FINDING NO: 2023-053 (Partial repeat 2022-022 84.425D & 84.425U) STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.425 – 84.425D, 84.425U FEDERAL PROGRAM NAME: Title I Grants to Local Educational Agencies; Education Stabilization Fund (ESF) - Elementary and Secondary Schools Emergency Relief Fund (ESSER II); American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER III). FEDERAL AWARD NUMBER: S010A220036; S425D210024; S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities 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).” 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (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: … (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition and Context: While testing 40 of 540 LEAs on the Risk Assessment Ranking Tool, we noted the following issues: • For 18 of 40 (45%) LEAs tested, OSDE did not appropriately and/or consistently assign points in the risk assessment based on the established procedures which denotes an inadequate review. However, the LEAs risk category would not have changed or would have been lowered. • For two of 40 (5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated. • For one of 40 (2.5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated and, the LEA was not monitored as high risk appropriately. In addition, while performing testwork on 15 prior year monitored non-compliant sites to see if appropriate follow-up procedures were performed, we noted the following: • For two of 15 (13.33%) LEAs tested, we determined that two LEAs were found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment. • For one of 15 (6.67%) LEAs tested, we determined that one LEA was found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment which would have required the site to be re-monitored as high risk. • While determining our population of the prior year non-compliant LEAs, we noted 32 LEAs were not marked as compliant or non-compliant on the monitoring log. SAI received confirmation from OSDE that three LEAs received a non-compliant status; however, OSDE failed to provide a completed monitoring log as requested; therefore, SAI was unable to determine the status of the remaining 29 LEAs. Cause: OSDE does not have an appropriate tracking system to ensure subrecipient LEAs are accurately evaluated on the Risk Assessment Ranking Tool or to ensure the monitoring logs are completed appropriately. Effect: Failure to adequately distribute risk assessment points could result in inadequate monitoring of subrecipient LEAs. Failure to accurately identify an LEAs compliance status on the monitoring logs could result in inadequate follow-up procedures being performed for non-compliant sites. Recommendation: We recommend OSDE strengthen their policies and procedures related to risk assessment scoring and monitoring logs to ensure all subrecipients are appropriately evaluated and monitored. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: July 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-046 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.425 –84.425D; 84.425R; 84.425V FEDERAL PROGRAM NAME: Elementary and Secondary School Emergency Relief (ESSER) Fund; Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance for Non-Public Schools (CRRSA EANS) American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) FEDERAL AWARD NUMBER: S425D210024; S425R210007; S425V210007 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Subrecipient Monitoring; Special Tests and Provisions – Participation of Private School Children QUESTIONED COSTS: $1,460,995 Criteria: 2 CFR § 200.332 - Requirements for pass-through entities states, “All pass-through entities must: (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: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” CARES ACT SEC. 18005 (a) states, “In General.— A local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools.” ESEA SEC. 1117 (a) (4) (A) Determination, states, “(i) In General.—Expenditures for educational services and other benefits to eligible private school children shall be equal to the proportion of funds allocated to participating school attendance areas based on the number of children from low-income families who attend private schools. (ii) Proportional Share.—The proportional share of funds shall be determined based on the total amount of funds received by the local educational agency under this part prior to any allowable expenditures or transfers by the local educational agency.” 86 FR 36648 – American Rescue Plan Act Emergency Assistance to Non-Public Schools Program states in part, “Under the ARP EANS program, consistent with section 312(d)(1) of division M of the CRRSA Act, the Department will allot funds by formula to each Governor with an approved application based on the State's relative share of children aged 5 through 17 who are from families at or below 185 percent of the 2020 Federal poverty level and enrolled in non-public schools, as determined by the Department on the basis of non-public school enrollment data from the U.S. Census Bureau's American Community Survey (ACS) Public Use Microdata Sample (PUMS) for 2015- 2019.” U.S. Department of Education Application for Funding – Emergency Assistance to Non-Public Schools (EANS) under the American Rescue Plan Act of 2021 (ARP Act) states in part, “Determining Low-Income Counts - To be counted as a student from a low-income family for purposes of the ARP EANS program, a student must be aged 5 through 17 from a family whose income does not exceed 185 percent of the 2020 Federal poverty threshold.” Condition and Context: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency. OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. We reviewed 100 % of ARP EANS claims (238 claims totaling $4,179,555.98) and noted the following: • For 58 of 238 claims (24.37%) totaling $802,414.82, the claim was for a non-public school that used unallowable proportionality data in their ARP EANS application, therefore, the expenditures are unallowable and will result in questioned costs. • For 25 or 238 claims (10.50%) totaling $633,303.03, the claim was for a non-public school that used a low income count in their ARP EANS application which was significantly higher than the low-income count the private schools’ submitted for participation in Title I activities and, it appears that these schools were not eligible for ARP EANS because their actual low-income count did not exceed 40%. Therefore, the expenditures are unallowable and will result in questioned costs. • For 23 of 238 claims (9.66%) totaling $155,588.43, no supporting documentation or, insufficient documentation was available in Peoplesoft and we were unable to identify what non-public school the claim was for and, whether the expenditure was allowable. While performing duplicate testing on miscellaneous expenditure claims processed through the Statewide Accounting System during our ACFR audit, we found one duplicate payment, totaling $25,277.44, related to one CRRSA EANS claim paid for educational materials provided for a non-public school. This will result in questioned costs. Cause: OSDE does not have internal control processes in place to ensure the following are performed appropriately: • Risk Assessments • Contractor Monitoring • Non-public LEA expenditure and claims tracking • ARP EANS claims review and processing Effect: Failure to perform adequate risk assessments and monitoring for non-public LEAs resulted in noncompliance with Federal statutes, regulations. Failure to ensure ARP EANS allocations are revised correctly and based on allowable and correct data resulted in $1,435,717.85 in questioned costs and continued payment of program funds for unallowable services or assistance in the future. The claim review error resulted in a $25,277.44 overpayment to the vendor. Lack of supporting documentation for claims may have resulted in unallowable claims being approved. Recommendation: We recommend that OSDE strengthen their policies and procedures to ensure non-LEA subrecipients are included in the Risk assessment process and monitoring activities. We recommend that OSDE develop and implement policies and procedures to ensure contractor administered services are appropriately monitored and, all non-public LEA expenditures for the CRRSA EANS and ARP EANS programs are adequately tracked by individual non-public LEA and, claims are appropriately supported and reviewed. We recommend OSDE ensure ARP EANS funds paid to or on behalf of non-public LEAs that used an unallowable methodology or incorrect low-income count on their original ARP EANS application are either returned to USDOE or, charged against a different allowable ESF program is possible. Views of Responsible Official(s) Contact Person: Amber Polach Anticipated Completion Date: August 2025 Corrective Action Planned: The Oklahoma State Department of Education partially agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Auditor Response: EANS Proportionality Issue: SAI is aware that USDOE accepted OSDE’s corrective action effective February 5, 2025, however, this does not change the finding condition for this audit period. The payment of $802,414.82 in claims for non-public schools that used unallowable proportionality data in their ARP EANS application is a condition that both existed and was uncorrected as of as of June 30, 2023. In addition, OSDE was aware of the issue prior to the start of the SFY 23 audit period but failed to start implementing corrective action until after the end of SFY 24. The US Department of Education published the following prior to the start of the SFY 23 audit period: • USDOE webinar dated February 24, 2022, that states in part, “Under the ARP EANS final requirements, the source of data must be an actual measure of family income. Methodologies, such as proportionality, may not be used to determine the eligibility of non-public schools for ARP EANS services or assistance.” • USDOE Letter dated July 29, 2022, states in part, “Because proportionality is a methodology to derive an estimate and is not based on actual income data from the families of students enrolled in a non-public school, it cannot be used to determine school eligibility for ARP EANS.” In addition, OSDE received a prior year finding (#2022-070) related to the inappropriate use of the proportionality data. Unsupported ARP EANS Claims Issue: OSDE was provided with a list of the 23 claims totaling $155,588.43, with no supporting documentation or, insufficient documentation to identify what non-public school the claim was for and, whether the expenditure was allowable. This issue is closely related to the following condition also included in this finding: OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. SAI noted that, as part of their corrective action provided to USDOE, OSDE performed a reconciliation of ARP EANS expenditures, however, OSDE did not include adequate corrective action in their response to ensure services performed by outside contractors are adequately monitored and non-public school expenditures are properly tracked in the future. Risk Assessment of Non-LEA Subrecipients: OSDE did not include adequate corrective action in their response for the following condition also included in this finding: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency.
