2022-002 - Subrecipient Monitoring Federal Program Information: CFDA - 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.214 is the requirement of a Debarment and Suspension Search on subrecipients and 2 CFR 200.332(a) which includes what must be included in the subaward agreements and monitoring requirements. Condition: During audit procedures, it was identified that the County’s uses the ARPA program statement for the subrecipient monitoring policy and procedure and does not have a separate subrecipient policy and procedure, which has not been an effective method. The subawards did not include the required Federal Award Identification number, Assistance Listing Number, no mention of the approved indirect cost rate. The subrecipient monitoring documentation did not provide any indication of review of the financial reports, whether or not there were any deficiencies, corrective actions if needed, management letter comments/finding if needed, and no verification as to whether the subrecipient would need a single audit. Cause: The County does not have the necessary internal controls over subrecipient monitoring compliance requirements. The lack of experience and knowledge of the program may be a key factor in the lack of internal controls. Effect: As a pass-through entity the County is not providing the necessary federal identification information, nor is it properly monitoring the subrecipients for the required compliance requirements of the program. This increases the likelihood of ineligible subrecipients that are on the Debarment and Suspension list to receive federal funds and the likelihood of misuse of federal funds and noncompliance with the requirements of the program. Increasing the likelihood of loss of funding and inability to receive future funding. Identification of Questioned Costs: Identified Subrecipient award Payments totaled $264,943.38. For which no Debarment or Suspension search was done, none of the monitoring requirements appeared to be performed on any of the subrecipients tested and one subrecipient did not go thru the application process for proper vetting. Context: All Five of the Seven Subrecipients receiving funding during FY22 were reviewed. None of the Five were searched in SAM.gov for Debarment and Suspension. 1 was approved without applying for the funds, none were properly monitored for compliance requirements. All Five subawards were missing the Federal Award Identification Number, ALN, indirect cost rate. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the County write their own policy and procedure for subrecipient monitoring and implement a process to include a debarment and suspension search for all subrecipients on sam.gov to ensure compliance with federal requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the County of Aroostook, Maine.
2022-004 – Subrecipient Monitoring Program: Congressional Appropriations Program (ALN 99.U19) Federal Agency: United States Department of Treasury Criteria: 2 CFR part 200.332 require that all pass-through entities must ensure that every sub-award is clearly identified to the subrecipient as a sub-award and includes the following information at the time of the sub-award and if any of these data elements change, include the changes in subsequent sub-award 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 sub-award. Required information includes (1) Federal Award Identification (i) subrecipient name; (ii) subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date of award to the recipient by the Federal agency (v) sub-award period of performance state and end date; (vi) amount of Federal funds obligated by this action by the pass-through entity to the subrecipient; (vii) total amount of federal funds obligated to the subrecipient by the pass-through entity including the current obligations; (viii) total amount of the federal award committed to the subrecipient by the pass-through entity; (ix) federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (x) name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xi) ALN number and name; (xii) identification of whether the award is R&D; and (xiii) indirect cost rate for the Federal Award. Condition: The Organization did not include all required information in the subaward agreement per 2 CFR part 200.332. Cause: The Organization does not have effective controls in place to ensure sub-awards contain all required information. Effect: Subgrantees may not have the information needed to identify a subaward as federal funding to ensure compliance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and specific federal program requirements. Questioned Costs: None Context: The Organization issued 20 subawards during the year. Of the 4 subaward agreements selected for testing through non-statistical sampling, all 4 were missing one or more elements required to be included in subaward agreements under 2 CFR 200.332. Repeat Finding: No Recommendation: We recommend that the Organization review and enhance their current procedures to ensure all requirements found in 2 CFR section 200.332 are present in subaward agreements. Views of Responsible Officials: See Corrective Action Plan.
2022-005 – Subrecipient Monitoring Program: Congressional Appropriations Program (ALN 99.U19) Federal Agency: United States Department of Treasury Criteria: In accordance with 2 CFR part 200.332(e) pass-through entities must monitor the activities of the 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 accordance with 2 CFR part 200.303(a), nonfederal entities receiving federal awards must establish, document, and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include ensuring on-site review procedures are performed in a timely manner, are designed to monitor fiscal controls, and are performed to ensure compliance with program regulations. Condition: The Organization enters into agreements with subrecipients and, as part of its subrecipient monitoring procedures, requires subrecipients to submit quarterly vouchers and audited financial statements. However, the Organization did not consistently maintain evidence that audited financial statements were obtained and reviewed or that quarterly vouchers were reviewed and reconciled to amounts reported by subrecipients in the Online Reporting System. Cause: Management did not implement adequate procedures to ensure that required subrecipient monitoring activities were performed and documented in accordance with the Organization’s policies and 2 CFR 200.332(e). Effect: Failure to conduct monitoring of subrecipients results in noncompliance with 2 CFR part 200.332(e) and a failure of the internal control environment surrounding subrecipient monitoring. In addition, failure to conduct monitoring of subrecipients could result in disallowed costs. Questioned Costs: Undetermined Context: The Organization issued 20 subawards during the year. Of the 4 subrecipients selected for testing through nonstatistical sampling, 1 subrecipient lacked evidence that audited financial statements were obtained and reviewed. In addition, for 4 out of 4 subrecipients tested, the Organization did not maintain evidence that quarterly vouchers were reviewed and reconciled to amounts reported by the subrecipients in the Online Reporting System. Repeat Finding: No Recommendation: We recommend that the Organization review and enhance their current procedures to ensure monitoring procedures are documented and maintained. Views of Responsible Officials: See Corrective Action Plan.
Finding 2022-001 Assistance Listing Number: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Award Numbers/Years: ARPA 21-413010 / 2021-2022 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: Out of the three executed subrecipient agreements selected for testing, none of them included the subaward information required by the Uniform Guidance. Our sample was not statistically valid. Effect: Subrecipients may not receive the appropriate subaward information. Questioned Costs: None noted. Cause: The County did not have a process to ensure that the subaward information was included in the subrecipient contracts for this award. Recommendation: We recommend the County develop a template with the required subaward information and share it with the subrecipients of this award program. In addition, this process should be incorporated into the regular subrecipient contracting procedures. Views of Responsible Officials: Lake County acknowledges that subaward information required by the Uniform Guidance was not provided to subrecipients in a separate notice. The County had previously incorporated the information in various clauses of the contracts/agreements with each subrecipient. The County has since developed a single notification form with the required subaward information which it includes with the initial contract and upon any modifications or change orders.
Subrecipient Monitoring Federal Department ? U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing # 93.391 County Department ? Department of Public Health Finding 2022 ? 009 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D?Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that ?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?Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; 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 Section 200.208 Specific conditions. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F?Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.? SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (Continued) Subrecipient Monitoring Federal Department ? U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing # 93.391 County Department ? Department of Public Health Finding 2022 ? 009 (Continued) CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not perform adequate monitoring of its subrecipients as required by Federal regulations. CAUSE Based on discussions with management, the cause of this finding resulted from subrecipients being identified as vendors in the grant application. Also, the Program Lead informed Finance late which did not allow sufficient time to mobilize CCH staff and/or external consultant to perform subrecipient monitoring. EFFECT Failure to adequately communicate and monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and DPH?s inability to adequately perform risk assessments on its subrecipient(s). QUESTIONED COSTS None. CONTEXT During the current audit period, we noted 27 subrecipients were awarded funds. During our review of 6 subrecipients, we noted adequate documentation was not maintained to support both the financial and programmatic monitoring of these subrecipients. Specifically, we noted documentation was not maintained to support DPH?s evaluation of each subrecipients risk of noncompliance and the frequency of monitoring to be conducted by DPH based on the assessed risk. Also, we noted no documentation was provided to verify whether the subrecipients were required to have a Single Audit conducted, including DPH?s review of the report, and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (Continued) Subrecipient Monitoring Federal Department ? U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing # 93.391 County Department ? Department of Public Health Finding 2022 ? 009 (Continued) CONTEXT (Continued) In addition, while we noted that DPH does have a draft policy manual regarding the monitoring of its subrecipients, we noted the manual does not currently address or include the process and related procedures for conducting both fiscal and programmatic monitoring. Specifically, the draft manual does not: a) include any related checklists and/or forms being utilized, b) address the performance of risk assessments, or c) detail the frequency and type of monitoring (i.e., desk review, site visit) to be conducted based on assessed risks. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend DPH update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332 and once updated the draft policy should be finalized and implemented. Also, adequate staff resources and training should be in place to oversee the process of completing the required subrecipient monitoring, including documentation of the evaluation of the subrecipient risk of noncompliance and review of the Single Audit report, as required by federal regulations. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County?s corrective action plan is on page 64.
