Finding 2022-001: Failure to Establish Subrecipient Monitoring Procedures Federal Agency: U.S. Department of Health and Human Services (HHS) Program Name: Research and Development Programs ALN and Program Expenditures: Various ($2,585,762) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency and Material Noncompliance Condition Found: The Carle Foundation did not perform a risk assessment or subrecipient monitoring procedures for subrecipients of Research and Development Programs for the year end December 31, 2022. Carle designated Vanderbilt University and the University of Illinois Urbana-Champaign as subrecipients for the programs. As a pass-through entity, Carle was responsible for: ? Identifying the award and applicable requirements, ? Evaluating the subrecipient?s risk of noncompliance for purposes of determining the appropriate monitoring procedures related to the subaward, ? Monitoring the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, that the subrecipient complies with the terms and conditions of the subaward, that the subrecipient achieves performance goals, and ? Issuing a management decision for single audit findings pertaining to the federal award provided to the subrecipient, if applicable. During our testing, we noted Carle did not perform any subrecipient monitoring procedures over subrecipients with respect to the Research and Development Programs during the year ended December 31, 2022. Amounts passed through to subrecipients totaled $115,061 for the year ended December 31, 2022. Criteria or Requirement: Per 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include establishing and performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: The Grants Administration Office engaged with Clifton Larson Allen Consulting in the fall of 2022 to compose multiple, essential policies (including Sub-Recipient Monitoring) required to manage Carle?s growing grants portfolio and maintain compliance with per the terms and conditions of the awards, the awarding agencies? regulations, and 2 CFR Part 200, The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The draft policies were circulated, reviewed, and discussed by the Grants Administration Office and leadership in Research, Accounting, Capital, and Compliance prior to finalizing, but were not able to be published prior to initiating subawards on an NIH R01 transfer for our new Director of Clinical Imaging Research, Dr. Bruce Damon. The Grants Administration Office had to accept Dr. Damon?s transfer from Vanderbilt when he joined Carle and initiate the subawards so that his grant activity kept pace with sponsor milestones and deliverables as required by the award. Possible Asserted Effect: Failure to perform required risk assessments and to adequately monitor subrecipients may result in the subrecipient not properly administering the federal program in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend The Carle Foundation implement subrecipient monitoring procedures in accordance with federal regulations. Views of Management: Carle did perform informal risk assessments of both sub-recipients prior to issuance in order to support Dr. Damon?s incoming NIH award and engage with both critical sub-recipient collaborators promptly. Activities at the University of Illinois and Vanderbilt had to continue on the planned research effort for his transferred NIH award even though our related policy was in final draft form and not yet published. In making the decision to proceed, the Grants Administration Office confirmed that the final draft of the Sub-Recipient Monitoring policy, as well as the Risk Assessment Matrix tool, attached to the policy, had been circulated with leadership and key stakeholders in Research, Accounting, Finance, and Compliance, and resulted in no material edits. Additionally, the Grants Administration Office judged both prospective institutions as viable recipients of federal funding based on their current and active SAM.gov registrations at the time of issuance, the integrity of these well-established academic institutions, as well as Carle?s longstanding relationship with the University of Illinois (with multiple types of agreements already in place). To ensure appropriate safeguards, Carle issued its subawards using a standard FDP Clearinghouse template, compliant with federal regulations. Included in the subaward terms and conditions were all of the required attestations that both institutions signed, regarding Conflict of Interest, Lobbying, Debarment, Audit, 2CFR 200, FFATA, Data Sharing, Copyrights, and Human Subjects Protection. All invoices from our sub-recipients were received monthly as per the agreement and reviewed by both the Grants Administration Office and Dr. Damon for allowability prior to payment.
Finding 2022-001: Failure to Establish Subrecipient Monitoring Procedures Federal Agency: U.S. Department of Health and Human Services (HHS) Program Name: Research and Development Programs ALN and Program Expenditures: Various ($2,585,762) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency and Material Noncompliance Condition Found: The Carle Foundation did not perform a risk assessment or subrecipient monitoring procedures for subrecipients of Research and Development Programs for the year end December 31, 2022. Carle designated Vanderbilt University and the University of Illinois Urbana-Champaign as subrecipients for the programs. As a pass-through entity, Carle was responsible for: ? Identifying the award and applicable requirements, ? Evaluating the subrecipient?s risk of noncompliance for purposes of determining the appropriate monitoring procedures related to the subaward, ? Monitoring the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, that the subrecipient complies with the terms and conditions of the subaward, that the subrecipient achieves performance goals, and ? Issuing a management decision for single audit findings pertaining to the federal award provided to the subrecipient, if applicable. During our testing, we noted Carle did not perform any subrecipient monitoring procedures over subrecipients with respect to the Research and Development Programs during the year ended December 31, 2022. Amounts passed through to subrecipients totaled $115,061 for the year ended December 31, 2022. Criteria or Requirement: Per 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include establishing and performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: The Grants Administration Office engaged with Clifton Larson Allen Consulting in the fall of 2022 to compose multiple, essential policies (including Sub-Recipient Monitoring) required to manage Carle?s growing grants portfolio and maintain compliance with per the terms and conditions of the awards, the awarding agencies? regulations, and 2 CFR Part 200, The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The draft policies were circulated, reviewed, and discussed by the Grants Administration Office and leadership in Research, Accounting, Capital, and Compliance prior to finalizing, but were not able to be published prior to initiating subawards on an NIH R01 transfer for our new Director of Clinical Imaging Research, Dr. Bruce Damon. The Grants Administration Office had to accept Dr. Damon?s transfer from Vanderbilt when he joined Carle and initiate the subawards so that his grant activity kept pace with sponsor milestones and deliverables as required by the award. Possible Asserted Effect: Failure to perform required risk assessments and to adequately monitor subrecipients may result in the subrecipient not properly administering the federal program in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend The Carle Foundation implement subrecipient monitoring procedures in accordance with federal regulations. Views of Management: Carle did perform informal risk assessments of both sub-recipients prior to issuance in order to support Dr. Damon?s incoming NIH award and engage with both critical sub-recipient collaborators promptly. Activities at the University of Illinois and Vanderbilt had to continue on the planned research effort for his transferred NIH award even though our related policy was in final draft form and not yet published. In making the decision to proceed, the Grants Administration Office confirmed that the final draft of the Sub-Recipient Monitoring policy, as well as the Risk Assessment Matrix tool, attached to the policy, had been circulated with leadership and key stakeholders in Research, Accounting, Finance, and Compliance, and resulted in no material edits. Additionally, the Grants Administration Office judged both prospective institutions as viable recipients of federal funding based on their current and active SAM.gov registrations at the time of issuance, the integrity of these well-established academic institutions, as well as Carle?s longstanding relationship with the University of Illinois (with multiple types of agreements already in place). To ensure appropriate safeguards, Carle issued its subawards using a standard FDP Clearinghouse template, compliant with federal regulations. Included in the subaward terms and conditions were all of the required attestations that both institutions signed, regarding Conflict of Interest, Lobbying, Debarment, Audit, 2CFR 200, FFATA, Data Sharing, Copyrights, and Human Subjects Protection. All invoices from our sub-recipients were received monthly as per the agreement and reviewed by both the Grants Administration Office and Dr. Damon for allowability prior to payment.