FINDING NO: 2023-053 (Partial repeat 2022-022 84.425D & 84.425U) STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.425 – 84.425D, 84.425U FEDERAL PROGRAM NAME: Title I Grants to Local Educational Agencies; Education Stabilization Fund (ESF) - Elementary and Secondary Schools Emergency Relief Fund (ESSER II); American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER III). FEDERAL AWARD NUMBER: S010A220036; S425D210024; S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities 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).” 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (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: … (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition and Context: While testing 40 of 540 LEAs on the Risk Assessment Ranking Tool, we noted the following issues: • For 18 of 40 (45%) LEAs tested, OSDE did not appropriately and/or consistently assign points in the risk assessment based on the established procedures which denotes an inadequate review. However, the LEAs risk category would not have changed or would have been lowered. • For two of 40 (5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated. • For one of 40 (2.5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated and, the LEA was not monitored as high risk appropriately. In addition, while performing testwork on 15 prior year monitored non-compliant sites to see if appropriate follow-up procedures were performed, we noted the following: • For two of 15 (13.33%) LEAs tested, we determined that two LEAs were found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment. • For one of 15 (6.67%) LEAs tested, we determined that one LEA was found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment which would have required the site to be re-monitored as high risk. • While determining our population of the prior year non-compliant LEAs, we noted 32 LEAs were not marked as compliant or non-compliant on the monitoring log. SAI received confirmation from OSDE that three LEAs received a non-compliant status; however, OSDE failed to provide a completed monitoring log as requested; therefore, SAI was unable to determine the status of the remaining 29 LEAs. Cause: OSDE does not have an appropriate tracking system to ensure subrecipient LEAs are accurately evaluated on the Risk Assessment Ranking Tool or to ensure the monitoring logs are completed appropriately. Effect: Failure to adequately distribute risk assessment points could result in inadequate monitoring of subrecipient LEAs. Failure to accurately identify an LEAs compliance status on the monitoring logs could result in inadequate follow-up procedures being performed for non-compliant sites. Recommendation: We recommend OSDE strengthen their policies and procedures related to risk assessment scoring and monitoring logs to ensure all subrecipients are appropriately evaluated and monitored. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: July 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-046 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.425 –84.425D; 84.425R; 84.425V FEDERAL PROGRAM NAME: Elementary and Secondary School Emergency Relief (ESSER) Fund; Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance for Non-Public Schools (CRRSA EANS) American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) FEDERAL AWARD NUMBER: S425D210024; S425R210007; S425V210007 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Subrecipient Monitoring; Special Tests and Provisions – Participation of Private School Children QUESTIONED COSTS: $1,460,995 Criteria: 2 CFR § 200.332 - Requirements for pass-through entities states, “All pass-through entities must: (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: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” CARES ACT SEC. 18005 (a) states, “In General.— A local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools.” ESEA SEC. 1117 (a) (4) (A) Determination, states, “(i) In General.—Expenditures for educational services and other benefits to eligible private school children shall be equal to the proportion of funds allocated to participating school attendance areas based on the number of children from low-income families who attend private schools. (ii) Proportional Share.—The proportional share of funds shall be determined based on the total amount of funds received by the local educational agency under this part prior to any allowable expenditures or transfers by the local educational agency.” 86 FR 36648 – American Rescue Plan Act Emergency Assistance to Non-Public Schools Program states in part, “Under the ARP EANS program, consistent with section 312(d)(1) of division M of the CRRSA Act, the Department will allot funds by formula to each Governor with an approved application based on the State's relative share of children aged 5 through 17 who are from families at or below 185 percent of the 2020 Federal poverty level and enrolled in non-public schools, as determined by the Department on the basis of non-public school enrollment data from the U.S. Census Bureau's American Community Survey (ACS) Public Use Microdata Sample (PUMS) for 2015- 2019.” U.S. Department of Education Application for Funding – Emergency Assistance to Non-Public Schools (EANS) under the American Rescue Plan Act of 2021 (ARP Act) states in part, “Determining Low-Income Counts - To be counted as a student from a low-income family for purposes of the ARP EANS program, a student must be aged 5 through 17 from a family whose income does not exceed 185 percent of the 2020 Federal poverty threshold.” Condition and Context: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency. OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. We reviewed 100 % of ARP EANS claims (238 claims totaling $4,179,555.98) and noted the following: • For 58 of 238 claims (24.37%) totaling $802,414.82, the claim was for a non-public school that used unallowable proportionality data in their ARP EANS application, therefore, the expenditures are unallowable and will result in questioned costs. • For 25 or 238 claims (10.50%) totaling $633,303.03, the claim was for a non-public school that used a low income count in their ARP EANS application which was significantly higher than the low-income count the private schools’ submitted for participation in Title I activities and, it appears that these schools were not eligible for ARP EANS because their actual low-income count did not exceed 40%. Therefore, the expenditures are unallowable and will result in questioned costs. • For 23 of 238 claims (9.66%) totaling $155,588.43, no supporting documentation or, insufficient documentation was available in Peoplesoft and we were unable to identify what non-public school the claim was for and, whether the expenditure was allowable. While performing duplicate testing on miscellaneous expenditure claims processed through the Statewide Accounting System during our ACFR audit, we found one duplicate payment, totaling $25,277.44, related to one CRRSA EANS claim paid for educational materials provided for a non-public school. This will result in questioned costs. Cause: OSDE does not have internal control processes in place to ensure the following are performed appropriately: • Risk Assessments • Contractor Monitoring • Non-public LEA expenditure and claims tracking • ARP EANS claims review and processing Effect: Failure to perform adequate risk assessments and monitoring for non-public LEAs resulted in noncompliance with Federal statutes, regulations. Failure to ensure ARP EANS allocations are revised correctly and based on allowable and correct data resulted in $1,435,717.85 in questioned costs and continued payment of program funds for unallowable services or assistance in the future. The claim review error resulted in a $25,277.44 overpayment to the vendor. Lack of supporting documentation for claims may have resulted in unallowable claims being approved. Recommendation: We recommend that OSDE strengthen their policies and procedures to ensure non-LEA subrecipients are included in the Risk assessment process and monitoring activities. We recommend that OSDE develop and implement policies and procedures to ensure contractor administered services are appropriately monitored and, all non-public LEA expenditures for the CRRSA EANS and ARP EANS programs are adequately tracked by individual non-public LEA and, claims are appropriately supported and reviewed. We recommend OSDE ensure ARP EANS funds paid to or on behalf of non-public LEAs that used an unallowable methodology or incorrect low-income count on their original ARP EANS application are either returned to USDOE or, charged against a different allowable ESF program is possible. Views of Responsible Official(s) Contact Person: Amber Polach Anticipated Completion Date: August 2025 Corrective Action Planned: The Oklahoma State Department of Education partially agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Auditor Response: EANS Proportionality Issue: SAI is aware that USDOE accepted OSDE’s corrective action effective February 5, 2025, however, this does not change the finding condition for this audit period. The payment of $802,414.82 in claims for non-public schools that used unallowable proportionality data in their ARP EANS application is a condition that both existed and was uncorrected as of as of June 30, 2023. In addition, OSDE was aware of the issue prior to the start of the SFY 23 audit period but failed to start implementing corrective action until after the end of SFY 24. The US Department of Education published the following prior to the start of the SFY 23 audit period: • USDOE webinar dated February 24, 2022, that states in part, “Under the ARP EANS final requirements, the source of data must be an actual measure of family income. Methodologies, such as proportionality, may not be used to determine the eligibility of non-public schools for ARP EANS services or assistance.” • USDOE Letter dated July 29, 2022, states in part, “Because proportionality is a methodology to derive an estimate and is not based on actual income data from the families of students enrolled in a non-public school, it cannot be used to determine school eligibility for ARP EANS.” In addition, OSDE received a prior year finding (#2022-070) related to the inappropriate use of the proportionality data. Unsupported ARP EANS Claims Issue: OSDE was provided with a list of the 23 claims totaling $155,588.43, with no supporting documentation or, insufficient documentation to identify what non-public school the claim was for and, whether the expenditure was allowable. This issue is closely related to the following condition also included in this finding: OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. SAI noted that, as part of their corrective action provided to USDOE, OSDE performed a reconciliation of ARP EANS expenditures, however, OSDE did not include adequate corrective action in their response to ensure services performed by outside contractors are adequately monitored and non-public school expenditures are properly tracked in the future. Risk Assessment of Non-LEA Subrecipients: OSDE did not include adequate corrective action in their response for the following condition also included in this finding: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency.