Finding 2022-001 Assistance Listing Number: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Award Numbers/Years: ARPA 21-413010 / 2021-2022 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: Out of the three executed subrecipient agreements selected for testing, none of them included the subaward information required by the Uniform Guidance. Our sample was not statistically valid. Effect: Subrecipients may not receive the appropriate subaward information. Questioned Costs: None noted. Cause: The County did not have a process to ensure that the subaward information was included in the subrecipient contracts for this award. Recommendation: We recommend the County develop a template with the required subaward information and share it with the subrecipients of this award program. In addition, this process should be incorporated into the regular subrecipient contracting procedures. Views of Responsible Officials: Lake County acknowledges that subaward information required by the Uniform Guidance was not provided to subrecipients in a separate notice. The County had previously incorporated the information in various clauses of the contracts/agreements with each subrecipient. The County has since developed a single notification form with the required subaward information which it includes with the initial contract and upon any modifications or change orders.
Subrecipient Monitoring Federal Department ? U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing # 93.391 County Department ? Department of Public Health Finding 2022 ? 009 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D?Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that ?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?Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; 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 Section 200.208 Specific conditions. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F?Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.? SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (Continued) Subrecipient Monitoring Federal Department ? U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing # 93.391 County Department ? Department of Public Health Finding 2022 ? 009 (Continued) CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not perform adequate monitoring of its subrecipients as required by Federal regulations. CAUSE Based on discussions with management, the cause of this finding resulted from subrecipients being identified as vendors in the grant application. Also, the Program Lead informed Finance late which did not allow sufficient time to mobilize CCH staff and/or external consultant to perform subrecipient monitoring. EFFECT Failure to adequately communicate and monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and DPH?s inability to adequately perform risk assessments on its subrecipient(s). QUESTIONED COSTS None. CONTEXT During the current audit period, we noted 27 subrecipients were awarded funds. During our review of 6 subrecipients, we noted adequate documentation was not maintained to support both the financial and programmatic monitoring of these subrecipients. Specifically, we noted documentation was not maintained to support DPH?s evaluation of each subrecipients risk of noncompliance and the frequency of monitoring to be conducted by DPH based on the assessed risk. Also, we noted no documentation was provided to verify whether the subrecipients were required to have a Single Audit conducted, including DPH?s review of the report, and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (Continued) Subrecipient Monitoring Federal Department ? U.S. Department of Health and Human Services Federal Award Identification Number and Year: NH75OT000024 and 2021 COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Federal Assistance Listing # 93.391 County Department ? Department of Public Health Finding 2022 ? 009 (Continued) CONTEXT (Continued) In addition, while we noted that DPH does have a draft policy manual regarding the monitoring of its subrecipients, we noted the manual does not currently address or include the process and related procedures for conducting both fiscal and programmatic monitoring. Specifically, the draft manual does not: a) include any related checklists and/or forms being utilized, b) address the performance of risk assessments, or c) detail the frequency and type of monitoring (i.e., desk review, site visit) to be conducted based on assessed risks. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend DPH update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332 and once updated the draft policy should be finalized and implemented. Also, adequate staff resources and training should be in place to oversee the process of completing the required subrecipient monitoring, including documentation of the evaluation of the subrecipient risk of noncompliance and review of the Single Audit report, as required by federal regulations. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County?s corrective action plan is on page 64.
2022-001 – Communications with Subrecipients Finding Type: Significant Deficiency in internal control over compliance Program: ALN 93.959 – SAPT COVID Supplement ALN 93.959 – Prevention, Women’s Specialty Services, Administration ALN 93.959 – Treatment/AMS Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the Entity update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2022-001 – Communications with Subrecipients Finding Type: Significant Deficiency in internal control over compliance Program: ALN 93.959 – SAPT COVID Supplement ALN 93.959 – Prevention, Women’s Specialty Services, Administration ALN 93.959 – Treatment/AMS Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the Entity update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2022-001 – Communications with Subrecipients Finding Type: Significant Deficiency in internal control over compliance Program: ALN 93.959 – SAPT COVID Supplement ALN 93.959 – Prevention, Women’s Specialty Services, Administration ALN 93.959 – Treatment/AMS Criteria: As required by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: Contracts with subrecipients did not include portions of required disclosures. Cause/Effect: Inadequate internal controls over compliance. Select contracts were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the Entity update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2022-002: Subrecipient Monitoring Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Social Services Federal Assistance Listing Number: 93.558 Program Title: Temporary Assistance for Needy Families Pass-through Entity Identifying Number: CS200821001 Award Year: 2021-2022; 2022-2023 Questioned Costs: None Criteria: The Uniform Guidance at 2 CFR 200.332(d) requires non-federal entities providing federal funds to subrecipients to ?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.? As part of the organization?s monitoring procedures, on-site monitoring visits of each subrecipients SkillUp program performance are to be conducted each year to ensure compliance with the state of Missouri SkillUp Provider Handbook. Condition: The organization did not conduct on-site monitoring of SkillUp subrecipients during the fiscal year. Cause: The organization had turnover in the Executive Director and program management positions during the fiscal year. The monitoring is typically performed in the summer but the SkillUp Program Manager left in the summer of 2022 prior to conducting the monitoring, and the process of finding and training a replacement took some time. Effect: The lack of on-site monitoring or the performance of alternative procedures inhibits the organizations ability to ensure that subrecipients are complying with the requirements of the federal program. Recommendation: We recommend that the organization implement internal controls over the subrecipient monitoring process to ensure that on-site visits or adequate alternative procedures are in place to ensure subrecipient compliance with the requirements of federal programs.
FINDING 2022-037 Crime Victim Assistance, ALN 16.575, Subrecipient Monitoring - Risk Assessment and During-the-Award Monitoring See Schedule of Findings and Questioned Costs for chart/table. Condition MDHHS did not sufficiently monitor and evaluate the risk of noncompliance with program requirements. We noted: a. MDHHS did not sufficiently monitor service activity for 3 (14%) of 21 subrecipients during fiscal year 2022. For 2 of the 3 subrecipients, MDHHS did not monitor the service activity for all quarters of fiscal year 2022. For 1 of the 3 subrecipients, MDHHS did not require the subrecipient to provide service activity data for its review. b. MDHHS did not evaluate 1 (5%) of 21 subrecipient's risk of noncompliance with program requirements to determine and implement the type of monitoring appropriate for the subrecipient. Criteria Federal regulation 2 CFR 200.332(d) requires MDHHS to monitor the activities of the subrecipient as necessary to ensure 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. In addition, federal regulation 2 CFR 200.332(b) requires MDHHS to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. As part of its monitoring procedures, MDHHS reviews subrecipient service activity data. Cause For part a., MDHHS informed us data was reviewed and certified by the grantee, but MDHHS did not document its review in the log. For the service activity data that was not reviewed, MDHHS believed the administrative portion of the Crime Victims Assistance funds did not require service activity reports. For part b., MDHHS informed us it completes its annual risk assessment by November 15 and adjusts its monitoring plan for any awards issued through March 31. The grant agreement commenced May 1, 2022 and continued through September 30, 2022 and, therefore, was not included in the fiscal year 2022 monitoring plan. Effect Insufficient monitoring and evaluation of subrecipients could increase the subrecipients' and MDHHS's noncompliance with federal statutes, regulations, or the terms and conditions of federal awards. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDHHS sufficiently monitor and evaluate the risk of noncompliance with program requirements. Management Views MDHHS agrees with the finding.