Finding 2022-001: Failure to Establish Subrecipient Monitoring Procedures Federal Agency: U.S. Department of Health and Human Services (HHS) Program Name: Research and Development Programs ALN and Program Expenditures: Various ($2,585,762) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency and Material Noncompliance Condition Found: The Carle Foundation did not perform a risk assessment or subrecipient monitoring procedures for subrecipients of Research and Development Programs for the year end December 31, 2022. Carle designated Vanderbilt University and the University of Illinois Urbana-Champaign as subrecipients for the programs. As a pass-through entity, Carle was responsible for: ? Identifying the award and applicable requirements, ? Evaluating the subrecipient?s risk of noncompliance for purposes of determining the appropriate monitoring procedures related to the subaward, ? Monitoring the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, that the subrecipient complies with the terms and conditions of the subaward, that the subrecipient achieves performance goals, and ? Issuing a management decision for single audit findings pertaining to the federal award provided to the subrecipient, if applicable. During our testing, we noted Carle did not perform any subrecipient monitoring procedures over subrecipients with respect to the Research and Development Programs during the year ended December 31, 2022. Amounts passed through to subrecipients totaled $115,061 for the year ended December 31, 2022. Criteria or Requirement: Per 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include establishing and performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: The Grants Administration Office engaged with Clifton Larson Allen Consulting in the fall of 2022 to compose multiple, essential policies (including Sub-Recipient Monitoring) required to manage Carle?s growing grants portfolio and maintain compliance with per the terms and conditions of the awards, the awarding agencies? regulations, and 2 CFR Part 200, The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The draft policies were circulated, reviewed, and discussed by the Grants Administration Office and leadership in Research, Accounting, Capital, and Compliance prior to finalizing, but were not able to be published prior to initiating subawards on an NIH R01 transfer for our new Director of Clinical Imaging Research, Dr. Bruce Damon. The Grants Administration Office had to accept Dr. Damon?s transfer from Vanderbilt when he joined Carle and initiate the subawards so that his grant activity kept pace with sponsor milestones and deliverables as required by the award. Possible Asserted Effect: Failure to perform required risk assessments and to adequately monitor subrecipients may result in the subrecipient not properly administering the federal program in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend The Carle Foundation implement subrecipient monitoring procedures in accordance with federal regulations. Views of Management: Carle did perform informal risk assessments of both sub-recipients prior to issuance in order to support Dr. Damon?s incoming NIH award and engage with both critical sub-recipient collaborators promptly. Activities at the University of Illinois and Vanderbilt had to continue on the planned research effort for his transferred NIH award even though our related policy was in final draft form and not yet published. In making the decision to proceed, the Grants Administration Office confirmed that the final draft of the Sub-Recipient Monitoring policy, as well as the Risk Assessment Matrix tool, attached to the policy, had been circulated with leadership and key stakeholders in Research, Accounting, Finance, and Compliance, and resulted in no material edits. Additionally, the Grants Administration Office judged both prospective institutions as viable recipients of federal funding based on their current and active SAM.gov registrations at the time of issuance, the integrity of these well-established academic institutions, as well as Carle?s longstanding relationship with the University of Illinois (with multiple types of agreements already in place). To ensure appropriate safeguards, Carle issued its subawards using a standard FDP Clearinghouse template, compliant with federal regulations. Included in the subaward terms and conditions were all of the required attestations that both institutions signed, regarding Conflict of Interest, Lobbying, Debarment, Audit, 2CFR 200, FFATA, Data Sharing, Copyrights, and Human Subjects Protection. All invoices from our sub-recipients were received monthly as per the agreement and reviewed by both the Grants Administration Office and Dr. Damon for allowability prior to payment.
FINDING 2022-004 Subject: Formula Grants for Rural Areas and Tribal Transit Program - Subrecipient Monitoring Federal Agency: Department of Transportation Federal Programs: COVID-19 - Formula Grants for Rural Areas and Tribal Transit Program, Formula Grants for Rural Areas and Tribal Transit Program Assistance Listings Number: 20.509 Federal Award Numbers and Years (or Other Identifying Numbers): EDS#A249-20-G20032, EDS#A249-22-G210088, EDS#A249-22-G210124 Pass-Through Entity: Indiana Department of Transportation Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Condition and Context The County had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, material noncompliance related to the Formula Grants for Rural Areas and Tribal Transit Program funds (Transit program) passed through to a subrecipient. The County received and passed through to a subrecipient $664,071 in Transit program funds. The County is to clearly identify the award and applicable requirements to the subrecipient, evaluate the risk of noncompliance related to the subrecipient to determine appropriate monitoring of the subaward, and monitor the activities of the subrecipient to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. As part of managing the award, the County is to evaluate the subrecipients risk of noncompliance to determine the extent of monitoring. Such factors to consider would include the subrecipients prior experience with the award or similar awards, results of previous audits, any personnel or system changes at the subrecipient, and the extent and results of federal reviews. Based on the results of the County's risk of noncompliance evaluation, the extent of monitoring can be determined. Monitoring activities include, but are not limited to, reviewing financial and performance reports, ensuring audits are obtained as required, follow-up to ensure appropriate action was taken on deficiencies identified during an audit, issuing management decisions for applicable findings related to the federal award, and ensuring audit findings related to the subaward are resolved. The County did not have any policies or procedures in place to evaluate the subrecipient's risk of noncompliance or to monitor the activity of the subrecipient. Per inquiry of the County, it was determined an evaluation of the risk of noncompliance for the subrecipient was not completed, nor did the subrecipient's files support any such evaluation. In addition, while the subrecipient provided reimbursement requests, the requests did not include sufficient evidence for the County to ascertain if the subrecipient was complying with the grant requirements. The County also did not request or review the subrecipient's audit or monitoring reports to identify any potential noncompliance, determine if management decisions were needed, or if any issues identified were properly resolved. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.332 Requirements for pass-through entities. (Revised Uniform Guidance) states in part: "All pass-through entities must: . . . (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in ? 200.208. (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 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 cross-cutting 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. Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the County did not properly evaluate the subrecipients risk of noncompliance or adequately monitor the subrecipient. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County implement a proper system of internal controls, including segregation of duties, to evaluate the subrecipients risk of noncompliance and adequately monitor the subrecipient. Additionally, policies and procedures should be implemented to ensure appropriate reviews, approvals, and oversight are taking place, as needed, to evaluate and monitor its subrecipient. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Formula Grants for Rural Areas and Tribal Transit Program - Subrecipient Monitoring Federal Agency: Department of Transportation Federal Programs: COVID-19 - Formula Grants for Rural Areas and Tribal Transit Program, Formula Grants for Rural Areas and Tribal Transit Program Assistance Listings Number: 20.509 Federal Award Numbers and Years (or Other Identifying Numbers): EDS#A249-20-G20032, EDS#A249-22-G210088, EDS#A249-22-G210124 Pass-Through Entity: Indiana Department of Transportation Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Condition and Context The County had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, material noncompliance related to the Formula Grants for Rural Areas and Tribal Transit Program funds (Transit program) passed through to a subrecipient. The County received and passed through to a subrecipient $664,071 in Transit program funds. The County is to clearly identify the award and applicable requirements to the subrecipient, evaluate the risk of noncompliance related to the subrecipient to determine appropriate monitoring of the subaward, and monitor the activities of the subrecipient to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. As part of managing the award, the County is to evaluate the subrecipients risk of noncompliance to determine the extent of monitoring. Such factors to consider would include the subrecipients prior experience with the award or similar awards, results of previous audits, any personnel or system changes at the subrecipient, and the extent and results of federal reviews. Based on the results of the County's risk of noncompliance evaluation, the extent of monitoring can be determined. Monitoring activities include, but are not limited to, reviewing financial and performance reports, ensuring audits are obtained as required, follow-up to ensure appropriate action was taken on deficiencies identified during an audit, issuing management decisions for applicable findings related to the federal award, and ensuring audit findings related to the subaward are resolved. The County did not have any policies or procedures in place to evaluate the subrecipient's risk of noncompliance or to monitor the activity of the subrecipient. Per inquiry of the County, it was determined an evaluation of the risk of noncompliance for the subrecipient was not completed, nor did the subrecipient's files support any such evaluation. In addition, while the subrecipient provided reimbursement requests, the requests did not include sufficient evidence for the County to ascertain if the subrecipient was complying with the grant requirements. The County also did not request or review the subrecipient's audit or monitoring reports to identify any potential noncompliance, determine if management decisions were needed, or if any issues identified were properly resolved. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.332 Requirements for pass-through entities. (Revised Uniform Guidance) states in part: "All pass-through entities must: . . . (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in ? 200.208. (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 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 cross-cutting 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. Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the County did not properly evaluate the subrecipients risk of noncompliance or adequately monitor the subrecipient. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County implement a proper system of internal controls, including segregation of duties, to evaluate the subrecipients risk of noncompliance and adequately monitor the subrecipient. Additionally, policies and procedures should be implemented to ensure appropriate reviews, approvals, and oversight are taking place, as needed, to evaluate and monitor its subrecipient. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Assistance Listing Numbers 97.024 Emergency Food and Shelter National Board Program Federal Agency U.S. Department of Homeland Security Pass-through Agency Not Applicable Award Numbers / Years 2022 City Departments Office of Budget and Management Criteria: According to 2 CFR 200.332, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and include specific award identification data as detailed in the Uniform Guidance. Condition/Context: Both of the subaward agreements tested did not contain the assistance listing number, federal award identification number, federal award date, and unique entity identifier in the original agreement. The grant agreement said that information would be forthcoming, however, no additional communications were provided to the subrecipients with this information. Our sample was not statistically valid. Effect: Subrecipients may not receive the appropriate subaward information. Questioned Costs: None noted. Cause: At the time the subawards were awarded to the subrecipeints, the missing award information was not known by the City. Subsequently, there was not a process to ensure the required information was provided once it became available. Recommendation: We recommend that the City provide the subrecipients with the appropriate award identification information. In addition, the City should consider whether a procedure is needed to revisit awards periodically to ensure that all required information has been provided to its subrecipients. Views of Responsible Officials: See Corrective Action Plan.