FINDING NO: 2023-053 (Partial repeat 2022-022 84.425D & 84.425U) STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.425 – 84.425D, 84.425U FEDERAL PROGRAM NAME: Title I Grants to Local Educational Agencies; Education Stabilization Fund (ESF) - Elementary and Secondary Schools Emergency Relief Fund (ESSER II); American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER III). FEDERAL AWARD NUMBER: S010A220036; S425D210024; S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities 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).” 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (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: … (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition and Context: While testing 40 of 540 LEAs on the Risk Assessment Ranking Tool, we noted the following issues: • For 18 of 40 (45%) LEAs tested, OSDE did not appropriately and/or consistently assign points in the risk assessment based on the established procedures which denotes an inadequate review. However, the LEAs risk category would not have changed or would have been lowered. • For two of 40 (5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated. • For one of 40 (2.5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated and, the LEA was not monitored as high risk appropriately. In addition, while performing testwork on 15 prior year monitored non-compliant sites to see if appropriate follow-up procedures were performed, we noted the following: • For two of 15 (13.33%) LEAs tested, we determined that two LEAs were found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment. • For one of 15 (6.67%) LEAs tested, we determined that one LEA was found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment which would have required the site to be re-monitored as high risk. • While determining our population of the prior year non-compliant LEAs, we noted 32 LEAs were not marked as compliant or non-compliant on the monitoring log. SAI received confirmation from OSDE that three LEAs received a non-compliant status; however, OSDE failed to provide a completed monitoring log as requested; therefore, SAI was unable to determine the status of the remaining 29 LEAs. Cause: OSDE does not have an appropriate tracking system to ensure subrecipient LEAs are accurately evaluated on the Risk Assessment Ranking Tool or to ensure the monitoring logs are completed appropriately. Effect: Failure to adequately distribute risk assessment points could result in inadequate monitoring of subrecipient LEAs. Failure to accurately identify an LEAs compliance status on the monitoring logs could result in inadequate follow-up procedures being performed for non-compliant sites. Recommendation: We recommend OSDE strengthen their policies and procedures related to risk assessment scoring and monitoring logs to ensure all subrecipients are appropriately evaluated and monitored. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: July 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-046 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.425 –84.425D; 84.425R; 84.425V FEDERAL PROGRAM NAME: Elementary and Secondary School Emergency Relief (ESSER) Fund; Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance for Non-Public Schools (CRRSA EANS) American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) FEDERAL AWARD NUMBER: S425D210024; S425R210007; S425V210007 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Subrecipient Monitoring; Special Tests and Provisions – Participation of Private School Children QUESTIONED COSTS: $1,460,995 Criteria: 2 CFR § 200.332 - Requirements for pass-through entities states, “All pass-through entities must: (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: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” CARES ACT SEC. 18005 (a) states, “In General.— A local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools.” ESEA SEC. 1117 (a) (4) (A) Determination, states, “(i) In General.—Expenditures for educational services and other benefits to eligible private school children shall be equal to the proportion of funds allocated to participating school attendance areas based on the number of children from low-income families who attend private schools. (ii) Proportional Share.—The proportional share of funds shall be determined based on the total amount of funds received by the local educational agency under this part prior to any allowable expenditures or transfers by the local educational agency.” 86 FR 36648 – American Rescue Plan Act Emergency Assistance to Non-Public Schools Program states in part, “Under the ARP EANS program, consistent with section 312(d)(1) of division M of the CRRSA Act, the Department will allot funds by formula to each Governor with an approved application based on the State's relative share of children aged 5 through 17 who are from families at or below 185 percent of the 2020 Federal poverty level and enrolled in non-public schools, as determined by the Department on the basis of non-public school enrollment data from the U.S. Census Bureau's American Community Survey (ACS) Public Use Microdata Sample (PUMS) for 2015- 2019.” U.S. Department of Education Application for Funding – Emergency Assistance to Non-Public Schools (EANS) under the American Rescue Plan Act of 2021 (ARP Act) states in part, “Determining Low-Income Counts - To be counted as a student from a low-income family for purposes of the ARP EANS program, a student must be aged 5 through 17 from a family whose income does not exceed 185 percent of the 2020 Federal poverty threshold.” Condition and Context: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency. OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. We reviewed 100 % of ARP EANS claims (238 claims totaling $4,179,555.98) and noted the following: • For 58 of 238 claims (24.37%) totaling $802,414.82, the claim was for a non-public school that used unallowable proportionality data in their ARP EANS application, therefore, the expenditures are unallowable and will result in questioned costs. • For 25 or 238 claims (10.50%) totaling $633,303.03, the claim was for a non-public school that used a low income count in their ARP EANS application which was significantly higher than the low-income count the private schools’ submitted for participation in Title I activities and, it appears that these schools were not eligible for ARP EANS because their actual low-income count did not exceed 40%. Therefore, the expenditures are unallowable and will result in questioned costs. • For 23 of 238 claims (9.66%) totaling $155,588.43, no supporting documentation or, insufficient documentation was available in Peoplesoft and we were unable to identify what non-public school the claim was for and, whether the expenditure was allowable. While performing duplicate testing on miscellaneous expenditure claims processed through the Statewide Accounting System during our ACFR audit, we found one duplicate payment, totaling $25,277.44, related to one CRRSA EANS claim paid for educational materials provided for a non-public school. This will result in questioned costs. Cause: OSDE does not have internal control processes in place to ensure the following are performed appropriately: • Risk Assessments • Contractor Monitoring • Non-public LEA expenditure and claims tracking • ARP EANS claims review and processing Effect: Failure to perform adequate risk assessments and monitoring for non-public LEAs resulted in noncompliance with Federal statutes, regulations. Failure to ensure ARP EANS allocations are revised correctly and based on allowable and correct data resulted in $1,435,717.85 in questioned costs and continued payment of program funds for unallowable services or assistance in the future. The claim review error resulted in a $25,277.44 overpayment to the vendor. Lack of supporting documentation for claims may have resulted in unallowable claims being approved. Recommendation: We recommend that OSDE strengthen their policies and procedures to ensure non-LEA subrecipients are included in the Risk assessment process and monitoring activities. We recommend that OSDE develop and implement policies and procedures to ensure contractor administered services are appropriately monitored and, all non-public LEA expenditures for the CRRSA EANS and ARP EANS programs are adequately tracked by individual non-public LEA and, claims are appropriately supported and reviewed. We recommend OSDE ensure ARP EANS funds paid to or on behalf of non-public LEAs that used an unallowable methodology or incorrect low-income count on their original ARP EANS application are either returned to USDOE or, charged against a different allowable ESF program is possible. Views of Responsible Official(s) Contact Person: Amber Polach Anticipated Completion Date: August 2025 Corrective Action Planned: The Oklahoma State Department of Education partially agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Auditor Response: EANS Proportionality Issue: SAI is aware that USDOE accepted OSDE’s corrective action effective February 5, 2025, however, this does not change the finding condition for this audit period. The payment of $802,414.82 in claims for non-public schools that used unallowable proportionality data in their ARP EANS application is a condition that both existed and was uncorrected as of as of June 30, 2023. In addition, OSDE was aware of the issue prior to the start of the SFY 23 audit period but failed to start implementing corrective action until after the end of SFY 24. The US Department of Education published the following prior to the start of the SFY 23 audit period: • USDOE webinar dated February 24, 2022, that states in part, “Under the ARP EANS final requirements, the source of data must be an actual measure of family income. Methodologies, such as proportionality, may not be used to determine the eligibility of non-public schools for ARP EANS services or assistance.” • USDOE Letter dated July 29, 2022, states in part, “Because proportionality is a methodology to derive an estimate and is not based on actual income data from the families of students enrolled in a non-public school, it cannot be used to determine school eligibility for ARP EANS.” In addition, OSDE received a prior year finding (#2022-070) related to the inappropriate use of the proportionality data. Unsupported ARP EANS Claims Issue: OSDE was provided with a list of the 23 claims totaling $155,588.43, with no supporting documentation or, insufficient documentation to identify what non-public school the claim was for and, whether the expenditure was allowable. This issue is closely related to the following condition also included in this finding: OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. SAI noted that, as part of their corrective action provided to USDOE, OSDE performed a reconciliation of ARP EANS expenditures, however, OSDE did not include adequate corrective action in their response to ensure services performed by outside contractors are adequately monitored and non-public school expenditures are properly tracked in the future. Risk Assessment of Non-LEA Subrecipients: OSDE did not include adequate corrective action in their response for the following condition also included in this finding: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency.