FINDING 2022-040 Formula Grants for Rural Areas and Tribal Transit Program, ALN 20.509, Subrecipient Monitoring - Subrecipient Audits See Schedule of Findings and Questioned Costs for chart/table. Condition MDOT did not ensure its review of subrecipient single audit* reports and issuance of management decisions were completed within six months of the Federal Audit Clearinghouse (FAC) acceptance date. MDOT's process is to begin its review of subrecipient single audits after all applicable audits are received. Therefore, it reviewed the 2020 and 2021 single audits in March 2022 and March and April 2023, respectively. We noted: a. For all 9 sampled 2020 single audits, MDOT's reviews were not timely and ranged between 72 and 229 days late. b. MDOT had not reviewed any of its subrecipient 2021 single audits as of September 30, 2022, which should have been reviewed between June 2022 and September 2022. In addition, MDOT did not issue management decision letters within six months of the FAC acceptance date for 3 subrecipient single audit reports. Each of these reports contained material weaknesses. Criteria Federal regulation 2 CFR 200.501 requires nonfederal entities who expend $750,000 or more in federal awards during their fiscal year to obtain a single audit for that fiscal year. Also, federal regulation 2 CFR 200.332(f) requires the pass-through entity to verify these subrecipients are audited as required by Subpart F of the Uniform Guidance, Audit Requirements, when it is expected the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the $750,000 threshold. In addition, federal regulation 2 CFR 200.521 requires MDOT to issue a management decision letter on the appropriateness of all audit findings related to its federal awards and the subrecipient's corrective action plan within six months of acceptance by the FAC. Cause MDOT informed us an oversight occurred due to employee turnover and the need to update its procedures. Effect MDOT limited the State's assurance its subrecipients complied with grant requirements and implemented corrective action for audit findings to prevent future sanctions or disallowed costs, which could necessitate adjustments to MDOT's records. The federal grantor agency could issue sanctions or disallowance related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDOT ensure its review of subrecipient single audit reports and issuance of management decisions are completed within six months of the FAC acceptance date. Management Views MDOT agrees with the finding.
FINDING 2022-040 Formula Grants for Rural Areas and Tribal Transit Program, ALN 20.509, Subrecipient Monitoring - Subrecipient Audits See Schedule of Findings and Questioned Costs for chart/table. Condition MDOT did not ensure its review of subrecipient single audit* reports and issuance of management decisions were completed within six months of the Federal Audit Clearinghouse (FAC) acceptance date. MDOT's process is to begin its review of subrecipient single audits after all applicable audits are received. Therefore, it reviewed the 2020 and 2021 single audits in March 2022 and March and April 2023, respectively. We noted: a. For all 9 sampled 2020 single audits, MDOT's reviews were not timely and ranged between 72 and 229 days late. b. MDOT had not reviewed any of its subrecipient 2021 single audits as of September 30, 2022, which should have been reviewed between June 2022 and September 2022. In addition, MDOT did not issue management decision letters within six months of the FAC acceptance date for 3 subrecipient single audit reports. Each of these reports contained material weaknesses. Criteria Federal regulation 2 CFR 200.501 requires nonfederal entities who expend $750,000 or more in federal awards during their fiscal year to obtain a single audit for that fiscal year. Also, federal regulation 2 CFR 200.332(f) requires the pass-through entity to verify these subrecipients are audited as required by Subpart F of the Uniform Guidance, Audit Requirements, when it is expected the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the $750,000 threshold. In addition, federal regulation 2 CFR 200.521 requires MDOT to issue a management decision letter on the appropriateness of all audit findings related to its federal awards and the subrecipient's corrective action plan within six months of acceptance by the FAC. Cause MDOT informed us an oversight occurred due to employee turnover and the need to update its procedures. Effect MDOT limited the State's assurance its subrecipients complied with grant requirements and implemented corrective action for audit findings to prevent future sanctions or disallowed costs, which could necessitate adjustments to MDOT's records. The federal grantor agency could issue sanctions or disallowance related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDOT ensure its review of subrecipient single audit reports and issuance of management decisions are completed within six months of the FAC acceptance date. Management Views MDOT agrees with the finding.
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-042 Education Stabilization Fund, ALN 84.425, Subrecipient Monitoring - During-the-Award Monitoring Procedures See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not complete sufficient during-the-award monitoring procedures in fiscal year 2022. MDE provided its subrecipients a two-year grant and notified its subrecipients in their grant award notification that a final expenditure report (FER) was due by August 29, 2022. As of September 30, 2022, MDE received 1,335 (78%) of 1,717 FERs for the two-year grant. In addition, MDE contracted with a vendor to conduct desk reviews of ESF subrecipients beginning in July 2022. We noted: a. MDE did not complete any reviews of the FERs submitted during fiscal year 2022. We determined subrecipients submitted 990 (58%) FERs by August 29, 2022. b. Neither MDE nor its contractor could provide documentation supporting the subrecipient desk reviews finalized and whether any corrective action was required or enforcement action was taken against noncompliant subrecipients during fiscal year 2022. Criteria Federal regulation 2 CFR 200.303 requires the nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of federal awards. In addition, federal regulation 2 CFR 200.332(d) states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and performance reports required by the pass-through entity. ? Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address single audit findings related to the particular subaward. Federal regulation 2 CFR 200.332(h) states that all pass-through entities must consider taking enforcement action against noncompliant subrecipients. MDE's grant award notifications required ESF subrecipients to submit a FER by August 29, 2022. MDE contracted for the completion of subrecipient desk reviews. Cause MDE elected to delay its review of FERs until all FERs were received. Also, because MDE's contracted desk reviews did not begin until July 2022, it was unable to finalize any individual subrecipient reviews by September 30, 2022. Effect MDE may not identify in a timely manner subrecipients that used funds for unauthorized purposes. We consider this to be a material weakness and material noncompliance because of lack of during-the-award monitoring activities. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE complete sufficient during-the-award monitoring of ESF subrecipients. Management Views For part a., MDE partially agrees with the finding. MDE acknowledges that it did not complete any reviews of the FERs submitted during fiscal year 2022. However, the Uniform Guidance does not specify a timeframe for the review of FERs for ESF funds and the ESF program is inherently more flexible than other federal programs in this regard. Although grant award notifications (GANs) originally required ESF subrecipients to submit a FER by August 29, 2022, MDE communicated to ESF subrecipients after the initial GANs that the August 29, 2022 due date was subject to change due to the continuously changing rules and requirements around this funding, including extension possibilities such as late liquidation. ESF FERs were due either within 60 days of full draw of the funds or within 60 days of the end of the award period, which could have been during the State's fiscal year 2022 or well after September 30, 2022. For this reason, under Uniform Guidance, MDE had the authority to delay the review of FERs until closer to the end date of the award. In the case of late liquidation, the U.S. Department of Education provided notification that extended the award period as far as 14 months beyond the original end date of the award. For part b., MDE partially agrees with the finding. MDE acknowledges that subrecipient desk reviews were not finalized; however, the majority of the subrecipient monitoring was complete. The Uniform Guidance does not specify a timeframe for ESF subrecipient monitoring to occur and no requirement or expectation was made that monitoring would be finalized by MDE management by September 30, 2022. While the MDE contractor was not tracking completion against the date of September 30, 2022, documentation was and is still available, upon request from the OAG, to demonstrate the substantial ongoing monitoring activities, such as desk reviews and review of amendments, as of the end of the State's fiscal year 2022. The Compliance Team was in regular contact with MDE throughout the monitoring process. The Compliance Team provided regular updates leading up to September 30, 2022 and shared comprehensive preliminary results with the department soon after September 30, 2022. Auditor's Comments to Management Views We determined, and MDE acknowledged, it did not complete any FER reviews or finalize any desk reviews as part of its during-the-award monitoring activities for the $1.8 billion provided to subrecipients in fiscal year 2022. In addition, the contractor acknowledged it did not have a tracking mechanism in place identifying when desk reviews were completed, consequently documentation did not exist to validate MDE's assertion that a majority of the subrecipient monitoring was complete. Federal regulation 2 CFR 200 Subpart F requires the SOM single audit be conducted annually in accordance with the State's fiscal year, which represents the period covered by the auditor's compliance opinion. Therefore, sufficient appropriate evidence must exist during the audit period to determine whether MDE complied with the subrecipient monitoring requirement identified as subject to audit in the OMB Compliance Supplement. Sufficient appropriate evidence did not exist in fiscal year 2022 to support compliance with federal regulation 2 CFR 200.332(d). Therefore, the finding stands as written.