FINDING 2022-005 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2022 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Condition and Context The County received a total State and Local Fiscal Recovery Funds (SLFRF) allocation of $13,177,707. During the audit period, the County provided subawards of SLFRF funds to other entities. As a pass-through entity, the County must: 1. Identify the award and the applicable requirements to each subrecipient. 2. Evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purpose, complies with the terms and conditions of the subaward, and achieves performance goals. Subawards, totaling $2,503,400, were provided to four different entities. Three of the subrecipient agreements associated with the subawards were selected for testing. For the three agreements tested, the following information was incomplete or missing: 1. The subrecipients unique entity identifier. 2. The federal award identification number (FAIN). 3. The federal award date of award to the recipient by the federal agency. 4. The name of the federal awarding agency, pass-through entity (auditee), and contact information for awarding official of the pass-through entity (auditee). 5. The Assistance Listings Number and Title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at time of disbursement. Furthermore, the County did not have an evaluation of the subrecipients' risk of noncompliance or monitoring activities demonstrating compliance with the subrecipient monitoring requirement. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.331(a) states: "Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. See definition for Subaward in ? 200.1 of this part. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity: (1) Determines who is eligible to receive what Federal assistance; (2) Has its performance measured in relation to whether objectives of a Federal program were met; (3) Has responsibility for programmatic decision-making; (4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and (5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity." 2 CFR 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward . . . (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per ? 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. (iii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with ? 200.405(d). (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward. (b) Evaluate each subrecipient's risk of noncompliance with Federal statues, regulations, and the terms and conditions of the subaward for purposes of determined the appropriate subrecipient monitoring . . . (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. . . ." Cause The system of internal controls as established by management of the County was not properly designed, nor implemented. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. The County was responsible for providing a subaward agreement, with all required elements, and monitoring the non-profit. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls and develop policies and procedures to ensure subrecipients are provided with an adequate subaward agreement and monitored as appropriate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2022-003 Criteria or Specific Requirement: The Code of Federal Regulations Section 200.322(b) states that the pass-through entity must evaluate the subrecipient's risk of noncompliance with Federal statutes and Section 200.332(d) states that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subawards is used for authorized purposes. Condition: During our review of subrecipient monitoring, it was noted that no formal written policy is maintained. Cause: The Organization does not have written policies and procedures to monitor subrecipient's activities in accordance with the Uniform Guidance requirements. Effect or Potential Effect: The deficiency increases the risk that subawards could be spent for purposes other than those outlined in the grant agreements. Context: The Organization provides subawards to grant recipients. Its monitoring procedures consist of approvals over the expenditures but lack the requirements set forth by 2 CFR 200.332. Questioned costs: None noted. Repeat finding: No. Recommendation: We recommend the Organization's subrecipient monitoring policies and procedures be reviewed and updated for compliance with the Uniform Guidance requirements. Additionally, we recommend the Organization review all policies and procedures annually, or more frequently, if necessary, to reflect changes to laws, regulations, personnel, and/or internal procedures. Views of Responsible Officials: Management agrees with the finding and will implement a process to documents its policies and ensure they meet the subrecipient monitoring requirements.
Finding 2022-003 Criteria or Specific Requirement: The Code of Federal Regulations Section 200.322(b) states that the pass-through entity must evaluate the subrecipient's risk of noncompliance with Federal statutes and Section 200.332(d) states that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subawards is used for authorized purposes. Condition: During our review of subrecipient monitoring, it was noted that no formal written policy is maintained. Cause: The Organization does not have written policies and procedures to monitor subrecipient's activities in accordance with the Uniform Guidance requirements. Effect or Potential Effect: The deficiency increases the risk that subawards could be spent for purposes other than those outlined in the grant agreements. Context: The Organization provides subawards to grant recipients. Its monitoring procedures consist of approvals over the expenditures but lack the requirements set forth by 2 CFR 200.332. Questioned costs: None noted. Repeat finding: No. Recommendation: We recommend the Organization's subrecipient monitoring policies and procedures be reviewed and updated for compliance with the Uniform Guidance requirements. Additionally, we recommend the Organization review all policies and procedures annually, or more frequently, if necessary, to reflect changes to laws, regulations, personnel, and/or internal procedures. Views of Responsible Officials: Management agrees with the finding and will implement a process to documents its policies and ensure they meet the subrecipient monitoring requirements.
Finding 2022-003 Criteria or Specific Requirement: The Code of Federal Regulations Section 200.322(b) states that the pass-through entity must evaluate the subrecipient's risk of noncompliance with Federal statutes and Section 200.332(d) states that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subawards is used for authorized purposes. Condition: During our review of subrecipient monitoring, it was noted that no formal written policy is maintained. Cause: The Organization does not have written policies and procedures to monitor subrecipient's activities in accordance with the Uniform Guidance requirements. Effect or Potential Effect: The deficiency increases the risk that subawards could be spent for purposes other than those outlined in the grant agreements. Context: The Organization provides subawards to grant recipients. Its monitoring procedures consist of approvals over the expenditures but lack the requirements set forth by 2 CFR 200.332. Questioned costs: None noted. Repeat finding: No. Recommendation: We recommend the Organization's subrecipient monitoring policies and procedures be reviewed and updated for compliance with the Uniform Guidance requirements. Additionally, we recommend the Organization review all policies and procedures annually, or more frequently, if necessary, to reflect changes to laws, regulations, personnel, and/or internal procedures. Views of Responsible Officials: Management agrees with the finding and will implement a process to documents its policies and ensure they meet the subrecipient monitoring requirements.
Finding 2022-003 Criteria or Specific Requirement: The Code of Federal Regulations Section 200.322(b) states that the pass-through entity must evaluate the subrecipient's risk of noncompliance with Federal statutes and Section 200.332(d) states that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subawards is used for authorized purposes. Condition: During our review of subrecipient monitoring, it was noted that no formal written policy is maintained. Cause: The Organization does not have written policies and procedures to monitor subrecipient's activities in accordance with the Uniform Guidance requirements. Effect or Potential Effect: The deficiency increases the risk that subawards could be spent for purposes other than those outlined in the grant agreements. Context: The Organization provides subawards to grant recipients. Its monitoring procedures consist of approvals over the expenditures but lack the requirements set forth by 2 CFR 200.332. Questioned costs: None noted. Repeat finding: No. Recommendation: We recommend the Organization's subrecipient monitoring policies and procedures be reviewed and updated for compliance with the Uniform Guidance requirements. Additionally, we recommend the Organization review all policies and procedures annually, or more frequently, if necessary, to reflect changes to laws, regulations, personnel, and/or internal procedures. Views of Responsible Officials: Management agrees with the finding and will implement a process to documents its policies and ensure they meet the subrecipient monitoring requirements.
Finding 2022-003 Criteria or Specific Requirement: The Code of Federal Regulations Section 200.322(b) states that the pass-through entity must evaluate the subrecipient's risk of noncompliance with Federal statutes and Section 200.332(d) states that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subawards is used for authorized purposes. Condition: During our review of subrecipient monitoring, it was noted that no formal written policy is maintained. Cause: The Organization does not have written policies and procedures to monitor subrecipient's activities in accordance with the Uniform Guidance requirements. Effect or Potential Effect: The deficiency increases the risk that subawards could be spent for purposes other than those outlined in the grant agreements. Context: The Organization provides subawards to grant recipients. Its monitoring procedures consist of approvals over the expenditures but lack the requirements set forth by 2 CFR 200.332. Questioned costs: None noted. Repeat finding: No. Recommendation: We recommend the Organization's subrecipient monitoring policies and procedures be reviewed and updated for compliance with the Uniform Guidance requirements. Additionally, we recommend the Organization review all policies and procedures annually, or more frequently, if necessary, to reflect changes to laws, regulations, personnel, and/or internal procedures. Views of Responsible Officials: Management agrees with the finding and will implement a process to documents its policies and ensure they meet the subrecipient monitoring requirements.
Finding 2022-003 Criteria or Specific Requirement: The Code of Federal Regulations Section 200.322(b) states that the pass-through entity must evaluate the subrecipient's risk of noncompliance with Federal statutes and Section 200.332(d) states that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subawards is used for authorized purposes. Condition: During our review of subrecipient monitoring, it was noted that no formal written policy is maintained. Cause: The Organization does not have written policies and procedures to monitor subrecipient's activities in accordance with the Uniform Guidance requirements. Effect or Potential Effect: The deficiency increases the risk that subawards could be spent for purposes other than those outlined in the grant agreements. Context: The Organization provides subawards to grant recipients. Its monitoring procedures consist of approvals over the expenditures but lack the requirements set forth by 2 CFR 200.332. Questioned costs: None noted. Repeat finding: No. Recommendation: We recommend the Organization's subrecipient monitoring policies and procedures be reviewed and updated for compliance with the Uniform Guidance requirements. Additionally, we recommend the Organization review all policies and procedures annually, or more frequently, if necessary, to reflect changes to laws, regulations, personnel, and/or internal procedures. Views of Responsible Officials: Management agrees with the finding and will implement a process to documents its policies and ensure they meet the subrecipient monitoring requirements.