FINDING NO: 2023-053 (Partial repeat 2022-022 84.425D & 84.425U) STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.425 – 84.425D, 84.425U FEDERAL PROGRAM NAME: Title I Grants to Local Educational Agencies; Education Stabilization Fund (ESF) - Elementary and Secondary Schools Emergency Relief Fund (ESSER II); American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER III). FEDERAL AWARD NUMBER: S010A220036; S425D210024; S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities 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).” 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (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: … (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition and Context: While testing 40 of 540 LEAs on the Risk Assessment Ranking Tool, we noted the following issues: • For 18 of 40 (45%) LEAs tested, OSDE did not appropriately and/or consistently assign points in the risk assessment based on the established procedures which denotes an inadequate review. However, the LEAs risk category would not have changed or would have been lowered. • For two of 40 (5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated. • For one of 40 (2.5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated and, the LEA was not monitored as high risk appropriately. In addition, while performing testwork on 15 prior year monitored non-compliant sites to see if appropriate follow-up procedures were performed, we noted the following: • For two of 15 (13.33%) LEAs tested, we determined that two LEAs were found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment. • For one of 15 (6.67%) LEAs tested, we determined that one LEA was found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment which would have required the site to be re-monitored as high risk. • While determining our population of the prior year non-compliant LEAs, we noted 32 LEAs were not marked as compliant or non-compliant on the monitoring log. SAI received confirmation from OSDE that three LEAs received a non-compliant status; however, OSDE failed to provide a completed monitoring log as requested; therefore, SAI was unable to determine the status of the remaining 29 LEAs. Cause: OSDE does not have an appropriate tracking system to ensure subrecipient LEAs are accurately evaluated on the Risk Assessment Ranking Tool or to ensure the monitoring logs are completed appropriately. Effect: Failure to adequately distribute risk assessment points could result in inadequate monitoring of subrecipient LEAs. Failure to accurately identify an LEAs compliance status on the monitoring logs could result in inadequate follow-up procedures being performed for non-compliant sites. Recommendation: We recommend OSDE strengthen their policies and procedures related to risk assessment scoring and monitoring logs to ensure all subrecipients are appropriately evaluated and monitored. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: July 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-046 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.425 –84.425D; 84.425R; 84.425V FEDERAL PROGRAM NAME: Elementary and Secondary School Emergency Relief (ESSER) Fund; Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance for Non-Public Schools (CRRSA EANS) American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) FEDERAL AWARD NUMBER: S425D210024; S425R210007; S425V210007 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Subrecipient Monitoring; Special Tests and Provisions – Participation of Private School Children QUESTIONED COSTS: $1,460,995 Criteria: 2 CFR § 200.332 - Requirements for pass-through entities states, “All pass-through entities must: (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: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” CARES ACT SEC. 18005 (a) states, “In General.— A local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools.” ESEA SEC. 1117 (a) (4) (A) Determination, states, “(i) In General.—Expenditures for educational services and other benefits to eligible private school children shall be equal to the proportion of funds allocated to participating school attendance areas based on the number of children from low-income families who attend private schools. (ii) Proportional Share.—The proportional share of funds shall be determined based on the total amount of funds received by the local educational agency under this part prior to any allowable expenditures or transfers by the local educational agency.” 86 FR 36648 – American Rescue Plan Act Emergency Assistance to Non-Public Schools Program states in part, “Under the ARP EANS program, consistent with section 312(d)(1) of division M of the CRRSA Act, the Department will allot funds by formula to each Governor with an approved application based on the State's relative share of children aged 5 through 17 who are from families at or below 185 percent of the 2020 Federal poverty level and enrolled in non-public schools, as determined by the Department on the basis of non-public school enrollment data from the U.S. Census Bureau's American Community Survey (ACS) Public Use Microdata Sample (PUMS) for 2015- 2019.” U.S. Department of Education Application for Funding – Emergency Assistance to Non-Public Schools (EANS) under the American Rescue Plan Act of 2021 (ARP Act) states in part, “Determining Low-Income Counts - To be counted as a student from a low-income family for purposes of the ARP EANS program, a student must be aged 5 through 17 from a family whose income does not exceed 185 percent of the 2020 Federal poverty threshold.” Condition and Context: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency. OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. We reviewed 100 % of ARP EANS claims (238 claims totaling $4,179,555.98) and noted the following: • For 58 of 238 claims (24.37%) totaling $802,414.82, the claim was for a non-public school that used unallowable proportionality data in their ARP EANS application, therefore, the expenditures are unallowable and will result in questioned costs. • For 25 or 238 claims (10.50%) totaling $633,303.03, the claim was for a non-public school that used a low income count in their ARP EANS application which was significantly higher than the low-income count the private schools’ submitted for participation in Title I activities and, it appears that these schools were not eligible for ARP EANS because their actual low-income count did not exceed 40%. Therefore, the expenditures are unallowable and will result in questioned costs. • For 23 of 238 claims (9.66%) totaling $155,588.43, no supporting documentation or, insufficient documentation was available in Peoplesoft and we were unable to identify what non-public school the claim was for and, whether the expenditure was allowable. While performing duplicate testing on miscellaneous expenditure claims processed through the Statewide Accounting System during our ACFR audit, we found one duplicate payment, totaling $25,277.44, related to one CRRSA EANS claim paid for educational materials provided for a non-public school. This will result in questioned costs. Cause: OSDE does not have internal control processes in place to ensure the following are performed appropriately: • Risk Assessments • Contractor Monitoring • Non-public LEA expenditure and claims tracking • ARP EANS claims review and processing Effect: Failure to perform adequate risk assessments and monitoring for non-public LEAs resulted in noncompliance with Federal statutes, regulations. Failure to ensure ARP EANS allocations are revised correctly and based on allowable and correct data resulted in $1,435,717.85 in questioned costs and continued payment of program funds for unallowable services or assistance in the future. The claim review error resulted in a $25,277.44 overpayment to the vendor. Lack of supporting documentation for claims may have resulted in unallowable claims being approved. Recommendation: We recommend that OSDE strengthen their policies and procedures to ensure non-LEA subrecipients are included in the Risk assessment process and monitoring activities. We recommend that OSDE develop and implement policies and procedures to ensure contractor administered services are appropriately monitored and, all non-public LEA expenditures for the CRRSA EANS and ARP EANS programs are adequately tracked by individual non-public LEA and, claims are appropriately supported and reviewed. We recommend OSDE ensure ARP EANS funds paid to or on behalf of non-public LEAs that used an unallowable methodology or incorrect low-income count on their original ARP EANS application are either returned to USDOE or, charged against a different allowable ESF program is possible. Views of Responsible Official(s) Contact Person: Amber Polach Anticipated Completion Date: August 2025 Corrective Action Planned: The Oklahoma State Department of Education partially agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Auditor Response: EANS Proportionality Issue: SAI is aware that USDOE accepted OSDE’s corrective action effective February 5, 2025, however, this does not change the finding condition for this audit period. The payment of $802,414.82 in claims for non-public schools that used unallowable proportionality data in their ARP EANS application is a condition that both existed and was uncorrected as of as of June 30, 2023. In addition, OSDE was aware of the issue prior to the start of the SFY 23 audit period but failed to start implementing corrective action until after the end of SFY 24. The US Department of Education published the following prior to the start of the SFY 23 audit period: • USDOE webinar dated February 24, 2022, that states in part, “Under the ARP EANS final requirements, the source of data must be an actual measure of family income. Methodologies, such as proportionality, may not be used to determine the eligibility of non-public schools for ARP EANS services or assistance.” • USDOE Letter dated July 29, 2022, states in part, “Because proportionality is a methodology to derive an estimate and is not based on actual income data from the families of students enrolled in a non-public school, it cannot be used to determine school eligibility for ARP EANS.” In addition, OSDE received a prior year finding (#2022-070) related to the inappropriate use of the proportionality data. Unsupported ARP EANS Claims Issue: OSDE was provided with a list of the 23 claims totaling $155,588.43, with no supporting documentation or, insufficient documentation to identify what non-public school the claim was for and, whether the expenditure was allowable. This issue is closely related to the following condition also included in this finding: OSDE contracted with an outside vendor to oversee and administer non-public services for the CRRSA EANS and ARP EANS programs. However, OSDE failed to properly review, track and monitor these expenditures and, was unable to provide SAI with data showing how much was expended on behalf of each non-public school for either the CRRSA EANS or ARP EANS program. SAI noted that, as part of their corrective action provided to USDOE, OSDE performed a reconciliation of ARP EANS expenditures, however, OSDE did not include adequate corrective action in their response to ensure services performed by outside contractors are adequately monitored and non-public school expenditures are properly tracked in the future. Risk Assessment of Non-LEA Subrecipients: OSDE did not include adequate corrective action in their response for the following condition also included in this finding: OSDE did not properly include non-LEA subrecipients (i.e., non-public schools, contractors) in their evaluation of each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the subrecipient monitoring to be performed by the agency.
