with the requirements of the federal programs. Effect: Excluding 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. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. 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 Department personnel on a timely basis. Questioned costs: WIOA Cluster: Undetermined Employment Service Cluster: None Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required information is included in its subawards. We also recommend the Department review and enhance its internal controls and procedures to ensure subrecipient monitoring is performed in compliance with the requirements of the federal programs. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-013 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV-35786-21-55-5-25 (10/1/2020 – 12/31/2022), DV-37859-22-55-5-25 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) 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 - 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. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Per 2 CFR section 200.331 - Subrecipient and contractor determinations states, in part, that a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. 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: The Executive Office of Labor and Workforce Development (Department) omitted required federal award information from subawards it issued from the programs and did not adequately monitor subrecipients. Context: WIOA Cluster: Six out of eighteen subrecipients were selected for testing. The following exceptions were noted: • For 6 of 6 subawards issued, the Federal Award Identification Number (FAIN) and Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. • For 1 of 6 subrecipients selected for testing, no subaward monitoring was performed during the audit period. • For 1 of 6 subrecipients selected for testing, subaward monitoring was not completed in accordance with the Department’s policy. • For 1 of 6 subrecipients selected for testing, a determination on whether the entity was a subrecipient was unable to be made based on the documentation provided. • One subrecipient was excluded from subrecipient testing based on auditor analysis that the entity did not meet the definition of a subrecipient. The Schedule of Expenditures of Federal Awards was not adjusted to reflect the classification change. Employment Service Cluster: Five out of sixteen subrecipients were selected for testing. The following exceptions were noted: • For 5 of 5 subawards issued, the Federal Award Identification Number (FAIN) and the Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required information nor that subrecipient monitoring was completed in accordance with the requirements of the federal programs. Effect: Excluding 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. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. 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 Department personnel on a timely basis. Questioned costs: WIOA Cluster: Undetermined Employment Service Cluster: None Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required information is included in its subawards. We also recommend the Department review and enhance its internal controls and procedures to ensure subrecipient monitoring is performed in compliance with the requirements of the federal programs. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-013 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV-35786-21-55-5-25 (10/1/2020 – 12/31/2022), DV-37859-22-55-5-25 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) 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 - 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. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Per 2 CFR section 200.331 - Subrecipient and contractor determinations states, in part, that a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. 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: The Executive Office of Labor and Workforce Development (Department) omitted required federal award information from subawards it issued from the programs and did not adequately monitor subrecipients. Context: WIOA Cluster: Six out of eighteen subrecipients were selected for testing. The following exceptions were noted: • For 6 of 6 subawards issued, the Federal Award Identification Number (FAIN) and Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. • For 1 of 6 subrecipients selected for testing, no subaward monitoring was performed during the audit period. • For 1 of 6 subrecipients selected for testing, subaward monitoring was not completed in accordance with the Department’s policy. • For 1 of 6 subrecipients selected for testing, a determination on whether the entity was a subrecipient was unable to be made based on the documentation provided. • One subrecipient was excluded from subrecipient testing based on auditor analysis that the entity did not meet the definition of a subrecipient. The Schedule of Expenditures of Federal Awards was not adjusted to reflect the classification change. Employment Service Cluster: Five out of sixteen subrecipients were selected for testing. The following exceptions were noted: • For 5 of 5 subawards issued, the Federal Award Identification Number (FAIN) and the Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required information nor that subrecipient monitoring was completed in accordance with the requirements of the federal programs. Effect: Excluding 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. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. 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 Department personnel on a timely basis. Questioned costs: WIOA Cluster: Undetermined Employment Service Cluster: None Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required information is included in its subawards. We also recommend the Department review and enhance its internal controls and procedures to ensure subrecipient monitoring is performed in compliance with the requirements of the federal programs. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-012 Prior Year Finding: 2022-013 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV-35786-21-55-5-25 (10/1/2020 – 12/31/2022), DV-37859-22-55-5-25 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) 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 - 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. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Per 2 CFR section 200.331 - Subrecipient and contractor determinations states, in part, that a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. 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: The Executive Office of Labor and Workforce Development (Department) omitted required federal award information from subawards it issued from the programs and did not adequately monitor subrecipients. Context: WIOA Cluster: Six out of eighteen subrecipients were selected for testing. The following exceptions were noted: • For 6 of 6 subawards issued, the Federal Award Identification Number (FAIN) and Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. • For 1 of 6 subrecipients selected for testing, no subaward monitoring was performed during the audit period. • For 1 of 6 subrecipients selected for testing, subaward monitoring was not completed in accordance with the Department’s policy. • For 1 of 6 subrecipients selected for testing, a determination on whether the entity was a subrecipient was unable to be made based on the documentation provided. • One subrecipient was excluded from subrecipient testing based on auditor analysis that the entity did not meet the definition of a subrecipient. The Schedule of Expenditures of Federal Awards was not adjusted to reflect the classification change. Employment Service Cluster: Five out of sixteen subrecipients were selected for testing. The following exceptions were noted: • For 5 of 5 subawards issued, the Federal Award Identification Number (FAIN) and the Federal award date of award to the recipient by the Federal agency were not included on the subaward agreement. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required information nor that subrecipient monitoring was completed in accordance with the requirements of the federal programs. Effect: Excluding 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. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. 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 Department personnel on a timely basis. Questioned costs: WIOA Cluster: Undetermined Employment Service Cluster: None Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required information is included in its subawards. We also recommend the Department review and enhance its internal controls and procedures to ensure subrecipient monitoring is performed in compliance with the requirements of the federal programs. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-015 Prior Year Finding: No Federal Agency: U.S. Department of the Treasury State Agency: Executive Office of Housing and Livable Communities Federal Program: COVID-19 – Emergency Rental Assistance Program Assistance Listing Number: 21.023 Award Number and Year: ERA-1 (12/27/2020 – 9/30/2022), ERA-2 (5/1/2021 – 9/30/2025) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Compliance: 2 CFR section 200.332(a) - Requirements for Pass-Through Entities states, in part, that 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 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: The Executive Office of Housing and Livable Communities (Department) omitted required federal award information from subawards it issued from the program. Context: Eight subawards were selected for testing and the following exceptions were noted: • For 8 of 8 subawards issued, the Federal Award Identification Number (FAIN) and the Federal award date of award to the recipient by the Federal agency were not included on the subaward agreements. • For 7 of 8 subawards issued, the name of the Federal awarding agency, pass-through entity, and contact information for the awarding official of the pass-through entity were not included on the subaward agreements. • For 3 of 8 subawards issued, the assistance listing number and program title were not included on the subaward agreements. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required information. Internal controls did not detect or prevent the errors. Effect: The Commonwealth was not in compliance with 2 CFR section 200.332(a). Excluding 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. Questioned costs: None. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required information is included in its subawards. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-019 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Massachusetts Executive Office of Education Federal Program: COVID-19 – Governor’s Emergency Education Relief (GEER) Fund Assistance Listing Number: 84.425C Award Number and Year: S425C200005 (5/4/2020 – 9/30/2021) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.332(a) Requirements for Pass-Through Entities states, in part, that 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that subawards it issued contained all required federal information. Context: One of sixty subawards selected for testing did not include the following required information: • Federal Award Identification Number (FAIN), • Federal Award Date of award to the recipient by the Federal agency, • Subaward Period of Performance Start and End Date, • Subaward Budget Period Start and End Date, • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity, • Assistance Listing number and Title. Cause: The Department’s procedures and controls were not sufficient to ensure that it issued subawards in compliance with federal requirements. 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. Questioned costs: None noted. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in all subawards. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-019 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Massachusetts Executive Office of Education Federal Program: COVID-19 – Governor’s Emergency Education Relief (GEER) Fund Assistance Listing Number: 84.425C Award Number and Year: S425C200005 (5/4/2020 – 9/30/2021) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.332(a) Requirements for Pass-Through Entities states, in part, that 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that subawards it issued contained all required federal information. Context: One of sixty subawards selected for testing did not include the following required information: • Federal Award Identification Number (FAIN), • Federal Award Date of award to the recipient by the Federal agency, • Subaward Period of Performance Start and End Date, • Subaward Budget Period Start and End Date, • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity, • Assistance Listing number and Title. Cause: The Department’s procedures and controls were not sufficient to ensure that it issued subawards in compliance with federal requirements. 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. Questioned costs: None noted. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in all subawards. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-019 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Massachusetts Executive Office of Education Federal Program: COVID-19 – Governor’s Emergency Education Relief (GEER) Fund Assistance Listing Number: 84.425C Award Number and Year: S425C200005 (5/4/2020 – 9/30/2021) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.332(a) Requirements for Pass-Through Entities states, in part, that 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that subawards it issued contained all required federal information. Context: One of sixty subawards selected for testing did not include the following required information: • Federal Award Identification Number (FAIN), • Federal Award Date of award to the recipient by the Federal agency, • Subaward Period of Performance Start and End Date, • Subaward Budget Period Start and End Date, • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity, • Assistance Listing number and Title. Cause: The Department’s procedures and controls were not sufficient to ensure that it issued subawards in compliance with federal requirements. 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. Questioned costs: None noted. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in all subawards. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-019 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Massachusetts Executive Office of Education Federal Program: COVID-19 – Governor’s Emergency Education Relief (GEER) Fund Assistance Listing Number: 84.425C Award Number and Year: S425C200005 (5/4/2020 – 9/30/2021) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.332(a) Requirements for Pass-Through Entities states, in part, that 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that subawards it issued contained all required federal information. Context: One of sixty subawards selected for testing did not include the following required information: • Federal Award Identification Number (FAIN), • Federal Award Date of award to the recipient by the Federal agency, • Subaward Period of Performance Start and End Date, • Subaward Budget Period Start and End Date, • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity, • Assistance Listing number and Title. Cause: The Department’s procedures and controls were not sufficient to ensure that it issued subawards in compliance with federal requirements. 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. Questioned costs: None noted. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in all subawards. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-019 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Massachusetts Executive Office of Education Federal Program: COVID-19 – Governor’s Emergency Education Relief (GEER) Fund Assistance Listing Number: 84.425C Award Number and Year: S425C200005 (5/4/2020 – 9/30/2021) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.332(a) Requirements for Pass-Through Entities states, in part, that 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that subawards it issued contained all required federal information. Context: One of sixty subawards selected for testing did not include the following required information: • Federal Award Identification Number (FAIN), • Federal Award Date of award to the recipient by the Federal agency, • Subaward Period of Performance Start and End Date, • Subaward Budget Period Start and End Date, • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity, • Assistance Listing number and Title. Cause: The Department’s procedures and controls were not sufficient to ensure that it issued subawards in compliance with federal requirements. 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. Questioned costs: None noted. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in all subawards. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-019 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Massachusetts Executive Office of Education Federal Program: COVID-19 – Governor’s Emergency Education Relief (GEER) Fund Assistance Listing Number: 84.425C Award Number and Year: S425C200005 (5/4/2020 – 9/30/2021) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.332(a) Requirements for Pass-Through Entities states, in part, that 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 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: The Department of Elementary and Secondary Education (Department) was unable to provide documentation that subawards it issued contained all required federal information. Context: One of sixty subawards selected for testing did not include the following required information: • Federal Award Identification Number (FAIN), • Federal Award Date of award to the recipient by the Federal agency, • Subaward Period of Performance Start and End Date, • Subaward Budget Period Start and End Date, • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity, • Assistance Listing number and Title. Cause: The Department’s procedures and controls were not sufficient to ensure that it issued subawards in compliance with federal requirements. 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. Questioned costs: None noted. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in all subawards. Views of Responsible Officials: Management agrees with the finding.