2022-002 ? CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS ? NONCOMPLIANCE WITH SUBRECIPIENT GRANT AGREEMENT REQUIREMENTS ? ALN 21.027 ? OTHER NONCOMPLIANCE FINDING TYPE: Other Noncompliance Finding 2022-002 Federal Program: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Federal Award Number(s) and Year(s): SLFRP1964, 2022 Federal Agency: U.S. Department of Treasury Questioned Cost: $0 Condition Burleigh County did not communicate and document all of the elements as outlined in 2 CFR 200.332(a) for the subrecipients of the Coronavirus State and Local Fiscal Recovery Funds program. During testing, we noted the following elements were not included: ? subrecipient's unique entity identifier ? federal award identification number ? federal award date (see definition of Federal award date ? 200.1) of award to the recipient by the Federal agency ? subaward period of performance start and end date ? name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity ? Assistance Listings number and Title ? identification of whether the award is Research and Development ? indirect cost rate for the Federal award (including if the de minimis rate is charged) per ?200.414 ? a requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part, and appropriate terms and conditions concerning closeout of the subaward Effect Burleigh County did not comply with all elements of 2 CFR 200.332(a). Therefore, subrecipients may not have been aware of all necessary grant information and requirements. Cause Burleigh County was not aware of the requirements set forth in 2 CFR 200.332(a) that needed to be included in the grant agreements. Criteria 31 U.S.C 7502(f)(2)(A) states that each pass-through entity shall provide subrecipient the Federal requirements which govern the use of such awards. 2 CFR 200.332(a) states the required information that pass-through entities must disclose. This includes information related to federal award identification and period of performance, approved federally recognized indirect cost rate, requirement that the subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward. Repeat Finding Yes. Recommendation We recommend Burleigh County ensure that all elements as outlined in 2 CFR 200.332(a) are communicated and documented to the subrecipients of the Coronavirus State and Local Fiscal Recovery Funds program. Burleigh County?s Response See Corrective Action Plan
Finding 2022-001 Significant deficiency in internal controls over compliance and instances of noncompliance related to subrecipient monitoring. Federal Agency: Department of the Treasury Program Title: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing: 21.027 Award Number: DA21-2000 Award Period: October 1, 2021 - December 31, 2022 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart D (as codified by the Department of Treasury in CFR OPEN) require a pass-through entity to adopt compliance policies, include certain provisions in subaward agreements, and evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of such agreements for the purposes of determining appropriate subrecipient monitoring. Condition/Context for Evaluation In a population of three subrecipients, the subaward agreements did not include all required provisions outlined in 2 CFR 200.332. Additionally, the Organization?s subrecipient monitoring policy did not include a provision requiring a formal documented risk assessment, and as such no documentation was available showing an assessment of the risk of noncompliance of the subrecipients. Monitoring was performed over all subrecipients as noted in the Organization?s policy. Effect or Potential Effect The Organization did not fully comply with the requirements regarding subaward agreements and evaluating each subrecipients risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring. Questioned Costs Not Applicable Cause Internal controls were not effective in ensuring that the Organization?s subrecipient monitoring policies were in compliance with the Uniform Guidance requirements. Repeat Finding No Recommendation We recommend that the Organization update the subrecipient monitoring policy to ensure subaward agreements include all necessary provisions and documentation of risk assessment is retained. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: According to 2 CFR Part 200, Subpart D, Section 200.332, pass-through entities are required to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and obtaining a copy of the subrecipients? annual audit and taking appropriate action on deficiencies detected through the audits, just to name a few. Lastly, in accordance with 2 CFR Title 2, Subtitle A, Chapter 2, Part 200, Subpart D, 200.303, the non-federal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Condition: The Organization did not verify whether the subject subrecipients received a required annual audit under 2 CFR Part 200. By not verifying and obtaining a copy of the most recent audit of the subrecipients, the Organization was unaware if any enforcement actions against noncompliant subrecipients had occurred. Context: During our testing, it was noted that the Organization did not have any procedures in place to monitor their subrecipients and did not secure the required annual report for any of the subrecipients tested. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: The Organization did not comply with subrecipient monitoring requirements relative to obtaining the annual audit reports and performing the appropriate follow-up procedures (if necessary). By not securing the required annual report of subrecipients, there is a risk that subrecipients could have instances of deficiencies or noncompliance that directly impacts the award, but the Organization is unable to respond accordingly, given it would not be aware of the issues identified. Recommendation: We recommend the Organization implement a comprehensive process (and relevant internal controls) to ensure all elements of 2 CFR Part 200, Subpart D, Section 200.332 are being met, including obtaining a copy of the subject subrecipients? annual audits and taking appropriate action on deficiencies detected through the audits. Tools, such as checklists or electronic workflows, can assist in ensuring all required elements are being met. Repeat Finding: No. Questioned Costs: None Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities clearly identify to each subrecipient significant Federal subaward information, including identifying award numbers, subaward period dates and budget dates, Federal Assistance Listings number and Title, and appropriate terms and conditions concerning closeout of the subaward. Typically this requirement is satisfied by utilizing a subrecipient contract, reflecting all necessary information, and requiring execution showing acknowledgement of the terms by both parties. Condition: Internal controls should be in place to ensure the County is in compliance with all requirements of the federal award program. In place of utilizing a subrecipient contract, the County opted to attach a document of program information to its standard purchase order provided to each subrecipient engaged for the program. This document did not contain all of the information required by CFR ?200.332 to be clearly communicated to all subrecipients. Context/cause: The County did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Testing was performed over each requirement for the County. Out of a total population of sixty (60) subrecipients, six (6) were selected for testing. For three (3) of the six (6) sampled subrecipients, the County did not clearly communicate all required subaward information. Examples of this omitted information include the date of the federal award, the subrecipient?s Unique Entity Identifier (UEI) or DUNS number, program title and assistance listing numbers, and federal award project description. Effect: Noncompliance at the subrecipient level may occur due to the subrecipient being unaware of all requirements. Questioned Costs: None. Recommendation: We recommend the County enhances internal controls to ensure compliance with subrecipient monitoring requirements.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that pass-through entities clearly identify to each subrecipient significant Federal subaward information, including identifying award numbers, subaward period dates and budget dates, Federal Assistance Listings number and Title, and appropriate terms and conditions concerning closeout of the subaward. Typically this requirement is satisfied by utilizing a subrecipient contract, reflecting all necessary information, and requiring execution showing acknowledgement of the terms by both parties. Condition: Internal controls should be in place to ensure the County is in compliance with all requirements of the federal award program. In place of utilizing a subrecipient contract, the County opted to attach a document of program information to its standard purchase order provided to each subrecipient engaged for the program. This document did not contain all of the information required by CFR ?200.332 to be clearly communicated to all subrecipients. Context/cause: The County did not have adequate internal controls to ensure compliance with subrecipient monitoring requirements. Testing was performed over each requirement for the County. Out of a total population of sixty (60) subrecipients, six (6) were selected for testing. For three (3) of the six (6) sampled subrecipients, the County did not clearly communicate all required subaward information. Examples of this omitted information include the date of the federal award, the subrecipient?s Unique Entity Identifier (UEI) or DUNS number, program title and assistance listing numbers, and federal award project description. Effect: Noncompliance at the subrecipient level may occur due to the subrecipient being unaware of all requirements. Questioned Costs: None. Recommendation: We recommend the County enhances internal controls to ensure compliance with subrecipient monitoring requirements.
2022-001 ? Subrecipient Monitoring Cluster: Research and Development Agency: Department of Commerce and Department of Health and Human Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing and Development and Testing a Field-based Hazard/Near-Miss Sharing System for Commercial Fishing Vessels Award Numbers: 70NANB21H038 and U01OH012288 Assistance Listing Title: Measurement and Engineering Research and Standards and Occupational Safety and Health Program Assistance Listing Number: 11.609 and 93.262 Award Year: FY 2022 Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition Through our testing of 4 subrecipients out of a population of 10, we were able to obtain a documented initial risk assessment for each subrecipient selected and other evidence of monitoring such as meetings with the subrecipients. However, we were unable to obtain evidence that the Company obtained and reviewed the annual Uniform Guidance report or annual audited financial statements (if the entity was not subject to a Uniform Guidance audit) for each subrecipient selected for testing. Cause The Company performed an initial risk assessment but did not understand that obtaining the Uniform Guidance reports or financial statements needed to be completed annually as part of their subrecipient monitoring procedures. Effect The lack of an annual review of subrecipient audits may result in ineligible subrecipients receiving federal awards, subrecipient findings not being fully remediated and other monitoring procedures (based on risk level) not being performed. Questioned Costs None noted. Recommendation We recommend the Company implement a policy to review Uniform Guidance reports (or audited financial statements to the extent Uniform Guidance reports are not available) on an annual basis. When reviewing the reports, they should understand the type of opinion(s) expressed and whether there were any findings associated with their awards, document their review and assess whether there is any change in the risk assessment and subsequent monitoring needed of each subrecipient. Management? Views and Corrective Action Plan Management?s Views and Corrective Action Plan are included at the end of this report.