FINDING NO: 2023-053 (Partial repeat 2022-022 84.425D & 84.425U) STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.425 – 84.425D, 84.425U FEDERAL PROGRAM NAME: Title I Grants to Local Educational Agencies; Education Stabilization Fund (ESF) - Elementary and Secondary Schools Emergency Relief Fund (ESSER II); American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER III). FEDERAL AWARD NUMBER: S010A220036; S425D210024; S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities 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).” 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (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: … (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition and Context: While testing 40 of 540 LEAs on the Risk Assessment Ranking Tool, we noted the following issues: • For 18 of 40 (45%) LEAs tested, OSDE did not appropriately and/or consistently assign points in the risk assessment based on the established procedures which denotes an inadequate review. However, the LEAs risk category would not have changed or would have been lowered. • For two of 40 (5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated. • For one of 40 (2.5%) LEAs tested, the LEA’s risk of noncompliance was inappropriately evaluated and, the LEA was not monitored as high risk appropriately. In addition, while performing testwork on 15 prior year monitored non-compliant sites to see if appropriate follow-up procedures were performed, we noted the following: • For two of 15 (13.33%) LEAs tested, we determined that two LEAs were found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment. • For one of 15 (6.67%) LEAs tested, we determined that one LEA was found to be non-compliant during FY22 monitoring and did not receive points on the FY23 Risk Assessment which would have required the site to be re-monitored as high risk. • While determining our population of the prior year non-compliant LEAs, we noted 32 LEAs were not marked as compliant or non-compliant on the monitoring log. SAI received confirmation from OSDE that three LEAs received a non-compliant status; however, OSDE failed to provide a completed monitoring log as requested; therefore, SAI was unable to determine the status of the remaining 29 LEAs. Cause: OSDE does not have an appropriate tracking system to ensure subrecipient LEAs are accurately evaluated on the Risk Assessment Ranking Tool or to ensure the monitoring logs are completed appropriately. Effect: Failure to adequately distribute risk assessment points could result in inadequate monitoring of subrecipient LEAs. Failure to accurately identify an LEAs compliance status on the monitoring logs could result in inadequate follow-up procedures being performed for non-compliant sites. Recommendation: We recommend OSDE strengthen their policies and procedures related to risk assessment scoring and monitoring logs to ensure all subrecipients are appropriately evaluated and monitored. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: July 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-212 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities states in part, “All pass-through entities must:… (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and 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) Subrecipient’s prior experience with the same or similar awards; (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).” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award.” Condition and Context: The Oklahoma State Department of Education (“OSDE) awarded subgrants of Epidemiology Laboratory Capacity (“ELC”) funding through the Reopening Schools grant on an application basis to school districts throughout the state, without performing a required risk assessment of individual Local Education Agencies (“LEA”). Awarded funds were based on LEA self-certification and budgeted use of funds, with funding being disbursed upon approval of the application based on prior school year’s October 1 enrollment counts. As such, 27 of 60 selections tested (45%) did not have an appropriate risk assessment score, or risk of noncompliance was inappropriately evaluated. 7 of 60 selections tested (12%) did not have an initial risk assessment, but did provide a mid-year evaluation subsequent to OSDE making the award to the LEA. Additionally, a central repository of documentation was lacking and the underlying source documents and records were missing or incomplete. Reimbursements were made to subrecipients without obtaining sufficient underlying details to support the total expenditure claimed by the LEAs. As such, 3 of 60 selections tested (5%) of claim reimbursements totaling approximately $162,500 paid did not have sufficient underlying details to support the claim paid to the LEAs. Cause and Effect: By awarding subgrants to LEAs solely based on an application process and a set dollar figure per student enrollments, OSDE has not adequately followed 2 CFR § 200.332 to distribute subawards based on LEAs individual risk. As a result of improper monitoring of subrecipients, OSDE has increased the risk that a LEA could inappropriately spend the ELC funds awarded and be noncompliant with AL# 93.323. Additionally, reimbursing LEAs based on requested amounts without a thorough system of internal controls to inspect all underlying source documentation comprising the total expenditures requested increases the risk of noncompliance as unallowable expenditures could be contained within the batch total requested by the LEA. Recommendation: We recommend OSDE implements a thorough risk assessment of each LEA to factor into its application and subaward process for Assistance Listing 93.323, catering the award amount and approvals based on individual LEAs risk. Furthermore, we recommend a complete reconciliation of requested reimbursement is performed to the underlying detailed supporting documentation and that these reconciliations are maintained in a central repository for evidence of through reviews of LEAs claimed costs. Views of Responsible Official(s) Contact Person: Shawn Richmond, Comptroller Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-212 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities states in part, “All pass-through entities must:… (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and 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) Subrecipient’s prior experience with the same or similar awards; (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).” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award.” Condition and Context: The Oklahoma State Department of Education (“OSDE) awarded subgrants of Epidemiology Laboratory Capacity (“ELC”) funding through the Reopening Schools grant on an application basis to school districts throughout the state, without performing a required risk assessment of individual Local Education Agencies (“LEA”). Awarded funds were based on LEA self-certification and budgeted use of funds, with funding being disbursed upon approval of the application based on prior school year’s October 1 enrollment counts. As such, 27 of 60 selections tested (45%) did not have an appropriate risk assessment score, or risk of noncompliance was inappropriately evaluated. 7 of 60 selections tested (12%) did not have an initial risk assessment, but did provide a mid-year evaluation subsequent to OSDE making the award to the LEA. Additionally, a central repository of documentation was lacking and the underlying source documents and records were missing or incomplete. Reimbursements were made to subrecipients without obtaining sufficient underlying details to support the total expenditure claimed by the LEAs. As such, 3 of 60 selections tested (5%) of claim reimbursements totaling approximately $162,500 paid did not have sufficient underlying details to support the claim paid to the LEAs. Cause and Effect: By awarding subgrants to LEAs solely based on an application process and a set dollar figure per student enrollments, OSDE has not adequately followed 2 CFR § 200.332 to distribute subawards based on LEAs individual risk. As a result of improper monitoring of subrecipients, OSDE has increased the risk that a LEA could inappropriately spend the ELC funds awarded and be noncompliant with AL# 93.323. Additionally, reimbursing LEAs based on requested amounts without a thorough system of internal controls to inspect all underlying source documentation comprising the total expenditures requested increases the risk of noncompliance as unallowable expenditures could be contained within the batch total requested by the LEA. Recommendation: We recommend OSDE implements a thorough risk assessment of each LEA to factor into its application and subaward process for Assistance Listing 93.323, catering the award amount and approvals based on individual LEAs risk. Furthermore, we recommend a complete reconciliation of requested reimbursement is performed to the underlying detailed supporting documentation and that these reconciliations are maintained in a central repository for evidence of through reviews of LEAs claimed costs. Views of Responsible Official(s) Contact Person: Shawn Richmond, Comptroller Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-212 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities states in part, “All pass-through entities must:… (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and 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) Subrecipient’s prior experience with the same or similar awards; (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).” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award.” Condition and Context: The Oklahoma State Department of Education (“OSDE) awarded subgrants of Epidemiology Laboratory Capacity (“ELC”) funding through the Reopening Schools grant on an application basis to school districts throughout the state, without performing a required risk assessment of individual Local Education Agencies (“LEA”). Awarded funds were based on LEA self-certification and budgeted use of funds, with funding being disbursed upon approval of the application based on prior school year’s October 1 enrollment counts. As such, 27 of 60 selections tested (45%) did not have an appropriate risk assessment score, or risk of noncompliance was inappropriately evaluated. 7 of 60 selections tested (12%) did not have an initial risk assessment, but did provide a mid-year evaluation subsequent to OSDE making the award to the LEA. Additionally, a central repository of documentation was lacking and the underlying source documents and records were missing or incomplete. Reimbursements were made to subrecipients without obtaining sufficient underlying details to support the total expenditure claimed by the LEAs. As such, 3 of 60 selections tested (5%) of claim reimbursements totaling approximately $162,500 paid did not have sufficient underlying details to support the claim paid to the LEAs. Cause and Effect: By awarding subgrants to LEAs solely based on an application process and a set dollar figure per student enrollments, OSDE has not adequately followed 2 CFR § 200.332 to distribute subawards based on LEAs individual risk. As a result of improper monitoring of subrecipients, OSDE has increased the risk that a LEA could inappropriately spend the ELC funds awarded and be noncompliant with AL# 93.323. Additionally, reimbursing LEAs based on requested amounts without a thorough system of internal controls to inspect all underlying source documentation comprising the total expenditures requested increases the risk of noncompliance as unallowable expenditures could be contained within the batch total requested by the LEA. Recommendation: We recommend OSDE implements a thorough risk assessment of each LEA to factor into its application and subaward process for Assistance Listing 93.323, catering the award amount and approvals based on individual LEAs risk. Furthermore, we recommend a complete reconciliation of requested reimbursement is performed to the underlying detailed supporting documentation and that these reconciliations are maintained in a central repository for evidence of through reviews of LEAs claimed costs. Views of Responsible Official(s) Contact Person: Shawn Richmond, Comptroller Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-212 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities states in part, “All pass-through entities must:… (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and 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) Subrecipient’s prior experience with the same or similar awards; (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).” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award.” Condition and Context: The Oklahoma State Department of Education (“OSDE) awarded subgrants of Epidemiology Laboratory Capacity (“ELC”) funding through the Reopening Schools grant on an application basis to school districts throughout the state, without performing a required risk assessment of individual Local Education Agencies (“LEA”). Awarded funds were based on LEA self-certification and budgeted use of funds, with funding being disbursed upon approval of the application based on prior school year’s October 1 enrollment counts. As such, 27 of 60 selections tested (45%) did not have an appropriate risk assessment score, or risk of noncompliance was inappropriately evaluated. 