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-042 Education Stabilization Fund, ALN 84.425, Subrecipient Monitoring - During-the-Award Monitoring Procedures See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not complete sufficient during-the-award monitoring procedures in fiscal year 2022. MDE provided its subrecipients a two-year grant and notified its subrecipients in their grant award notification that a final expenditure report (FER) was due by August 29, 2022. As of September 30, 2022, MDE received 1,335 (78%) of 1,717 FERs for the two-year grant. In addition, MDE contracted with a vendor to conduct desk reviews of ESF subrecipients beginning in July 2022. We noted: a. MDE did not complete any reviews of the FERs submitted during fiscal year 2022. We determined subrecipients submitted 990 (58%) FERs by August 29, 2022. b. Neither MDE nor its contractor could provide documentation supporting the subrecipient desk reviews finalized and whether any corrective action was required or enforcement action was taken against noncompliant subrecipients during fiscal year 2022. Criteria Federal regulation 2 CFR 200.303 requires the nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of federal awards. In addition, federal regulation 2 CFR 200.332(d) states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and performance reports required by the pass-through entity. ? Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address single audit findings related to the particular subaward. Federal regulation 2 CFR 200.332(h) states that all pass-through entities must consider taking enforcement action against noncompliant subrecipients. MDE's grant award notifications required ESF subrecipients to submit a FER by August 29, 2022. MDE contracted for the completion of subrecipient desk reviews. Cause MDE elected to delay its review of FERs until all FERs were received. Also, because MDE's contracted desk reviews did not begin until July 2022, it was unable to finalize any individual subrecipient reviews by September 30, 2022. Effect MDE may not identify in a timely manner subrecipients that used funds for unauthorized purposes. We consider this to be a material weakness and material noncompliance because of lack of during-the-award monitoring activities. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE complete sufficient during-the-award monitoring of ESF subrecipients. Management Views For part a., MDE partially agrees with the finding. MDE acknowledges that it did not complete any reviews of the FERs submitted during fiscal year 2022. However, the Uniform Guidance does not specify a timeframe for the review of FERs for ESF funds and the ESF program is inherently more flexible than other federal programs in this regard. Although grant award notifications (GANs) originally required ESF subrecipients to submit a FER by August 29, 2022, MDE communicated to ESF subrecipients after the initial GANs that the August 29, 2022 due date was subject to change due to the continuously changing rules and requirements around this funding, including extension possibilities such as late liquidation. ESF FERs were due either within 60 days of full draw of the funds or within 60 days of the end of the award period, which could have been during the State's fiscal year 2022 or well after September 30, 2022. For this reason, under Uniform Guidance, MDE had the authority to delay the review of FERs until closer to the end date of the award. In the case of late liquidation, the U.S. Department of Education provided notification that extended the award period as far as 14 months beyond the original end date of the award. For part b., MDE partially agrees with the finding. MDE acknowledges that subrecipient desk reviews were not finalized; however, the majority of the subrecipient monitoring was complete. The Uniform Guidance does not specify a timeframe for ESF subrecipient monitoring to occur and no requirement or expectation was made that monitoring would be finalized by MDE management by September 30, 2022. While the MDE contractor was not tracking completion against the date of September 30, 2022, documentation was and is still available, upon request from the OAG, to demonstrate the substantial ongoing monitoring activities, such as desk reviews and review of amendments, as of the end of the State's fiscal year 2022. The Compliance Team was in regular contact with MDE throughout the monitoring process. The Compliance Team provided regular updates leading up to September 30, 2022 and shared comprehensive preliminary results with the department soon after September 30, 2022. Auditor's Comments to Management Views We determined, and MDE acknowledged, it did not complete any FER reviews or finalize any desk reviews as part of its during-the-award monitoring activities for the $1.8 billion provided to subrecipients in fiscal year 2022. In addition, the contractor acknowledged it did not have a tracking mechanism in place identifying when desk reviews were completed, consequently documentation did not exist to validate MDE's assertion that a majority of the subrecipient monitoring was complete. Federal regulation 2 CFR 200 Subpart F requires the SOM single audit be conducted annually in accordance with the State's fiscal year, which represents the period covered by the auditor's compliance opinion. Therefore, sufficient appropriate evidence must exist during the audit period to determine whether MDE complied with the subrecipient monitoring requirement identified as subject to audit in the OMB Compliance Supplement. Sufficient appropriate evidence did not exist in fiscal year 2022 to support compliance with federal regulation 2 CFR 200.332(d). Therefore, the finding stands as written.
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-042 Education Stabilization Fund, ALN 84.425, Subrecipient Monitoring - During-the-Award Monitoring Procedures See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not complete sufficient during-the-award monitoring procedures in fiscal year 2022. MDE provided its subrecipients a two-year grant and notified its subrecipients in their grant award notification that a final expenditure report (FER) was due by August 29, 2022. As of September 30, 2022, MDE received 1,335 (78%) of 1,717 FERs for the two-year grant. In addition, MDE contracted with a vendor to conduct desk reviews of ESF subrecipients beginning in July 2022. We noted: a. MDE did not complete any reviews of the FERs submitted during fiscal year 2022. We determined subrecipients submitted 990 (58%) FERs by August 29, 2022. b. Neither MDE nor its contractor could provide documentation supporting the subrecipient desk reviews finalized and whether any corrective action was required or enforcement action was taken against noncompliant subrecipients during fiscal year 2022. Criteria Federal regulation 2 CFR 200.303 requires the nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of federal awards. In addition, federal regulation 2 CFR 200.332(d) states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and performance reports required by the pass-through entity. ? Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address single audit findings related to the particular subaward. Federal regulation 2 CFR 200.332(h) states that all pass-through entities must consider taking enforcement action against noncompliant subrecipients. MDE's grant award notifications required ESF subrecipients to submit a FER by August 29, 2022. MDE contracted for the completion of subrecipient desk reviews. Cause MDE elected to delay its review of FERs until all FERs were received. Also, because MDE's contracted desk reviews did not begin until July 2022, it was unable to finalize any individual subrecipient reviews by September 30, 2022. Effect MDE may not identify in a timely manner subrecipients that used funds for unauthorized purposes. We consider this to be a material weakness and material noncompliance because of lack of during-the-award monitoring activities. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE complete sufficient during-the-award monitoring of ESF subrecipients. Management Views For part a., MDE partially agrees with the finding. MDE acknowledges that it did not complete any reviews of the FERs submitted during fiscal year 2022. However, the Uniform Guidance does not specify a timeframe for the review of FERs for ESF funds and the ESF program is inherently more flexible than other federal programs in this regard. Although grant award notifications (GANs) originally required ESF subrecipients to submit a FER by August 29, 2022, MDE communicated to ESF subrecipients after the initial GANs that the August 29, 2022 due date was subject to change due to the continuously changing rules and requirements around this funding, including extension possibilities such as late liquidation. ESF FERs were due either within 60 days of full draw of the funds or within 60 days of the end of the award period, which could have been during the State's fiscal year 2022 or well after September 30, 2022. For this reason, under Uniform Guidance, MDE had the authority to delay the review of FERs until closer to the end date of the award. In the case of late liquidation, the U.S. Department of Education provided notification that extended the award period as far as 14 months beyond the original end date of the award. For part b., MDE partially agrees with the finding. MDE acknowledges that subrecipient desk reviews were not finalized; however, the majority of the subrecipient monitoring was complete. The Uniform Guidance does not specify a timeframe for ESF subrecipient monitoring to occur and no requirement or expectation was made that monitoring would be finalized by MDE management by September 30, 2022. While the MDE contractor was not tracking completion against the date of September 30, 2022, documentation was and is still available, upon request from the OAG, to demonstrate the substantial ongoing monitoring activities, such as desk reviews and review of amendments, as of the end of the State's fiscal year 2022. The Compliance Team was in regular contact with MDE throughout the monitoring process. The Compliance Team provided regular updates leading up to September 30, 2022 and shared comprehensive preliminary results with the department soon after September 30, 2022. Auditor's Comments to Management Views We determined, and MDE acknowledged, it did not complete any FER reviews or finalize any desk reviews as part of its during-the-award monitoring activities for the $1.8 billion provided to subrecipients in fiscal year 2022. In addition, the contractor acknowledged it did not have a tracking mechanism in place identifying when desk reviews were completed, consequently documentation did not exist to validate MDE's assertion that a majority of the subrecipient monitoring was complete. Federal regulation 2 CFR 200 Subpart F requires the SOM single audit be conducted annually in accordance with the State's fiscal year, which represents the period covered by the auditor's compliance opinion. Therefore, sufficient appropriate evidence must exist during the audit period to determine whether MDE complied with the subrecipient monitoring requirement identified as subject to audit in the OMB Compliance Supplement. Sufficient appropriate evidence did not exist in fiscal year 2022 to support compliance with federal regulation 2 CFR 200.332(d). Therefore, the finding stands as written.