2022-001 ? Subrecipient Monitoring Cluster: Research and Development Agency: Department of Commerce and Department of Health and Human Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing and Development and Testing a Field-based Hazard/Near-Miss Sharing System for Commercial Fishing Vessels Award Numbers: 70NANB21H038 and U01OH012288 Assistance Listing Title: Measurement and Engineering Research and Standards and Occupational Safety and Health Program Assistance Listing Number: 11.609 and 93.262 Award Year: FY 2022 Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition Through our testing of 4 subrecipients out of a population of 10, we were able to obtain a documented initial risk assessment for each subrecipient selected and other evidence of monitoring such as meetings with the subrecipients. However, we were unable to obtain evidence that the Company obtained and reviewed the annual Uniform Guidance report or annual audited financial statements (if the entity was not subject to a Uniform Guidance audit) for each subrecipient selected for testing. Cause The Company performed an initial risk assessment but did not understand that obtaining the Uniform Guidance reports or financial statements needed to be completed annually as part of their subrecipient monitoring procedures. Effect The lack of an annual review of subrecipient audits may result in ineligible subrecipients receiving federal awards, subrecipient findings not being fully remediated and other monitoring procedures (based on risk level) not being performed. Questioned Costs None noted. Recommendation We recommend the Company implement a policy to review Uniform Guidance reports (or audited financial statements to the extent Uniform Guidance reports are not available) on an annual basis. When reviewing the reports, they should understand the type of opinion(s) expressed and whether there were any findings associated with their awards, document their review and assess whether there is any change in the risk assessment and subsequent monitoring needed of each subrecipient. Management? Views and Corrective Action Plan Management?s Views and Corrective Action Plan are included at the end of this report.
Repeat of Prior Audit Finding 2021-005 Federal Program: Trans-National Crime Federal Agencies: United States Department of State- United States Bureau of International Narcotics and Law Enforcement Affairs Federal Assistance Listing Number: 19.705 Federal Award Year: December 31, 2022 Criteria: 2 CFR Part 200, Subpart D Section 200.332 of the Uniform Guidance require all non-Federal entities to assess subrecipients' risk, as well as monitor sub-awards passed through. All requirements imposed by the pass-through entity on the subrecipient are to ensure that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. Condition/Context: For the selection of 2 subrecipients, we were unable to verify that the respective subaward agreements contained accurate award information, such as the identification of the funding being U.S. federal funds, the federal Assistance Listing Number and the requirements that the subrecipients would need to comply with the Uniform Guidance. In addition, for 2 other subrecipients, we could not determine the quarterly programmatic and financial reports were reviewed or approved by Panthera Corporation as there was no evidence of formal review and approval. There was also no evidence that those subrecipients had been audited or monitored under appropriate local government regulations. This was not a statistically valid sample. Questioned Costs: Not determinable Cause: Panthera Corporation's procedures did not ensure the required written subrecipient monitoring policies were implemented in accordance with the Uniform Guidance. Effect: Panthera Corporation's control design and operation does not provide reasonable assurance that Panthera Corporation is managing the subrecipient monitoring requirements of the Uniform Guidance. Recommendation: We recommend that Panthera Corporation clearly identify in each agreement with subrecipients the reference to the applicable federal Assistance Listing Number and request audited reports from subrecipients when applicable. We further recommend that Panthera Corporation follow its policies and procedures by ensuring that subrecipient quarterly reports are subject to the appropriate process as well as maintaining documentation to allow for an audit trail. View of Responsible Officials: Management acknowledges the finding and will be retaining support and updating subrecipient agreements to include the relevant award information and the Uniform Guidance compliance requirements for subrecipients.
Please see table on page 16 of the Single Audit.Finding 2022-001 ? Subrecipient Monitoring Condition: The County did not have a documented risk assessment process for evaluating subrecipient?s risk of non-compliance. Additionally, as part of the monitoring process, the County did not have controls in place to obtain and review the annual audit reports of all subrecipients in a timely manner with documentation of such review. Criteria: The Pennsylvania Department of Human Services (PA DHS) and 2 CFR section 200.332(b) requires pass-through entities to evaluate subrecipient risks of noncompliance as part of their subrecipient monitoring procedures. In addition, 2 CFR section 200.332(d) indicates as part of the monitoring process, the pass-through entity should ensure subrecipients take follow-up action on audit deficiencies, which would be identified as part of the review of the annual audit reports of subrecipients. Cause: There were no procedures in place to document the County?s assessment of risk for subrecipients. In addition, the County does not have procedures in place to adequately review the subrecipient audits received. Effect: The deficiencies in subrecipient monitoring could result in the County not identifying unallowable expenses being incurred by County subrecipients. Repeat Finding: This is not a repeat finding. Recommendation: We recommend implementation of procedures to formally document and complete a risk assessment of subrecipients. Based on the risk assessment performed, the County should develop monitoring procedures to address the risks noted, which should include a documented review of subrecipient audits and deficiencies be followed up on, if applicable. Questioned Costs: Unknown Views of Responsible Official and Planned Corrective Action: Management agrees with the finding. See separate correction action plan.
2022 ? 003 Federal Agency: Department of Health and Human Services Federal Program Name: Immunization Research, Demonstration, Public Information and Education, Training and Clinical Skills Improvement Projects Assistance Listing Number: 93.185 Pass-Through Agency: Michigan State University Award Period: July 31, 2021 ? July 30, 2023 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Other Matters Criteria or specific requirement: 2 CFR 200.332(f) requires that the pass through entity verify that subrecipients expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement. This verification may be performed as part of the required monitoring under 2 CFR section 200.332(d)(2) to ensure that the subrecipient takes timely and appropriate action on deficiencies detected though audits. Condition: Annual audit reports of subrecipients were not obtained or reviewed by the Foundation. Questioned costs: None Context: Three of the five subrecipients tested were required to have an annual audit report, but these were not obtained or reviewed by the Foundation. Cause: Management was not aware of this requirement. Effect: The subrecipient may have deficiencies detected though audits that could impact monitoring by the Foundation. Recommendation: We recommend the Foundation attend training, review federal requirements, and fully understand the requirements of subrecipient monitoring. Views of responsible officials: There is no disagreement with the audit finding. See the Corrective Action Plan for further details.
Criteria: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and other means. Condition/Context: For five of the five providers monitored during the program?s fiscal year, the County Child and Youth Services department?s results and findings were communicated to the providers at the conclusion of the review procedures, however providers did not submit a written corrective action plan. Cause: Providers on-site monitoring was completed and the results were communicated to the providers in writing. Notice that a corrective action plan was needed in response was not given to the providers. Effect: Lack of written corrective action plan limits the County Child and Youth Services department?s ability to monitor that the providers takes timely and appropriate action to address deficiencies pertaining to the federal award. Questioned Costs: There are no questioned costs associated with this finding. This is not a statistically valid sample. Recommendation: Providers that receive findings as a result of their on-site monitoring should submit a corrective action plan to the County. Views of Responsible Officials and Planned Corrective Actions: The County Child and Youth Services department will require a corrective action plan for all subrecipients with findings as a result of their on-site monitoring in 2023, and thereafter, that will include the entity?s plan to correct the errors noted, individual responsible and timeline for corrections to be implemented.
Criteria: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and other means. Condition/Context: For five of the five providers monitored during the program?s fiscal year, the County Child and Youth Services department?s results and findings were communicated to the providers at the conclusion of the review procedures, however providers did not submit a written corrective action plan. Cause: Providers on-site monitoring was completed and the results were communicated to the providers in writing. Notice that a corrective action plan was needed in response was not given to the providers. Effect: Lack of written corrective action plan limits the County Child and Youth Services department?s ability to monitor that the providers takes timely and appropriate action to address deficiencies pertaining to the federal award. Questioned Costs: There are no questioned costs associated with this finding. This is not a statistically valid sample. Recommendation: Providers that receive findings as a result of their on-site monitoring should submit a corrective action plan to the County. Views of Responsible Officials and Planned Corrective Actions: The County Child and Youth Services department will require a corrective action plan for all subrecipients with findings as a result of their on-site monitoring in 2023, and thereafter, that will include the entity?s plan to correct the errors noted, individual responsible and timeline for corrections to be implemented.