7 of 60 selections tested (12%) did not have an initial risk assessment, but did provide a mid-year evaluation subsequent to OSDE making the award to the LEA. Additionally, a central repository of documentation was lacking and the underlying source documents and records were missing or incomplete. Reimbursements were made to subrecipients without obtaining sufficient underlying details to support the total expenditure claimed by the LEAs. As such, 3 of 60 selections tested (5%) of claim reimbursements totaling approximately $162,500 paid did not have sufficient underlying details to support the claim paid to the LEAs. Cause and Effect: By awarding subgrants to LEAs solely based on an application process and a set dollar figure per student enrollments, OSDE has not adequately followed 2 CFR § 200.332 to distribute subawards based on LEAs individual risk. As a result of improper monitoring of subrecipients, OSDE has increased the risk that a LEA could inappropriately spend the ELC funds awarded and be noncompliant with AL# 93.323. Additionally, reimbursing LEAs based on requested amounts without a thorough system of internal controls to inspect all underlying source documentation comprising the total expenditures requested increases the risk of noncompliance as unallowable expenditures could be contained within the batch total requested by the LEA. Recommendation: We recommend OSDE implements a thorough risk assessment of each LEA to factor into its application and subaward process for Assistance Listing 93.323, catering the award amount and approvals based on individual LEAs risk. Furthermore, we recommend a complete reconciliation of requested reimbursement is performed to the underlying detailed supporting documentation and that these reconciliations are maintained in a central repository for evidence of through reviews of LEAs claimed costs. Views of Responsible Official(s) Contact Person: Shawn Richmond, Comptroller Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-212 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities states in part, “All pass-through entities must:… (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and 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) Subrecipient’s prior experience with the same or similar awards; (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).” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award.” Condition and Context: The Oklahoma State Department of Education (“OSDE) awarded subgrants of Epidemiology Laboratory Capacity (“ELC”) funding through the Reopening Schools grant on an application basis to school districts throughout the state, without performing a required risk assessment of individual Local Education Agencies (“LEA”). Awarded funds were based on LEA self-certification and budgeted use of funds, with funding being disbursed upon approval of the application based on prior school year’s October 1 enrollment counts. As such, 27 of 60 selections tested (45%) did not have an appropriate risk assessment score, or risk of noncompliance was inappropriately evaluated. 7 of 60 selections tested (12%) did not have an initial risk assessment, but did provide a mid-year evaluation subsequent to OSDE making the award to the LEA. Additionally, a central repository of documentation was lacking and the underlying source documents and records were missing or incomplete. Reimbursements were made to subrecipients without obtaining sufficient underlying details to support the total expenditure claimed by the LEAs. As such, 3 of 60 selections tested (5%) of claim reimbursements totaling approximately $162,500 paid did not have sufficient underlying details to support the claim paid to the LEAs. Cause and Effect: By awarding subgrants to LEAs solely based on an application process and a set dollar figure per student enrollments, OSDE has not adequately followed 2 CFR § 200.332 to distribute subawards based on LEAs individual risk. As a result of improper monitoring of subrecipients, OSDE has increased the risk that a LEA could inappropriately spend the ELC funds awarded and be noncompliant with AL# 93.323. Additionally, reimbursing LEAs based on requested amounts without a thorough system of internal controls to inspect all underlying source documentation comprising the total expenditures requested increases the risk of noncompliance as unallowable expenditures could be contained within the batch total requested by the LEA. Recommendation: We recommend OSDE implements a thorough risk assessment of each LEA to factor into its application and subaward process for Assistance Listing 93.323, catering the award amount and approvals based on individual LEAs risk. Furthermore, we recommend a complete reconciliation of requested reimbursement is performed to the underlying detailed supporting documentation and that these reconciliations are maintained in a central repository for evidence of through reviews of LEAs claimed costs. Views of Responsible Official(s) Contact Person: Shawn Richmond, Comptroller Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-212 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.332(b) – Requirements for Pass-through Entities states in part, “All pass-through entities must:… (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and 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) Subrecipient’s prior experience with the same or similar awards; (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).” 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award.” Condition and Context: The Oklahoma State Department of Education (“OSDE) awarded subgrants of Epidemiology Laboratory Capacity (“ELC”) funding through the Reopening Schools grant on an application basis to school districts throughout the state, without performing a required risk assessment of individual Local Education Agencies (“LEA”). Awarded funds were based on LEA self-certification and budgeted use of funds, with funding being disbursed upon approval of the application based on prior school year’s October 1 enrollment counts. As such, 27 of 60 selections tested (45%) did not have an appropriate risk assessment score, or risk of noncompliance was inappropriately evaluated. 7 of 60 selections tested (12%) did not have an initial risk assessment, but did provide a mid-year evaluation subsequent to OSDE making the award to the LEA. Additionally, a central repository of documentation was lacking and the underlying source documents and records were missing or incomplete. Reimbursements were made to subrecipients without obtaining sufficient underlying details to support the total expenditure claimed by the LEAs. As such, 3 of 60 selections tested (5%) of claim reimbursements totaling approximately $162,500 paid did not have sufficient underlying details to support the claim paid to the LEAs. Cause and Effect: By awarding subgrants to LEAs solely based on an application process and a set dollar figure per student enrollments, OSDE has not adequately followed 2 CFR § 200.332 to distribute subawards based on LEAs individual risk. As a result of improper monitoring of subrecipients, OSDE has increased the risk that a LEA could inappropriately spend the ELC funds awarded and be noncompliant with AL# 93.323. Additionally, reimbursing LEAs based on requested amounts without a thorough system of internal controls to inspect all underlying source documentation comprising the total expenditures requested increases the risk of noncompliance as unallowable expenditures could be contained within the batch total requested by the LEA. Recommendation: We recommend OSDE implements a thorough risk assessment of each LEA to factor into its application and subaward process for Assistance Listing 93.323, catering the award amount and approvals based on individual LEAs risk. Furthermore, we recommend a complete reconciliation of requested reimbursement is performed to the underlying detailed supporting documentation and that these reconciliations are maintained in a central repository for evidence of through reviews of LEAs claimed costs. Views of Responsible Official(s) Contact Person: Shawn Richmond, Comptroller Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-006 (Repeat Finding 2022-018) STATE AGENCY: Oklahoma Department of Human Services FEDERAL AGENCY: Department of Health and Human Services ALN: 93.658 FEDERAL PROGRAM NAME: Foster Care – Title IV-E FEDERAL AWARD NUMBER: 2201OKFOST and 2301OKFOST FEDERAL AWARD YEAR: 2022 and 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 45 CFR §75.303(a) states in part “The Non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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).” Per 2 CFR §200.1 Definitions, “Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract [emphasis added].” 2 CFR §200.332 Requirements for pass-through entities 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 and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (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; (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).” Condition and Context: We tested 10 of the 10 subrecipient contracts and we noted the following exceptions: • Two of ten (20%) subawards, did not contain the subrecipient’s unique entity identifier, federal award identification number, and federal award date. • One of 10 (10%) subawards, did not include the period of performance in the subaward contract. • One of 10 (10%) subawards, did not include the AL# on the contract. • Ten of ten (100%) subawards did not include the indirect cost rate, or if the indirect cost rate was federally recognized. • Ten of Ten (100%) subawards, did not contain all the information required in accordance with 2CFR section 200.332(a) (1) & (2). For a sample of 2 of the 10 subrecipients, management confirmed the subrecipient risk assessments were not completed until after the end of the fiscal year and thus were not utilized to determine the appropriate subrecipient monitoring to be performed during the fiscal year for those subrecipients. Cause: This is a prior audit finding dating back to SFY2017; DHS Management showed some corrective action has been implemented to address identifying the award and applicable requirements or monitoring as required in 2 CFR 200.332. Management does not properly understand the program requirements. Effect: OKDHS is not in compliance with the monitoring requirements for this program. Therefore, subrecipients may not be spending federal funds in accordance with program requirements. Recommendation: We recommend OKDHS further modify its subrecipient agreements and related documentation to ensure all required award identification is provided. Additionally, we recommend OKDHS perform risk assessments on all subrecipients at the start of the fiscal year to determine the level of monitoring necessary. Views of Responsible Official(s) Contact Person: Kevin Haddock Anticipated Completion Date: February 2025 Corrective Action Planned: The Department of Human Services partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: During audit work, program personnel informed SAI staff, that risk assessments are completed at the fiscal year end when they have final draw amounts. There is no date on the risk assessment so we had to rely on the information provided by program personnel.
FINDING NO: 2023-006 (Repeat Finding 2022-018) STATE AGENCY: Oklahoma Department of Human Services FEDERAL AGENCY: Department of Health and Human Services ALN: 93.658 FEDERAL PROGRAM NAME: Foster Care – Title IV-E FEDERAL AWARD NUMBER: 2201OKFOST and 2301OKFOST FEDERAL AWARD YEAR: 2022 and 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 45 CFR §75.303(a) states in part “The Non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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).” Per 2 CFR §200.1 Definitions, “Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract [emphasis added].” 2 CFR §200.332 Requirements for pass-through entities 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 and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (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; (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).” Condition and Context: We tested 10 of the 10 subrecipient contracts and we noted the following exceptions: • Two of ten (20%) subawards, did not contain the subrecipient’s unique entity identifier, federal award identification number, and federal award date. • One of 10 (10%) subawards, did not include the period of performance in the subaward contract. • One of 10 (10%) subawards, did not include the AL# on the contract. • Ten of ten (100%) subawards did not include the indirect cost rate, or if the indirect cost rate was federally recognized. • Ten of Ten (100%) subawards, did not contain all the information required in accordance with 2CFR section 200.332(a) (1) & (2). For a sample of 2 of the 10 subrecipients, management confirmed the subrecipient risk assessments were not completed until after the end of the fiscal year and thus were not utilized to determine the appropriate subrecipient monitoring to be performed during the fiscal year for those subrecipients. Cause: This is a prior audit finding dating back to SFY2017; DHS Management showed some corrective action has been implemented to address identifying the award and applicable requirements or monitoring as required in 2 CFR 200.332. Management does not properly understand the program requirements. Effect: OKDHS is not in compliance with the monitoring requirements for this program. Therefore, subrecipients may not be spending federal funds in accordance with program requirements. Recommendation: We recommend OKDHS further modify its subrecipient agreements and related documentation to ensure all required award identification is provided. Additionally, we recommend OKDHS perform risk assessments on all subrecipients at the start of the fiscal year to determine the level of monitoring necessary. Views of Responsible Official(s) Contact Person: Kevin Haddock Anticipated Completion Date: February 2025 Corrective Action Planned: The Department of Human Services partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: During audit work, program personnel informed SAI staff, that risk assessments are completed at the fiscal year end when they have final draw amounts. There is no date on the risk assessment so we had to rely on the information provided by program personnel.