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-042 Education Stabilization Fund, ALN 84.425, Subrecipient Monitoring - During-the-Award Monitoring Procedures See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not complete sufficient during-the-award monitoring procedures in fiscal year 2022. MDE provided its subrecipients a two-year grant and notified its subrecipients in their grant award notification that a final expenditure report (FER) was due by August 29, 2022. As of September 30, 2022, MDE received 1,335 (78%) of 1,717 FERs for the two-year grant. In addition, MDE contracted with a vendor to conduct desk reviews of ESF subrecipients beginning in July 2022. We noted: a. MDE did not complete any reviews of the FERs submitted during fiscal year 2022. We determined subrecipients submitted 990 (58%) FERs by August 29, 2022. b. Neither MDE nor its contractor could provide documentation supporting the subrecipient desk reviews finalized and whether any corrective action was required or enforcement action was taken against noncompliant subrecipients during fiscal year 2022. Criteria Federal regulation 2 CFR 200.303 requires the nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of federal awards. In addition, federal regulation 2 CFR 200.332(d) states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and performance reports required by the pass-through entity. ? Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address single audit findings related to the particular subaward. Federal regulation 2 CFR 200.332(h) states that all pass-through entities must consider taking enforcement action against noncompliant subrecipients. MDE's grant award notifications required ESF subrecipients to submit a FER by August 29, 2022. MDE contracted for the completion of subrecipient desk reviews. Cause MDE elected to delay its review of FERs until all FERs were received. Also, because MDE's contracted desk reviews did not begin until July 2022, it was unable to finalize any individual subrecipient reviews by September 30, 2022. Effect MDE may not identify in a timely manner subrecipients that used funds for unauthorized purposes. We consider this to be a material weakness and material noncompliance because of lack of during-the-award monitoring activities. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE complete sufficient during-the-award monitoring of ESF subrecipients. Management Views For part a., MDE partially agrees with the finding. MDE acknowledges that it did not complete any reviews of the FERs submitted during fiscal year 2022. However, the Uniform Guidance does not specify a timeframe for the review of FERs for ESF funds and the ESF program is inherently more flexible than other federal programs in this regard. Although grant award notifications (GANs) originally required ESF subrecipients to submit a FER by August 29, 2022, MDE communicated to ESF subrecipients after the initial GANs that the August 29, 2022 due date was subject to change due to the continuously changing rules and requirements around this funding, including extension possibilities such as late liquidation. ESF FERs were due either within 60 days of full draw of the funds or within 60 days of the end of the award period, which could have been during the State's fiscal year 2022 or well after September 30, 2022. For this reason, under Uniform Guidance, MDE had the authority to delay the review of FERs until closer to the end date of the award. In the case of late liquidation, the U.S. Department of Education provided notification that extended the award period as far as 14 months beyond the original end date of the award. For part b., MDE partially agrees with the finding. MDE acknowledges that subrecipient desk reviews were not finalized; however, the majority of the subrecipient monitoring was complete. The Uniform Guidance does not specify a timeframe for ESF subrecipient monitoring to occur and no requirement or expectation was made that monitoring would be finalized by MDE management by September 30, 2022. While the MDE contractor was not tracking completion against the date of September 30, 2022, documentation was and is still available, upon request from the OAG, to demonstrate the substantial ongoing monitoring activities, such as desk reviews and review of amendments, as of the end of the State's fiscal year 2022. The Compliance Team was in regular contact with MDE throughout the monitoring process. The Compliance Team provided regular updates leading up to September 30, 2022 and shared comprehensive preliminary results with the department soon after September 30, 2022. Auditor's Comments to Management Views We determined, and MDE acknowledged, it did not complete any FER reviews or finalize any desk reviews as part of its during-the-award monitoring activities for the $1.8 billion provided to subrecipients in fiscal year 2022. In addition, the contractor acknowledged it did not have a tracking mechanism in place identifying when desk reviews were completed, consequently documentation did not exist to validate MDE's assertion that a majority of the subrecipient monitoring was complete. Federal regulation 2 CFR 200 Subpart F requires the SOM single audit be conducted annually in accordance with the State's fiscal year, which represents the period covered by the auditor's compliance opinion. Therefore, sufficient appropriate evidence must exist during the audit period to determine whether MDE complied with the subrecipient monitoring requirement identified as subject to audit in the OMB Compliance Supplement. Sufficient appropriate evidence did not exist in fiscal year 2022 to support compliance with federal regulation 2 CFR 200.332(d). Therefore, the finding stands as written.