Criteria or Specific Requirements: Using the guidance in 2 CFR section 200.331, non-Federal entities passing federal awards through to other entities are required to perform a determination as to whether the other entities are considered to be subrecipients or contractors. Under 2 CFR 200.332, pass-through entities are required to ensure that subawards to subrecipients include required federal award identification and detail of all compliance and other requirements for the federal award. In addition, the subrecipients to ensure that the subaward is used for authorized purposes, that compliance requirements are met, and that the subrecipient takes timely and appropriate action on any deficiencies relating to the Federal award provided. Condition: During testing over subrecipients monitoring and reporting, we noted the County did not have effective control over subrecipient monitoring and reporting. Questioned costs: None. Context: For 5 of 5 subrecipients selected, the County did not have agreements with the subrecipients that included the required federal award information and did not have a process in place to monitor these subrecipients. Prior to 2022, the County determined that certain entities receiving payment under TANF were contractors. In March of 2023, the County performed a revised analysis using the guidance in 2 CFR 200.331 with the conclusion that certain entities that were previously determined to be contractors should have been considered subrecipients. After this revised determination was made, the County did not provide revised subaward agreements or perform subrecipients monitoring procedures. Cause: The County initially improperly determined TANF subrecipients as contractors prior to 2022 and did not follow up timely after a revised determination was completed in 2023. The County did not have a process in place to properly assess if organizations met the criteria to be considered subrecipients. Effect: If the County does not provide required subaward information on a timely basis, it increases the risk that subrecipients will not be in compliance with all required federal award requirements. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County determine whether an entity receiving payment under TANF is a subrecipient or a contractor prior to entering into an agreement with the entity and to include all guidance under 2 CFR 200.331 when making this determination. Views of responsible officials: There is no disagreement with the audit findings.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that 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, federal award identification, subrecipient name, subrecipient?s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient?s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient?s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County?s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. A subrecipient was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. Two of the five subrecipients were missing an internal checklist that is signed by the County Manager. One of the five subrecipients was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: No. Recommendation: We recommend that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that 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, federal award identification, subrecipient name, subrecipient?s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient?s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient?s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County?s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. A subrecipient was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. Two of the five subrecipients were missing an internal checklist that is signed by the County Manager. One of the five subrecipients was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: No. Recommendation: We recommend that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.331(a) states that 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, federal award identification, subrecipient name, subrecipient?s DUNS number, federal award identification number (FAIN), federal award date, subaward start and end date, amount of federal funds obligated, total amount of federal award, federal award project description, name of federal awarding agency, Assistance Listing (CFDA) number and name, identification of whether the award is R&D and indirect cost rate for federal award. Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal control should include procedures to ensure required information is communicated prior to the issuance of the subaward. Per 2 CFR 200.331(a)(1), pass-through entities must evaluate each subrecipient?s risk of noncompliance to determine the appropriate level of monitoring of the subrecipient. Per 2 CFR 200.332(d) through (f), pass-through entities must monitor the activities of the subrecipient, which includes reviewing financial reports required by the pass-through entity. Condition: During our testing, we noted subrecipients tested had required information omitted from the sub agreements to the subrecipients including Assistance Listing (CFDA) title and number, subrecipient?s DUNS number, Federal Award Identification Number (FAIN), identification of whether the award is research and development, and indirect cost rate for federal award. Subrecipients tested did not have evidence of the County?s evaluation of the risk of noncompliance by the subrecipients, nor was there evidence of monitoring of annual audits for the subrecipients. Internal checklists that aid in compliance were missing for certain subrecipients. A subrecipient was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Questioned costs: None. Context: Five out of the five subrecipients did not include required information in subaward agreements issued to subrecipients and lacked evidence of both the evaluation of risk of noncompliance of the subrecipient and monitoring of annual audits for the subrecipients. Two of the five subrecipients were missing an internal checklist that is signed by the County Manager. One of the five subrecipients was provided the funding at the beginning of the grant award period and no required quarterly reports were submitted to the County subsequent to funding. Cause: Lack of sufficient controls in place to ensure that subrecipient agreements contain all required information and are monitored appropriately. Effect: Failure to communicate required information and to adequately monitor the subrecipients could result in subrecipients not properly administering the federal programs in accordance with federal regulations. Repeat Finding: No. Recommendation: We recommend that the County review its procedures for communicating information to subrecipients and implement the procedures necessary to ensure information is included in the subrecipient award documents at time of funding and that appropriate monitoring is performed for each subrecipient. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-001 ? M. Subrecipient Monitoring Identification of the Federal Program: Grantor: Department of Health and Human Services Program Name: Research and Development Cluster Assistance Listing No. / FAIN: 93.847 / R24DK106743 Criteria or Specific Requirement: M. Subrecipient Monitoring ? A pass-through entity must evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). Condition: Management should establish and implement a policy which addresses the requirement identified above, including evaluating the results of previous audits obtained by its subrecipients including whether or not the subrecipient receives a single audit in accordance with 2 CFR part 200, subpart F, and the extent to which the same or similar subaward has been audited as a major program. Cause: Management implemented updated policies related to subrecipient monitoring during 2022; however, such policies were not in effect for the full calendar year. Effect or Potential Effect: The lack of an effective control over subrecipient monitoring resulted in instances of noncompliance identified. Questioned Costs: Not applicable. Context: In a sample of two subrecipients within the Research and Development Cluster, two instances of noncompliance were identified where it could not be ascertained that the Institute verified that subrecipients have been audited as required by 2 CFR part 200, subpart F, as Institute management did not evaluate the subrecipients? compliance. Identification as a repeat finding: This finding was reported as finding 2021-001 in the prior year. Recommendation: Management has implemented a policy over subrecipient monitoring during 2022. Management should therefore perform an annual review of Uniform Guidance grant compliance audit reports of subrecipients on an annual basis to identify and evaluate the subrecipients? risk of noncompliance for purposes of determining the appropriate subrecipient monitoring. Views of Responsible Officials: Management concurs with this audit finding. During 2022, management implemented an annual review control whereby the reports will be reviewed to ensure compliance with federal agency requirements.
FINDING 2022-003 Program Information: COVID-19 Governor?s Emergency Education Relief Fund (84.425C) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Federal Compliance Requirement: M. Subrecipient Monitoring - The pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). The State of Georgia stipulates GEER II Funds may not be used for administrative or executive salaries or benefits, or for any purpose not permitted under Section 312 of the CRRSAA. Condition: The Organization did not have sufficient monitoring processes in place to detect unallowable personnel costs charged to the GEER grant. The Organization did not maintain sufficient audit evidence for subrecipient payroll charges under the grant. Cause: Lack of administrative oversight with respect to subrecipient monitoring requirements. Effect or Potential Effect: The Organization was not in compliance with subrecipient monitoring requirements. Questioned Costs: $48,121 Context: We noted the following exceptions: For 11 of 51 monthly invoices selected for testing, the Organization did not properly identify unallowable personnel costs charged to the grant. For 17 of 51 monthly invoices selected for testing, the Organization did not properly verify hours charged to the grant by club employees. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its policies and procedures over subrecipient monitoring to properly detect and prevent unallowable charges to the grant as well as maintain sufficient audit evidence for all grant expenditures. Views of Responsible Officials and Planned Corrective Actions: Management will update subrecipient monitoring procedures to ensure compliance with subrecipient monitoring requirements and will continue to follow these enhanced policies to properly detect and prevent unallowable charges to the grant. Management will implement monitoring processes to ensure subrecipients submit sufficient documentation prior to disbursing funds.
Criteria: Under the Uniform Guidance, pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes specific information identifying the federal award at the time of the subaward (2 CFR 200.332(a)). Additionally, entities receiving federal awards must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the awards in compliance with federal statutes, regulations, and the terms and conditions of the awards (2 CFR 200.303(a)). Condition: Subaward agreements did not include certain required information such as the name and assistance listing number of the original federal award. Questioned Costs: Unknown Cause: Staff members at Seattle Good Business Network were not aware of the requirements for amounts passed through to subrecipients. Context: Seattle Good Business Network has not previously received significant federal awards and did not have adequate internal controls established to ensure all required communications were made to subrecipients. Effect: Failure to notify subrecipients of federal award information may result in subrecipients not properly administering the Coronavirus State and Local Fiscal Recovery Funds program in accordance with statutes, regulations, and the terms and conditions of the award. Recommendation: We recommend that Seattle Good Business Network updates its standard subaward agreements to include all required federal award information and implements policies and procedures to ensure staff are informed of all federal award compliance requirements. Views of Responsible Officials: There is no disagreement with the finding. See the attached unaudited corrective action plan.
Finding 2022-004: Internal Controls over Compliance and Other Matters M. Subrecipient Monitoring U.S. DEPARTMENT OF JUSTICE Children Exposed to Violence ? Assistance Listing No. 16.818 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES COVID-19 ? Community Services Block Grant? Assistance Listing No. 93.569 Criteria: The Uniform Guidance requires program participants who are pass-through entities 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 (2 CFR sections 200.331(d) through (f)). All pass-through entities must also ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following specific required information: federal award identification information, all requirements imposed by the pass-through entity, any additional requirements to meet the pass-through entity?s responsibilities, information on the indirect cost rate, requirements to permit access to subrecipients? records and statements, and appropriate closeout terms and conditions (2 CFR section 200.332). Condition: The U.S. Department of Justice?s (DOJ) EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) noted compliance issues over Youthprise?s subrecipient monitoring. Deficiencies included the budget, risk assessments, determination of suitability, lobbying forms, and missing documentation as it related to its subrecipient grants. A formal letter was issued to Youthprise dated November 8, 2022, detailing the compliance issues noted. In addition, the subgrant agreements awarded for the COVID-19 ? Community Services Block Grant program did not include the required information per 2 CFR section 200.332. Cause: Internal controls were not in place to ensure Youthprise followed the subrecipient monitoring requirements outlined in 2 CFR section 200.331 and 200.332. Effect: The conditions noted above resulted in noncompliance over subrecipient monitoring by Youthprise. Context: The DOJ completed a EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) during 2022. The DOJ outlined specific recommendations in its EPDR letter dated November 22, 2022 to address the conditions noted above and requested resolution to the conditions noted in its EPDR within 20 calendar days. DOJ completed a follow-up site visit at Youthprise on July 10, 2023 and determined all compliance issues to have been adequately resolved. The original agreement from Community Action Partnership of Hennepin County for the COVID-19 ? Community Services Block Grant program did not specify that Youthprise was considered a subrecipient of these federal funds, nor did it contain the required information under 2 CFR section 200.332. Youthprise originally considered themselves a contractor under the agreement and therefore the required subaward information per 2 CFR section 200.332 was not included in the subgrant agreements. Subsequently, it was verified with the pass-through entity that Youthprise is considered a subrecipient for this program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Youthprise review procedures to ensure adequate subrecipient monitoring is being performed over all subrecipient agreements, that meet the requirements of 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in Youthprise?s Corrective Action Plan.