FINDING NO: 2023-006 (Repeat Finding 2022-018) STATE AGENCY: Oklahoma Department of Human Services FEDERAL AGENCY: Department of Health and Human Services ALN: 93.658 FEDERAL PROGRAM NAME: Foster Care – Title IV-E FEDERAL AWARD NUMBER: 2201OKFOST and 2301OKFOST FEDERAL AWARD YEAR: 2022 and 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 45 CFR §75.303(a) states in part “The Non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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).” Per 2 CFR §200.1 Definitions, “Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract [emphasis added].” 2 CFR §200.332 Requirements for pass-through entities 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 and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (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; (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).” Condition and Context: We tested 10 of the 10 subrecipient contracts and we noted the following exceptions: • Two of ten (20%) subawards, did not contain the subrecipient’s unique entity identifier, federal award identification number, and federal award date. • One of 10 (10%) subawards, did not include the period of performance in the subaward contract. • One of 10 (10%) subawards, did not include the AL# on the contract. • Ten of ten (100%) subawards did not include the indirect cost rate, or if the indirect cost rate was federally recognized. • Ten of Ten (100%) subawards, did not contain all the information required in accordance with 2CFR section 200.332(a) (1) & (2). For a sample of 2 of the 10 subrecipients, management confirmed the subrecipient risk assessments were not completed until after the end of the fiscal year and thus were not utilized to determine the appropriate subrecipient monitoring to be performed during the fiscal year for those subrecipients. Cause: This is a prior audit finding dating back to SFY2017; DHS Management showed some corrective action has been implemented to address identifying the award and applicable requirements or monitoring as required in 2 CFR 200.332. Management does not properly understand the program requirements. Effect: OKDHS is not in compliance with the monitoring requirements for this program. Therefore, subrecipients may not be spending federal funds in accordance with program requirements. Recommendation: We recommend OKDHS further modify its subrecipient agreements and related documentation to ensure all required award identification is provided. Additionally, we recommend OKDHS perform risk assessments on all subrecipients at the start of the fiscal year to determine the level of monitoring necessary. Views of Responsible Official(s) Contact Person: Kevin Haddock Anticipated Completion Date: February 2025 Corrective Action Planned: The Department of Human Services partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: During audit work, program personnel informed SAI staff, that risk assessments are completed at the fiscal year end when they have final draw amounts. There is no date on the risk assessment so we had to rely on the information provided by program personnel.
Federal Agency: U.S. Department of Homeland Security Pass-Through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3) Program: Disaster Grants – Public Assistance (Presidentially-Declared Disaster) (ALN 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Control (SD), Instance of Noncompliance (NC) Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of five (5) projects for two quarters of fiscal year 2022-2023. Our audit procedures revealed that Quarterly Progress Reports were not submitted for one of the quarters for four of the five projects evaluated. Criteria 2 CFR 200.328 (c) states that the recipient or subrecipient must submit financial reports as required by the Federal award. […] Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. 2 CFR 200.329 (c) (1) states that the recipient or subrecipient must submit performance reports as required by the Federal award. […] Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. […] 2 CFR 200.332 (b) (3) states that any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity to meet its responsibilities under the Federal award. This includes information and certifications […] required for submitting financial and performance reports that the pass-through entity must provide to the Federal agency. 44 CFR 206.204 (f) states that progress reports will be submitted by the recipient to the Regional Administrator quarterly. […] COR3, as a pass-through entity, requires Subrecipients to complete and submit a quarterly progress report for each Project Worksheet (“PW”) through the Disaster Recovery Solution (“DRS”) Platform. This information is then submitted to the Federal Emergency Management Agency (FEMA). Quarterly Progress Reports cannot be edited or submitted after the deadline. Cause of Condition The Municipality did not manage time effectively to complete the Quarterly Progress Reports as required by the Federal award. Effect of Condition The Municipality failed in the submission of Quarterly Progress Reports as required by the Federal award. Recommendation We recommend the Program Administrators manage time effectively to complete the Quarterly Progress Reports timely. Questioned Costs None. Views of Responsible Officials and Planned Corrective Action We will give instructions to the accounting staff in charge of the preparation of the quarterly progress reports of the Program, in order to comply with the FEMA reporting requirements. Responsible Official: Mrs. Irma M. Vargas Aguirre, Finance and Budget Director Implementation Date: December 31, 2025
Criteria: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Monitoring the activities of the subrecipients is necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition: The County did not have a process for monitoring subrecipients and did not provide documentation to support subrecipient monitoring for all subawards issued during fiscal year 2023. Cause: The County’s Finance Office was unaware of subrecipient monitoring requirements for all federally funded subawards. Internal controls were not properly designed and the County was not in compliance with requirements. Questioned Costs: None noted. Effect: Federal funds may be used for purposes that are not in accordance with the terms of the grant agreement. Recommendation: We recommend the County review and enhance internal controls and procedures to ensure that all subrecipients are monitored and reviewed. Identification of Repeat Finding: This is a repeat finding. Views of Responsible Officials: Management agrees with the finding.
2023-009 – Subrecipient Monitoring – Internal Control and Compliance over Subrecipient Monitoring Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernadino Community Development and Housing Federal Award Identification Number: ADEL-21-1-05M/5262, ADEL-23-2-05Z/3679 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR 200.403 Factors affecting allowability of costs (g), the costs to be allowable must be adequately documented. Furthermore, pursuant to 2 CFR 200.332 Requirements for pass-through entities, the entities must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: a. Review financial and performance reports. b. Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. c. Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. d. Resolve audit findings specifically related to the subaward. Condition: For the fiscal year ended June 30, 2023, the City was unable to provide the complete and accurate documentation for the subrecipient-related expenditures which include the reimbursement package and proof of cash receipts. In relation to project ADEL-21-1-05M/5262, the reported $14,020 subrecipient’s personnel-related expenditure was lifted from the monthly status of expenditures monitoring file with $14,067 verified as grant amount. It was noted that the expenditures were incurred through June 30, 2022, and the related reimbursements were received through June 30, 2023. The audit team vouched the supporting remittance advices provided and identified only $4,720 related to the project. The remaining amount of $9,300 was unverified. As for project ADEL-23-2-05Z/3679, no support related to fiscal year 2023 was received, therefore, the reported amount of $18,253 could not be verified. Cause: The City did not have sufficient subrecipient monitoring policy and record-keeping requirements established. Effect or Potential Effect: Due to the insufficient documentation provided, the auditor was unable to verify the amounts reported related to the City’s subrecipients, resulting in questioned costs and findings of non-compliance. Questioned Costs: $27,553. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its subrecipient monitoring activities and establish a formal record-keeping policy to ensure complete and timely documentation of expenditures. Views of Responsible Officials: Management concurs with the finding.
Condition: During our test of (2) expenditures totaling $110,000, for the Coronavirus State and Local Fiscal Recovery Funds, it was noted the County did not have a subrecipient monitoring policy and did not obtain subrecipient agreements from (2) subrecipients comparing the following information: • Subrecipient name. • Subrecipient Authorized Representative and program contact information. • Subrecipient Employee Identification Number (EIN) and Data Universal Numbering System (DUNS) number. • Federal Award Identification Number (FAIN). • Name of Federal Awarding Agency. Contact information for the official at the Federal Awarding Agency. • Catalog of Assistance Listing (AL) number and name. • Federal award date. • Total amount of the federal award and indirect cost rate. • Federal award project description. • Start and end date of the agreement. • Amount of federal funds budgeted for the agreement and indirect cost rate allowed. • A statement that all activities must be in accordance with federal statutes, regulations, and terms and conditions of the federal award. The subrecipient should receive a copy of the award documents. • A detailed description of any additional requirements you want the subrecipient to be responsible for such as performance and/or financial reports, attending meetings and/or trainings, etc. • A statement about the monitoring activities, such as where/when they will take place; also include a statement indicating the subrecipient will collaborate on monitoring activities including providing requested financial documents. • A statement indicating if any of the items in the agreement change during the period of performance, the agreement will be amended. • Provide close out terms and conditions. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements. Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and implement internal controls to ensure compliance with these requirements. Management Response: Chairman of the Board of County Commissioners: This issue originated under the prior County Clerk’s administration where key reporting processes were not followed. The Board of County Commissioners and the other elected officials have made correcting this a top priority. Together, we are: • developing a comprehensive SOP to ensure accurate and timely tracking and reporting of Federal funds, • improving communication and oversight between all county offices to ensure consistent reporting standards, • and ensuring annual compliance with federal reporting requirements. Our collective goal is to implement the policies and structures that will keep Osage County operating with the highest standard of accountability and excellence County Clerk: I was not the County Clerk in office at this time. To correct this issue, the County plans to develop a SOP to timely and accurately track and report on Grants and Awards. The SOP will be reviewed, adopted, and monitored by the Board of County Commissioners. Criteria: 2 CFR 200, §200.332 Requirements for Pass-Through Entities 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 and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (2) 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. (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. (6) Appropriate terms and conditions concerning closeout of the subaward.