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-042 Education Stabilization Fund, ALN 84.425, Subrecipient Monitoring - During-the-Award Monitoring Procedures See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not complete sufficient during-the-award monitoring procedures in fiscal year 2022. MDE provided its subrecipients a two-year grant and notified its subrecipients in their grant award notification that a final expenditure report (FER) was due by August 29, 2022. As of September 30, 2022, MDE received 1,335 (78%) of 1,717 FERs for the two-year grant. In addition, MDE contracted with a vendor to conduct desk reviews of ESF subrecipients beginning in July 2022. We noted: a. MDE did not complete any reviews of the FERs submitted during fiscal year 2022. We determined subrecipients submitted 990 (58%) FERs by August 29, 2022. b. Neither MDE nor its contractor could provide documentation supporting the subrecipient desk reviews finalized and whether any corrective action was required or enforcement action was taken against noncompliant subrecipients during fiscal year 2022. Criteria Federal regulation 2 CFR 200.303 requires the nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of federal awards. In addition, federal regulation 2 CFR 200.332(d) states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and performance reports required by the pass-through entity. ? Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address single audit findings related to the particular subaward. Federal regulation 2 CFR 200.332(h) states that all pass-through entities must consider taking enforcement action against noncompliant subrecipients. MDE's grant award notifications required ESF subrecipients to submit a FER by August 29, 2022. MDE contracted for the completion of subrecipient desk reviews. Cause MDE elected to delay its review of FERs until all FERs were received. Also, because MDE's contracted desk reviews did not begin until July 2022, it was unable to finalize any individual subrecipient reviews by September 30, 2022. Effect MDE may not identify in a timely manner subrecipients that used funds for unauthorized purposes. We consider this to be a material weakness and material noncompliance because of lack of during-the-award monitoring activities. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE complete sufficient during-the-award monitoring of ESF subrecipients. Management Views For part a., MDE partially agrees with the finding. MDE acknowledges that it did not complete any reviews of the FERs submitted during fiscal year 2022. However, the Uniform Guidance does not specify a timeframe for the review of FERs for ESF funds and the ESF program is inherently more flexible than other federal programs in this regard. Although grant award notifications (GANs) originally required ESF subrecipients to submit a FER by August 29, 2022, MDE communicated to ESF subrecipients after the initial GANs that the August 29, 2022 due date was subject to change due to the continuously changing rules and requirements around this funding, including extension possibilities such as late liquidation. ESF FERs were due either within 60 days of full draw of the funds or within 60 days of the end of the award period, which could have been during the State's fiscal year 2022 or well after September 30, 2022. For this reason, under Uniform Guidance, MDE had the authority to delay the review of FERs until closer to the end date of the award. In the case of late liquidation, the U.S. Department of Education provided notification that extended the award period as far as 14 months beyond the original end date of the award. For part b., MDE partially agrees with the finding. MDE acknowledges that subrecipient desk reviews were not finalized; however, the majority of the subrecipient monitoring was complete. The Uniform Guidance does not specify a timeframe for ESF subrecipient monitoring to occur and no requirement or expectation was made that monitoring would be finalized by MDE management by September 30, 2022. While the MDE contractor was not tracking completion against the date of September 30, 2022, documentation was and is still available, upon request from the OAG, to demonstrate the substantial ongoing monitoring activities, such as desk reviews and review of amendments, as of the end of the State's fiscal year 2022. The Compliance Team was in regular contact with MDE throughout the monitoring process. The Compliance Team provided regular updates leading up to September 30, 2022 and shared comprehensive preliminary results with the department soon after September 30, 2022. Auditor's Comments to Management Views We determined, and MDE acknowledged, it did not complete any FER reviews or finalize any desk reviews as part of its during-the-award monitoring activities for the $1.8 billion provided to subrecipients in fiscal year 2022. In addition, the contractor acknowledged it did not have a tracking mechanism in place identifying when desk reviews were completed, consequently documentation did not exist to validate MDE's assertion that a majority of the subrecipient monitoring was complete. Federal regulation 2 CFR 200 Subpart F requires the SOM single audit be conducted annually in accordance with the State's fiscal year, which represents the period covered by the auditor's compliance opinion. Therefore, sufficient appropriate evidence must exist during the audit period to determine whether MDE complied with the subrecipient monitoring requirement identified as subject to audit in the OMB Compliance Supplement. Sufficient appropriate evidence did not exist in fiscal year 2022 to support compliance with federal regulation 2 CFR 200.332(d). Therefore, the finding stands as written.
FINDING 2022-018 MDE, Subrecipient Monitoring - Subaward Information See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not report to its subrecipients all subaward information as required by the Uniform Guidance. We noted: a. MDE did not report one or more of the following for 4 (16%) of 25 sampled Supporting Effective Instruction State Grant subrecipients and 28 (47%) of 60 ESF subrecipients: unique entity identifier, FAIN, federal award date, federal award project description, name of federal awarding agency and pass-through entity, ALN, Assistance Listing Title, federal award dollar amount, identification of whether the award is research and development, indirect cost rate for the federal award, an approved federally recognized indirect cost rate for the subrecipient, and closeout terms and conditions. b. MDE did not report the correct FAIN or closeout terms and conditions for all 5 sampled Coronavirus State and Local Fiscal Recovery Funds subrecipients. Criteria Federal regulation 2 CFR 200.332(a) requires that all pass-through entities ensure that every subaward includes certain information. Cause For part a., MDE informed us MEGS+ is designed to automatically generate the grant award notifications upon approval of subaward applications; however, this function did not operate correctly in fiscal year 2022. For part b., MDE informed us because of an oversight, it did not always provide all required subaward information to subrecipients. Also, MDE believed it used the best available information at the time MDE developed and executed the subawards; however, our review of documentation noted MDE was provided the program's award identification prior to the executed subawards, but MDE staff did not appropriately communicate the information to applicable parties. Effect Subrecipients and their auditors may not be aware of the federal award information needed to ensure compliance with the federal requirements. We consider this to be a material weakness and material noncompliance for ESF because of the high error rate related to federal award information which was not disclosed to the subrecipient. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE report to its subrecipients all subaward information as required by the Uniform Guidance. Management Views MDE agrees with the finding
FINDING 2022-042 Education Stabilization Fund, ALN 84.425, Subrecipient Monitoring - During-the-Award Monitoring Procedures See Schedule of Findings and Questioned Costs for chart/table. Condition MDE did not complete sufficient during-the-award monitoring procedures in fiscal year 2022. MDE provided its subrecipients a two-year grant and notified its subrecipients in their grant award notification that a final expenditure report (FER) was due by August 29, 2022. As of September 30, 2022, MDE received 1,335 (78%) of 1,717 FERs for the two-year grant. In addition, MDE contracted with a vendor to conduct desk reviews of ESF subrecipients beginning in July 2022. We noted: a. MDE did not complete any reviews of the FERs submitted during fiscal year 2022. We determined subrecipients submitted 990 (58%) FERs by August 29, 2022. b. Neither MDE nor its contractor could provide documentation supporting the subrecipient desk reviews finalized and whether any corrective action was required or enforcement action was taken against noncompliant subrecipients during fiscal year 2022. Criteria Federal regulation 2 CFR 200.303 requires the nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of federal awards. In addition, federal regulation 2 CFR 200.332(d) states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and performance reports required by the pass-through entity. ? Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address single audit findings related to the particular subaward. Federal regulation 2 CFR 200.332(h) states that all pass-through entities must consider taking enforcement action against noncompliant subrecipients. MDE's grant award notifications required ESF subrecipients to submit a FER by August 29, 2022. MDE contracted for the completion of subrecipient desk reviews. Cause MDE elected to delay its review of FERs until all FERs were received. Also, because MDE's contracted desk reviews did not begin until July 2022, it was unable to finalize any individual subrecipient reviews by September 30, 2022. Effect MDE may not identify in a timely manner subrecipients that used funds for unauthorized purposes. We consider this to be a material weakness and material noncompliance because of lack of during-the-award monitoring activities. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MDE complete sufficient during-the-award monitoring of ESF subrecipients. Management Views For part a., MDE partially agrees with the finding. MDE acknowledges that it did not complete any reviews of the FERs submitted during fiscal year 2022. However, the Uniform Guidance does not specify a timeframe for the review of FERs for ESF funds and the ESF program is inherently more flexible than other federal programs in this regard. Although grant award notifications (GANs) originally required ESF subrecipients to submit a FER by August 29, 2022, MDE communicated to ESF subrecipients after the initial GANs that the August 29, 2022 due date was subject to change due to the continuously changing rules and requirements around this funding, including extension possibilities such as late liquidation. ESF FERs were due either within 60 days of full draw of the funds or within 60 days of the end of the award period, which could have been during the State's fiscal year 2022 or well after September 30, 2022. For this reason, under Uniform Guidance, MDE had the authority to delay the review of FERs until closer to the end date of the award. In the case of late liquidation, the U.S. Department of Education provided notification that extended the award period as far as 14 months beyond the original end date of the award. For part b., MDE partially agrees with the finding. MDE acknowledges that subrecipient desk reviews were not finalized; however, the majority of the subrecipient monitoring was complete. The Uniform Guidance does not specify a timeframe for ESF subrecipient monitoring to occur and no requirement or expectation was made that monitoring would be finalized by MDE management by September 30, 2022. While the MDE contractor was not tracking completion against the date of September 30, 2022, documentation was and is still available, upon request from the OAG, to demonstrate the substantial ongoing monitoring activities, such as desk reviews and review of amendments, as of the end of the State's fiscal year 2022. The Compliance Team was in regular contact with MDE throughout the monitoring process. The Compliance Team provided regular updates leading up to September 30, 2022 and shared comprehensive preliminary results with the department soon after September 30, 2022. Auditor's Comments to Management Views We determined, and MDE acknowledged, it did not complete any FER reviews or finalize any desk reviews as part of its during-the-award monitoring activities for the $1.8 billion provided to subrecipients in fiscal year 2022. In addition, the contractor acknowledged it did not have a tracking mechanism in place identifying when desk reviews were completed, consequently documentation did not exist to validate MDE's assertion that a majority of the subrecipient monitoring was complete. Federal regulation 2 CFR 200 Subpart F requires the SOM single audit be conducted annually in accordance with the State's fiscal year, which represents the period covered by the auditor's compliance opinion. Therefore, sufficient appropriate evidence must exist during the audit period to determine whether MDE complied with the subrecipient monitoring requirement identified as subject to audit in the OMB Compliance Supplement. Sufficient appropriate evidence did not exist in fiscal year 2022 to support compliance with federal regulation 2 CFR 200.332(d). Therefore, the finding stands as written.