Finding 2022-004: Internal Controls over Compliance and Other Matters M. Subrecipient Monitoring U.S. DEPARTMENT OF JUSTICE Children Exposed to Violence ? Assistance Listing No. 16.818 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES COVID-19 ? Community Services Block Grant? Assistance Listing No. 93.569 Criteria: The Uniform Guidance requires program participants who are pass-through entities 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 (2 CFR sections 200.331(d) through (f)). All pass-through entities must also ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following specific required information: federal award identification information, all requirements imposed by the pass-through entity, any additional requirements to meet the pass-through entity?s responsibilities, information on the indirect cost rate, requirements to permit access to subrecipients? records and statements, and appropriate closeout terms and conditions (2 CFR section 200.332). Condition: The U.S. Department of Justice?s (DOJ) EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) noted compliance issues over Youthprise?s subrecipient monitoring. Deficiencies included the budget, risk assessments, determination of suitability, lobbying forms, and missing documentation as it related to its subrecipient grants. A formal letter was issued to Youthprise dated November 8, 2022, detailing the compliance issues noted. In addition, the subgrant agreements awarded for the COVID-19 ? Community Services Block Grant program did not include the required information per 2 CFR section 200.332. Cause: Internal controls were not in place to ensure Youthprise followed the subrecipient monitoring requirements outlined in 2 CFR section 200.331 and 200.332. Effect: The conditions noted above resulted in noncompliance over subrecipient monitoring by Youthprise. Context: The DOJ completed a EDPR of Youthprise?s Children Exposed to Violence Program (re. 2020-CV-FX-K007) during 2022. The DOJ outlined specific recommendations in its EPDR letter dated November 22, 2022 to address the conditions noted above and requested resolution to the conditions noted in its EPDR within 20 calendar days. DOJ completed a follow-up site visit at Youthprise on July 10, 2023 and determined all compliance issues to have been adequately resolved. The original agreement from Community Action Partnership of Hennepin County for the COVID-19 ? Community Services Block Grant program did not specify that Youthprise was considered a subrecipient of these federal funds, nor did it contain the required information under 2 CFR section 200.332. Youthprise originally considered themselves a contractor under the agreement and therefore the required subaward information per 2 CFR section 200.332 was not included in the subgrant agreements. Subsequently, it was verified with the pass-through entity that Youthprise is considered a subrecipient for this program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Youthprise review procedures to ensure adequate subrecipient monitoring is being performed over all subrecipient agreements, that meet the requirements of 2 CFR 200.331 and 2 CFR 200.332. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in Youthprise?s Corrective Action Plan.
Finding 2022-002 ? Subrecipient Monitoring Department of Health and Human Services Passed through Pennsylvania Department of Human Services Foster Care ? Title IV-E ? ALN 93.658 Subrecipient Monitoring Condition: The County appropriately notified the subrecipients of the federal award identification and performed a risk assessment; however, the County did not monitor ten of the twelve subrecipients during the year to ensure compliance with federal statutes, regulations, and the terms and conditions of the subaward. Criteria: The Pennsylvania Department of Human Services (PA DHS) and 2 CFR section 200.332 require pass-through entities to ensure that the award is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward regarding federal award identification, all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes and the terms and conditions of the federal award, any additional requirements that the pass-through entity imposes on the subrecipient, and a requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient?s records and financial statements as necessary. Additionally, the pass-through entity is required to evaluate each subrecipient?s risk of noncompliance, monitoring 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 verify that every subrecipient is audited as required by Subpart F, as necessary. It is the County?s policy, as part of the monitoring process, that each subrecipient of these federal awards be monitored annually. Cause: The County has established formal subrecipient monitoring policies. However, due to staffing issues, the County?s internal control process over subrecipient monitoring was not effective. Effect: A failure to monitor subrecipients? compliance with relevant federal requirements could result in noncompliance with the terms and conditions of the subawards. Questioned Costs: Unknown. Identification as a Repeat Finding: This is not a repeat finding from the prior audit. Recommendation: We recommend that the County ensure adherence to the monitoring policy related to subrecipients and that these subrecipients be monitored on an annual basis in accordance with the policy. Management?s Response: Management agrees with this finding. See separate Corrective Action Plan.
Finding 2022-002 ? Subrecipient Monitoring Department of Health and Human Services Passed through Pennsylvania Department of Human Services Foster Care ? Title IV-E ? ALN 93.658 Subrecipient Monitoring Condition: The County appropriately notified the subrecipients of the federal award identification and performed a risk assessment; however, the County did not monitor ten of the twelve subrecipients during the year to ensure compliance with federal statutes, regulations, and the terms and conditions of the subaward. Criteria: The Pennsylvania Department of Human Services (PA DHS) and 2 CFR section 200.332 require pass-through entities to ensure that the award is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward regarding federal award identification, all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes and the terms and conditions of the federal award, any additional requirements that the pass-through entity imposes on the subrecipient, and a requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient?s records and financial statements as necessary. Additionally, the pass-through entity is required to evaluate each subrecipient?s risk of noncompliance, monitoring 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 verify that every subrecipient is audited as required by Subpart F, as necessary. It is the County?s policy, as part of the monitoring process, that each subrecipient of these federal awards be monitored annually. Cause: The County has established formal subrecipient monitoring policies. However, due to staffing issues, the County?s internal control process over subrecipient monitoring was not effective. Effect: A failure to monitor subrecipients? compliance with relevant federal requirements could result in noncompliance with the terms and conditions of the subawards. Questioned Costs: Unknown. Identification as a Repeat Finding: This is not a repeat finding from the prior audit. Recommendation: We recommend that the County ensure adherence to the monitoring policy related to subrecipients and that these subrecipients be monitored on an annual basis in accordance with the policy. Management?s Response: Management agrees with this finding. See separate Corrective Action Plan.
Finding 2022-002 ? Subrecipient Monitoring Department of Health and Human Services Passed through Pennsylvania Department of Human Services Foster Care ? Title IV-E ? ALN 93.658 Subrecipient Monitoring Condition: The County appropriately notified the subrecipients of the federal award identification and performed a risk assessment; however, the County did not monitor ten of the twelve subrecipients during the year to ensure compliance with federal statutes, regulations, and the terms and conditions of the subaward. Criteria: The Pennsylvania Department of Human Services (PA DHS) and 2 CFR section 200.332 require pass-through entities to ensure that the award is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward regarding federal award identification, all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes and the terms and conditions of the federal award, any additional requirements that the pass-through entity imposes on the subrecipient, and a requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient?s records and financial statements as necessary. Additionally, the pass-through entity is required to evaluate each subrecipient?s risk of noncompliance, monitoring 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 verify that every subrecipient is audited as required by Subpart F, as necessary. It is the County?s policy, as part of the monitoring process, that each subrecipient of these federal awards be monitored annually. Cause: The County has established formal subrecipient monitoring policies. However, due to staffing issues, the County?s internal control process over subrecipient monitoring was not effective. Effect: A failure to monitor subrecipients? compliance with relevant federal requirements could result in noncompliance with the terms and conditions of the subawards. Questioned Costs: Unknown. Identification as a Repeat Finding: This is not a repeat finding from the prior audit. Recommendation: We recommend that the County ensure adherence to the monitoring policy related to subrecipients and that these subrecipients be monitored on an annual basis in accordance with the policy. Management?s Response: Management agrees with this finding. See separate Corrective Action Plan.