Material Weakness Finding No. 2023-002: Subrecipient Monitoring U.S. Department of Education Native Hawaiian Education Act Program Federal Assistance Listing Number 84.362A. U.S. Department of Health and Human Services Health Care for Native Hawaiians Federal Assistance Listing Number 93.932. Criteria Pursuant to Title 2, Subtitle A Chapter II, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), “a non-Federal entity may concurrently receive Federal awards as a recipient, subrecipient, and a contractor, depending on the substance of its agreements with the Federal awarding agencies and pass-through entities. Therefore, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor.” Condition We noted that the Organization did not make case-by-case determinations of each agreement with parties to which the Organization passed through Federal program funds to determine whether they were deemed to be either subrecipients or contractors. Cause Management had not updated its policies and procedures to incorporate the relevant Uniform Guidance subrecipient monitoring and management policies. Effect The lack of subrecipient monitoring and management policies of the Uniform Guidance could result in noncompliance by the Organization with the stipulated requirements for pass-through entities, as well as noncompliance of subrecipient requirements by the entities receiving the pass-through funds from the Organization. Identification of Repeat Finding This finding was reported as a federal award finding in the immediate previous audit as Finding No. 2022-002. Recommendation We recommend that the Organization incorporate the subrecipient monitoring and management provisions of 2 CFR §200.331 and 2 CFR §200.332 of the Uniform Guidance to their policies and procedures manual to ensure compliance with Federal standards.
Finding 2023-004 Department: United States Department of Housing and Urban Development Program Name: Emergency Solutions Grant Program Federal Assistance Listing Number: 14.231 Significant deficiency: Subrecipient monitoring Criteria: A pass-through entity must clearly identify to the subrecipient certain key information at the time of the subaward. These items include, but are not limited to, subrecipient name, subrecipient’s unique entity identifier, Federal Award Identification Number, federal award date, subaward period of performance start and end date, name of Federal awarding agency, and Assistance Listings number and title. Condition: While performing our audit of the Organization’s subrecipient monitoring, we noted not all required elements were included in the subaward agreement. Cause: The Organization included the majority of these required elements in the subaward and believed the information provided was adequate. Effect: Noncompliance may cause subrecipients to fail to report the federal funds received as required by the Uniform Guidance. Questioned Costs: None. Repeat Finding: Previously reported as finding 2022-003 Recommendation: We recommend the Organization develop agreements with subrecipients to properly reflect each of the required elements included in Part 2 CFR Part 200, Subpart D, section 200.332. View of Responsible Official: We agree with this finding and will include the relevant information in our subawards in the future.
Applicable federal program: U. S. Department of Health and Human Services, Family Planning Services (Title X), Assistance Listing #93.217, Contract Number: FPHPA006521-01-00, Contract Year: 04/01/22 – 03/31/23 Criteria: Subrecipient monitoring – 2 CFR §200.332(d) requires that the activities of subrecipients be monitored to ensure that subawards are used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Part of the required monitoring activities include following-up and ensuring that the subrecipient takes timely and appropriate action on Single Audit findings. Condition and context: Of the four subrecipients tested, we found that WHFPT did not obtain and review the Single Audit reports for one subrecipient. Effect: Without sufficient policies in place to review the single audits for each subrecipient, WHFPT has no way to ensure that findings, if any, are appropriately and timely addressed to ensure compliance with federal statutes, regulations, and the terms and conditions of the subaward. Recommendation: Implement policies to obtain the single audit reports for all subrecipients to ensure compliance with federal requirements and, where findings are reported, ensure that the subrecipient has taken appropriate actions to remedy the finding. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.
Applicable federal program: U. S. Department of Health and Human Services, Family Planning Services (Title X), Assistance Listing #93.217, Contract Number: FPHPA006521-01-00, Contract Year: 04/01/22 – 03/31/23 Criteria: Subrecipient monitoring – 2 CFR §200.332(d) requires that the activities of subrecipients be monitored to ensure that subawards are used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Part of the required monitoring activities include following-up and ensuring that the subrecipient takes timely and appropriate action on Single Audit findings. Condition and context: Of the four subrecipients tested, we found that WHFPT did not obtain and review the Single Audit reports for one subrecipient. Effect: Without sufficient policies in place to review the single audits for each subrecipient, WHFPT has no way to ensure that findings, if any, are appropriately and timely addressed to ensure compliance with federal statutes, regulations, and the terms and conditions of the subaward. Recommendation: Implement policies to obtain the single audit reports for all subrecipients to ensure compliance with federal requirements and, where findings are reported, ensure that the subrecipient has taken appropriate actions to remedy the finding. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number 21.027 Fedearl Award Program Year: January 1, 2022 - December 31, 2022 Pass-through Agency: Indiana Finance Authority Pass-through Number: Unknown Type of finding: significant deficiency in internal control over compliance, other matter. Criteria or Specific Requirement - Subrecipient Monitoring: Pursuant to 2 CFR § 200.331, non-Federal entities can award subawards for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. In addition, pursuant to 2 CFR 200.332, the non-Federal entity must identify to the subrecipient as a subaward and includes the Federal award identification. The non-Federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Fedderal statutes, regulations, and the terms and conditions of the subaward. Condition: The County could not provide support that it had sufficient review of the subrecipient during the year on a consistent basis. The County had not properly designed or implemented a system of internal controls that would likely be effective in preventing, detecting, and correcting, noncompliance. Question Costs: None Context: It was noted that the file selected for testing did not have documented evidence supporting that the County had sufficient monitoring and communication of the subrecipient. The file selected had a qualified opinion relating to their single audit that the County was wnaware. From a population of ten files, one was selected for testing. Our sample was not intended to be statistically valid. Effec: The County was unable to support that the subrecipients were being monitored. Cause: Failue to maintain sufficient monitoring of the subrecipient. Identification as a repeat finding: No Recommendation: We recommend that the County maintain adequate communication and documentation with the subrecipients to ensure compliance with the subrecipients requirement. This documentation could include a quarterly communication and receipt of the audited financial statements and single audit report, if applicable. Views of responsible officials and planned corrective action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support subrecipient monitoring processes are in place. Person responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agency: U.S. Department of the Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number 21.027 Fedearl Award Program Year: January 1, 2022 - December 31, 2022 Pass-through Agency: Indiana Finance Authority Pass-through Number: Unknown Type of finding: significant deficiency in internal control over compliance, other matter. Criteria or Specific Requirement - Subrecipient Monitoring: Pursuant to 2 CFR § 200.331, non-Federal entities can award subawards for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. In addition, pursuant to 2 CFR 200.332, the non-Federal entity must identify to the subrecipient as a subaward and includes the Federal award identification. The non-Federal entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Fedderal statutes, regulations, and the terms and conditions of the subaward. Condition: The County could not provide support that it had sufficient review of the subrecipient during the year on a consistent basis. The County had not properly designed or implemented a system of internal controls that would likely be effective in preventing, detecting, and correcting, noncompliance. Question Costs: None Context: It was noted that the file selected for testing did not have documented evidence supporting that the County had sufficient monitoring and communication of the subrecipient. The file selected had a qualified opinion relating to their single audit that the County was wnaware. From a population of ten files, one was selected for testing. Our sample was not intended to be statistically valid. Effec: The County was unable to support that the subrecipients were being monitored. Cause: Failue to maintain sufficient monitoring of the subrecipient. Identification as a repeat finding: No Recommendation: We recommend that the County maintain adequate communication and documentation with the subrecipients to ensure compliance with the subrecipients requirement. This documentation could include a quarterly communication and receipt of the audited financial statements and single audit report, if applicable. Views of responsible officials and planned corrective action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support subrecipient monitoring processes are in place. Person responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.332 states- All pass-through entities must ensure that every subaward is clearly identified to the subrecipient and includes the following information at the time of the subaward as follows: (1) Federal award identification, (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 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) 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 (5) Appropriate terms and conditions concerning the closeout of the subaward. Condition: We noted that, for all five subrecipients tested, subaward agreements did not include the award information required under 2 CFR 200.332. Cause: Subaward agreements were not properly written and appropriately reviewed to ensure all required award information was included. Effect or Potential Effect: Denver Department of Public Health and Environment (DDPHE) was not in compliance with subrecipient requirements outlined in 2 CFR Section 200.332. Furthermore, not communicating proper compliance requirements and other information may increase the likelihood of noncompliance on the part of the subrecipient and non-fulfillment of program goals and objectives. In addition, this also increases the risk the subrecipient may not understand they are receiving Federal funds, which could result in subrecipients failing to comply with the Uniform Guidance or pass-through entity requirements for the award. Questioned Costs: None Context: BDO selected five subawards totaling to $875,589 to test from a population of 11 subawards totaling to $1,084,199. BDO noted that all five subawards tested did not include the required Federal award identification or applicability of audit requirements. This is a condition identified per review of the City?s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: DDPHE should revise subaward agreements to include specific Federal award identification information and language clearly stating applicable audit requirements subrecipients must comply with to ensure all agreements are in compliance with the requirements in 2 CFR Section 200.332. Views of Responsible Officials: The City agrees with the finding and DDPHE will consult with the City?s Federal Grants Manager and other parties to review the current standard contract provisions and will modify those provisions accordingly. For additional information, see the City?s separate report for planned corrective actions.
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 2022-001: 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 2022-001: 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 2022-001: 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.