FINDING 2022-061 Disaster Grants - Public Assistance (Presidentially Declared Disasters), ALN 97.036, Subrecipient Monitoring - Subrecipient Audits See Schedule of Findings and Questioned Costs for chart/table. Condition MSP did not appropriately monitor its subrecipients to ensure they complied with the Uniform Guidance. MSP utilized a tracking sheet to identify those subrecipients that required a single audit and a form to document its review of subrecipient single audits. We sampled 5 subrecipients and noted for 2 (40%): a. MSP did not appropriately identify or document if the subrecipients required a single audit. Therefore, MSP did not monitor these subrecipients to ensure the status or submission of their single audit reports. We verified both subrecipients obtained the required single audits. b. MSP did not complete single audit report review forms. Therefore, MSP did not take steps to determine whether a management decision letter was needed. We verified there were no findings related to both subrecipients' federal awards. Criteria Federal regulation 2 CFR 200.501 requires nonfederal entities who expend $750,000 or more in federal awards during their fiscal year to obtain a single audit for that fiscal year. Also, federal regulation 2 CFR 200.332(f) requires the pass-through entity to verify these subrecipients are audited as required by Subpart F of the Uniform Guidance, Audit Requirements, when it is expected the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the $750,000 threshold. In addition, federal regulation 2 CFR 200.521(d) requires MSP to issue a management decision letter on the appropriateness of all audit findings related to its federal awards and the subrecipient's corrective action plan within six months of acceptance by the FAC. Cause MSP informed us a miscommunication between its staff regarding its query of subrecipient expenditure data resulted in subrecipients being excluded from the tracking sheet. Effect MSP limited the State's assurance that its subrecipients complied with grant requirements and implemented corrective actions for audit findings to prevent future sanctions or disallowed costs, which could necessitate adjustments to MSP's records. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MSP appropriately monitor its subrecipients to ensure they comply with the Uniform Guidance. Management Views MSP agrees with the finding.
FINDING 2022-061 Disaster Grants - Public Assistance (Presidentially Declared Disasters), ALN 97.036, Subrecipient Monitoring - Subrecipient Audits See Schedule of Findings and Questioned Costs for chart/table. Condition MSP did not appropriately monitor its subrecipients to ensure they complied with the Uniform Guidance. MSP utilized a tracking sheet to identify those subrecipients that required a single audit and a form to document its review of subrecipient single audits. We sampled 5 subrecipients and noted for 2 (40%): a. MSP did not appropriately identify or document if the subrecipients required a single audit. Therefore, MSP did not monitor these subrecipients to ensure the status or submission of their single audit reports. We verified both subrecipients obtained the required single audits. b. MSP did not complete single audit report review forms. Therefore, MSP did not take steps to determine whether a management decision letter was needed. We verified there were no findings related to both subrecipients' federal awards. Criteria Federal regulation 2 CFR 200.501 requires nonfederal entities who expend $750,000 or more in federal awards during their fiscal year to obtain a single audit for that fiscal year. Also, federal regulation 2 CFR 200.332(f) requires the pass-through entity to verify these subrecipients are audited as required by Subpart F of the Uniform Guidance, Audit Requirements, when it is expected the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the $750,000 threshold. In addition, federal regulation 2 CFR 200.521(d) requires MSP to issue a management decision letter on the appropriateness of all audit findings related to its federal awards and the subrecipient's corrective action plan within six months of acceptance by the FAC. Cause MSP informed us a miscommunication between its staff regarding its query of subrecipient expenditure data resulted in subrecipients being excluded from the tracking sheet. Effect MSP limited the State's assurance that its subrecipients complied with grant requirements and implemented corrective actions for audit findings to prevent future sanctions or disallowed costs, which could necessitate adjustments to MSP's records. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend MSP appropriately monitor its subrecipients to ensure they comply with the Uniform Guidance. Management Views MSP agrees with the finding.
Criteria: 2 CFR Part 200 in general and 2 CFR section 200.332 require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, beneficiary eligibility, period of performance, reporting, subrecipient monitoring, and special tests and provisions. The related compliance requirements are set in Section 501 of Division N of the Consolidated Appropriations Act, 2021, 2 CFR Part 200, Subpart E, Appendices III-V11, and sections 200.330, .331, and .501(h), federal awarding agency regulations, and the terms and conditions of the award. Condition: Subrecipient monitoring controls related to periodic subrecipient reports and the final subrecipient expenditure reports, financial reporting, period of performance, and special tests and provisions for funding reallocations were not documented in a manner that is reperformable. Cause: Control activities were performed informally and without clear documentation. Effect: Individuals who are not eligible to receive the services funded by this grant may incorrectly be served by the subrecipient entities, allowable costs or cost principles may not have been followed by subrecipient entities, or subrecipients may not have been properly monitored for other compliance requirements. Expenditures could be made outside of the period of performance, amounts in the financial reports could be incorrect, funding reallocation requirements could be missed. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
Criteria: 2 CFR Part 200 in general and 2 CFR section 200.332 require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, reporting, and suspension and debarment. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Controls related to reporting of other grant expenditures were not effective and certain amounts were missing from the financial reports. Controls related to ensuring contractors were not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300 were not documented in a manner that is reperformable. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Review of financial reports was not sufficient to ensure all grant expenditures were reported. Suspension and debarment controls were not evidenced with clear documentation; checklists are maintained but were not completed in all cases. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Certain other grant expenditures were erroneously excluded from the financial reports. Procurement of contractors risks including those who were suspended or debarred; however none such were identified. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
2022-001: Considered a significant deficiency in internal control over compliance/immaterial non-compliance Program: ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (Prevention, COVID-19 Prevention II, and COVID-19 ARPA Prevention) Criteria: As detailed by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: During testing of contracts with subrecipients it was noted that these contracts did not include portions of required disclosures. Cause/Effect: This condition appears to be the result of inconsistent application of internal controls over compliance. Contracts with subrecipients were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the Entity update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2022-001: Considered a significant deficiency in internal control over compliance/immaterial non-compliance Program: ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (Prevention, COVID-19 Prevention II, and COVID-19 ARPA Prevention) Criteria: As detailed by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: During testing of contracts with subrecipients it was noted that these contracts did not include portions of required disclosures. Cause/Effect: This condition appears to be the result of inconsistent application of internal controls over compliance. Contracts with subrecipients were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the Entity update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
2022-001: Considered a significant deficiency in internal control over compliance/immaterial non-compliance Program: ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (Prevention, COVID-19 Prevention II, and COVID-19 ARPA Prevention) Criteria: As detailed by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: During testing of contracts with subrecipients it was noted that these contracts did not include portions of required disclosures. Cause/Effect: This condition appears to be the result of inconsistent application of internal controls over compliance. Contracts with subrecipients were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the Entity update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Finding No. 2022-001 (Repeat of 2021-004): Identifying Federal Award Information of Pass-Through Funds to Subrecipients Assistance Listing Program Title and Number: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 ? American Rescue Plan Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 COVID-19 - Consolidated Appropriations Act for Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045 Nutrition Services Incentive Program 93.053 Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services 93.043 National Family Caregiver Support - Title III, Part E 93.052 Social Services Block Grant 93.667 Coronavirus Relief Fund 21.019 Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: State of Connecticut Department of Aging and Disability Services Criteria As per 2 CFR Section 200.332, a pass-through entity must clearly identify to the subrecipient: (1) the award as a subaward at the time of the subaward by providing information described in 2 CFR Section 200.332; (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 award; and (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 for the federal award. Condition The audited financial statements of subrecipients reviewed during the audit did not appropriately identify federal subawards passed through by the Agency. Cause The Agency did not properly communicate federal subaward information to subrecipients. Effect The financial statements of the subrecipients did not accurately identify federal subaward information. Questioned Costs None. Context The Agency did not have a formalized process to communicate federal subaward information to subrecipient organizations. Recommendation We recommend that all necessary efforts be taken to identify and communicate the federal subaward information for funds passed through to subrecipients. This includes a recommendation that the Agency verifies that the reported expenditures for funds passed through to subrecipients is in agreement with the federal subaward information as reported on the financial statements of the subrecipients. Views of Responsible Officials In the past, the Agency provided confirmations to subrecipients as requested. Going forward, the source of funding along with the breakout by financial assistance listing number will be clearly communicated to all subrecipients. The Agency will also ensure that reported expenditures by each subrecipient reconciles to the Agency?s advances to that subrecipient during the review of the subrecipient audit reports.