Criteria: 2 CFR section 200.332(d) states: 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 Section 200-521. Condition: As the HIV Care Formula Grant is a recurring grant, the Organization requires subrecipients to provide their most recent financial statement and Uniform Guidance audits annually when reapplying for grant funds. For one of three subrecipients tested, the subrecipient provided their 2021 Federal Form 990 when applying for 2022 funding and told the Organization they did not have a financial statement or Uniform Guidance audits. The federal assistance provided by the Organization to the subrecipient was less than $750,000, so this response was consistent with the Organization?s expectation for the subrecipient. However, per our review of the Federal Form 990, the subrecipient disclosed that it was required to undergo an audit under the Single Audit Act and that the audit had not been completed. The Organization did not notice this in the Federal Form 990 and did not follow-up on the delayed audit. The Organization performed quarterly fiscal audits of the subrecipient?s expenses and site visits with no compliance issues identified. Although the Organization was not aware of the financial statement and Uniform Guidance audit requirements and the untimely status of those audits, other effective monitoring procedures were completed. Cause: The Organization was not aware of the subrecipient?s other federal assistance resulting in the subrecipient having a financial statement and uniform guidance audit requirement. Effect or potential effect: Procedures required by 2 CFR section 200.332(d) related to reviewing financial reports of the subrecipient and following-up on deficiencies pertaining to the Federal award could not completed. The Uniform Guidance audit could have noted findings related to compliance with the spending of the federal assistance that would have been unknown to the Organization. Recommendation: We recommend that the Organization require the subrecipient to provide a complete list of all their federal assistance when signing grant agreements. Based on that information received, we recommend that the Organization track all subrecipient with federal assistance over $750,000 and establish a process to ensure the financial statement and Uniform Guidance audits are obtained timely and monitoring procedures required by 2 CFR section 200.332(d) are completed. Views of responsible officials: Management acknowledges this finding and will address remediation in the accompanying corrective action plan in Appendix A.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. reviewing financial and programmatic (performance and special reports) required by the PTE; 2. following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means; 3. issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions ? Our examination of the program?s subrecipient monitoring requirements includes the review and approval of financial and performance reports by the program managers. The financial reports are prepared by APS? grants administrator and submitted to the program managers whilst the performance reports and information are submitted by the subrecipients directly to the program managers. Of the program?s nineteen (19) subrecipients, we examined fifteen (15) subrecipients and observed that there was no consistent evidentiary documentation to support the monitoring oversight process performed by the respective program managers. However, we noted that APS did perform the required monitoring procedures and oversight of the subrecipients? financial and programmatic activities based on our review of program reports submitted to NSF, e-mail communication and minutes of meetings held during the year. We selected four (4) subrecipients and noted that for all the subrecipients selected, APS was unable to provide consistent evidentiary documentation to show that it had reviewed the subrecipients? single audit reports during the year. A subsequent review of the subrecipients? audit reports was performed and no reported deficiencies relating to APS? subawards was noted. We also tested a sample of two subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds and three grant amendments in the FSRS Reporting System to fulfil the FFATA requirements. Cause ? Management does not have adequate internal controls and policies in place to ensure that the monitoring controls performed over its subrecipients are documented appropriately and in a timely manner. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS? noncompliance with the reporting requirements.Effect or potential effect ? APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. Failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs ? None. Context ? These are conditions identified per review of APS? compliance with specified compliance requirements using a statistically valid sample. Recommendations ? BDO recommends that APS implement policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are consistently documented and maintained. BDO also recommends that APS establish policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. reviewing financial and programmatic (performance and special reports) required by the PTE; 2. following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means; 3. issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions ? Our examination of the program?s subrecipient monitoring requirements includes the review and approval of financial and performance reports by the program managers. The financial reports are prepared by APS? grants administrator and submitted to the program managers whilst the performance reports and information are submitted by the subrecipients directly to the program managers. Of the program?s nineteen (19) subrecipients, we examined fifteen (15) subrecipients and observed that there was no consistent evidentiary documentation to support the monitoring oversight process performed by the respective program managers. However, we noted that APS did perform the required monitoring procedures and oversight of the subrecipients? financial and programmatic activities based on our review of program reports submitted to NSF, e-mail communication and minutes of meetings held during the year. We selected four (4) subrecipients and noted that for all the subrecipients selected, APS was unable to provide consistent evidentiary documentation to show that it had reviewed the subrecipients? single audit reports during the year. A subsequent review of the subrecipients? audit reports was performed and no reported deficiencies relating to APS? subawards was noted. We also tested a sample of two subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds and three grant amendments in the FSRS Reporting System to fulfil the FFATA requirements. Cause ? Management does not have adequate internal controls and policies in place to ensure that the monitoring controls performed over its subrecipients are documented appropriately and in a timely manner. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS? noncompliance with the reporting requirements.Effect or potential effect ? APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. Failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs ? None. Context ? These are conditions identified per review of APS? compliance with specified compliance requirements using a statistically valid sample. Recommendations ? BDO recommends that APS implement policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are consistently documented and maintained. BDO also recommends that APS establish policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331, a pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. reviewing financial and programmatic (performance and special reports) required by the PTE; 2. following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means; 3. issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Furthermore, under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). If a subaward/subcontract was subject to reporting under the Transparency Act, the action was required to be reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Conditions ? Our examination of the program?s subrecipient monitoring requirements includes the review and approval of financial and performance reports by the program managers. The financial reports are prepared by APS? grants administrator and submitted to the program managers whilst the performance reports and information are submitted by the subrecipients directly to the program managers. Of the program?s nineteen (19) subrecipients, we examined fifteen (15) subrecipients and observed that there was no consistent evidentiary documentation to support the monitoring oversight process performed by the respective program managers. However, we noted that APS did perform the required monitoring procedures and oversight of the subrecipients? financial and programmatic activities based on our review of program reports submitted to NSF, e-mail communication and minutes of meetings held during the year. We selected four (4) subrecipients and noted that for all the subrecipients selected, APS was unable to provide consistent evidentiary documentation to show that it had reviewed the subrecipients? single audit reports during the year. A subsequent review of the subrecipients? audit reports was performed and no reported deficiencies relating to APS? subawards was noted. We also tested a sample of two subrecipients and our examination of the monitoring and reporting requirements revealed that APS did not report the information on a subaward of $30,000 or more in federal funds and three grant amendments in the FSRS Reporting System to fulfil the FFATA requirements. Cause ? Management does not have adequate internal controls and policies in place to ensure that the monitoring controls performed over its subrecipients are documented appropriately and in a timely manner. There is also a lack of established monitoring and internal control procedures in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS Reporting System resulted in APS? noncompliance with the reporting requirements.Effect or potential effect ? APS is not in compliance with the subrecipient monitoring requirements as it did not maintain consistent documented evidence of its monitoring of subrecipients. Failure to comply with the reporting requirements of the Uniform Guidance could result in the awarding agency taking action such as reducing future funding. Questioned Costs ? None. Context ? These are conditions identified per review of APS? compliance with specified compliance requirements using a statistically valid sample. Recommendations ? BDO recommends that APS implement policies, procedures and controls that will ensure that all requisite reports are reviewed, and evidence of review are consistently documented and maintained. BDO also recommends that APS establish policies and procedure over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
FINDING 2022-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number or Year (or Other Identifying Number): CY2021 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Condition and Context The City received a total State and Local Fiscal Recovery Funds (SLFRF) allocation of $18,042,360. The City enlisted a non-profit, Heart City Health Center, Inc., to assist with public health information and paid them $50,000. The payment was made under the Responding to Public Health and Economic Impacts of COVID-19 eligible use category. Documentation to support the payment included an invoice from the Heart City Health Center, Inc., Board of Works Resolution 21-R-19, and Ordinance 5861. The Board of Works approved Resolution 21-R-19 on December 28, 2021. The resolution states in part, "Heart City Health Center is a separate legal entity from the City of Elkhart and as a separate legal entity, requires the formation of a subrecipient agreement to transfer funds from the City's ARPA Coronavirus State and Local Fiscal Recovery Funds allocation to Heart City Health . . . now, therefore be it resolved, the Board of Public Works approves Heart City Health Center Inc. as a subrecipient of fifty thousand dollars in ARPA state and local fiscal recovery funds, and authorizes the Department of Law to prepare an appropriates subrecipient agreement for execution by the Board of Works and Heart City Health Center Inc. for the purposes approved herein . . ." The City provided SLFRF award funds to the Heart City Health Center, Inc. to carry out a program on the City's behalf, making the Heart City Health Center, Inc. a subrecipient of the City, as noted in their resolution, and, therefore, subject to subrecipient monitoring. The City was unable provide a copy of the subaward agreement or other supporting documentation to show evaluation of the subrecipient's risk of noncompliance or monitoring activities demonstrating compliance with the subrecipient monitoring requirement. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.331(a) states in part: "Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. . . . Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non- Federal entity: (1) Determines who is eligible to receive what Federal assistance; (2) Has its performance measured in relation to whether objectives of a Federal program were met; (3) Has responsibility for programmatic decision-making; (4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and . . ." 2 CFR 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward . . . (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per ? 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with ? 200.405(d). (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward. . . . (b) Evaluate each subrecipient's risk of noncompliance with Federal statues, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring . . . (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the passthrough entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. . . ." Cause The system of internal controls as established by management of the City was not properly designed nor implemented. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. The City was responsible for providing a subaward agreement and monitoring the nonprofit. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal controls and develop policies and procedures to ensure subrecipients are provided with an adequate subaward agreement and monitored as appropriate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.