Significant deficiency in internal controls over compliance and instances of noncompliance related to subrecipient monitoring. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials CFDA Number: 93.011 Award Numbers: 1 G32HS42592-01-00 Award Period: July 31, 2021 - July 31, 2023 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart D (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires a pass-through entity to adopt compliance policies to ensure sub-recipients comply with requirements under the award, and evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of such agreements for the purposes of determining appropriate subrecipient monitoring. Condition/Context for Evaluation In a population of three subrecipients, no documentation was available showing an assessment of the risk of noncompliance of the subrecipients. For one subrecipient, a fixed fee award was issued that had not received prior approval by the federal funder. As such, when the payment to the subrecipient was made based on a fixed amount, the Organization was not monitoring to ensure the subrecipient was minimizing the time lapse between the receipt of payment and expenditures incurred. Questioned Costs Not applicable. Cause The Organization?s subrecipient monitoring policy did not include all the required provisions outlined in 2 CFR 200.332. Effect or Potential Effect The Organization did not fully comply with the requirements regarding subrecipient monitoring. Repeat Finding Not applicable. Recommendation We recommend that the Organization update the subrecipient monitoring policy to ensure a risk assessment is performed over all subrecipients and that any fixed fee awards receive prior approval from the federal funder. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: M22-SG350100 & M21-SP350100 - 2022 Award Period: October 1, 2021 through September 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: A pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: ? Reviewing financial and programmatic (performance and special reports) required by the PTE. ? Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Condition: During our testing, we noted the Authority did not have adequate internal controls designed to properly monitor its? subrecipients. Questioned costs: None Context: During our testing of subrecipient monitoring, it was noted that there was not proper follow up conducted for 3 out of 8 subrecipients tested. The Authority did not follow its policies and procedures to ensure findings and questions were properly addressed by the subrecipient. The sample was a statistically valid sample. Cause: The Authority does not have a policy in place to ensure that subrecipients were responding to its monitoring reports in a timely manner. Effect: The lack of internal controls over this compliance requirement provides an opportunity for noncompliance by subrecipients of the grant. Recommendation: We recommend the Authority design controls to ensure subrecipients are responding to and addressing questions and findings within its monitoring reports. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The Authority uses the Tracker database to track monitoring deadlines electronically. The Tracker automatically sends reminders to all staff in the department every two weeks to follow up with pending and outstanding monitoring issues. However, some staff were not using the Tracker as intended. The Director will enforce and monitor the use of the Tracker and ensure staff follow up on the monitorings by the required deadlines. Name of the contact person responsible for corrective action: Chief Housing Officer Planned completion date for corrective action plan: November 30, 2022
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: M22-SG350100 & M21-SP350100 - 2022 Award Period: October 1, 2021 through September 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: A pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: ? Reviewing financial and programmatic (performance and special reports) required by the PTE. ? Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Condition: During our testing, we noted the Authority did not have adequate internal controls designed to properly monitor its? subrecipients. Questioned costs: None Context: During our testing of subrecipient monitoring, it was noted that there was not proper follow up conducted for 3 out of 8 subrecipients tested. The Authority did not follow its policies and procedures to ensure findings and questions were properly addressed by the subrecipient. The sample was a statistically valid sample. Cause: The Authority does not have a policy in place to ensure that subrecipients were responding to its monitoring reports in a timely manner. Effect: The lack of internal controls over this compliance requirement provides an opportunity for noncompliance by subrecipients of the grant. Recommendation: We recommend the Authority design controls to ensure subrecipients are responding to and addressing questions and findings within its monitoring reports. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The Authority uses the Tracker database to track monitoring deadlines electronically. The Tracker automatically sends reminders to all staff in the department every two weeks to follow up with pending and outstanding monitoring issues. However, some staff were not using the Tracker as intended. The Director will enforce and monitor the use of the Tracker and ensure staff follow up on the monitorings by the required deadlines. Name of the contact person responsible for corrective action: Chief Housing Officer Planned completion date for corrective action plan: November 30, 2022
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: ARRA Tax Credit Assistance Program (TCAP) Assistance Listing Number: 14.258 Federal Award Identification Number and Year: M-09-ES-35-0100 - 2022 Award Period: October 1, 2021 through September 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: A pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: ? Reviewing financial and programmatic (performance and special reports) required by the PTE. ? Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Criteria or specific requirement (Continued): Grantees must perform asset management functions, or contract for performance of these services at the owner?s expense, to ensure compliance with Section 42 of the IRC and with the long term viability of projects funded by TCAP (ARRA, 123 Stat. 221). Condition: During our testing, we noted the Authority did not have adequate internal controls designed to properly monitor its? subrecipients. Questioned costs: None Context: During our testing of subrecipient monitoring, it was noted that there was not proper follow up conducted for one out of five subrecipients tested. The Authority did not follow its policies and procedures to ensure findings and questions were properly addressed by the subrecipient. The sample was a statistically valid sample. Cause: The Authority does not have a policy in place to ensure that subrecipients were responding to its monitoring reports in a timely manner. Effect: The lack of internal controls over this compliance requirement provides an opportunity for noncompliance by subrecipients of the grant. Recommendation: We recommend the Authority design controls to ensure subrecipients are responding to and addressing questions and findings within its monitoring reports. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The Authority uses the Tracker database to track monitoring deadlines electronically. The Tracker automatically sends reminders to all staff in the department every two weeks to follow up with pending and outstanding monitoring issues. However, some staff were not using the Tracker as intended. The Director will enforce and monitor the use of the Tracker and ensure staff follow up on the monitorings by the required deadlines. Name of the contact person responsible for corrective action: Chief Housing Officer Planned completion date for corrective action plan: November 30, 2022
Finding 2022-001:U.S. Department of the Treasury Federal Financial Assistance Listing 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Controls over Compliance and Material Noncompliance Criteria: Per 2 CFR 200.332, pass-through entities must clearly identify required subaward elements to subrecipients, evaluate the subrecipient?s risk of noncompliance with Federal guidelines and the terms of the award, and confirm that the subrecipient is not debarred or suspended. Further, per 2 CFR 200.303, the entity must have a system of internal control designed to maintain compliance with these requirements. Condition: The County provided a subaward of SLFRF funds to a subrecipient. The County did not include the required data elements in the subaward document, did not perform an assessment of the risk of subrecipient noncompliance with federal guidelines and grant terms, and did not review to determine that the subrecipient was not suspended or debarred. Cause: The County did not have a subrecipient monitoring policy in place that required compliance with these guidelines. Effect: SLFRF requirements for pass-through entities were not followed. Questioned Costs: None. Context/Sampling: Sampling was not utilized. The County issued one subaward during the period under audit. Recommendation: The County should create a subrecipient monitoring policy and include evidence of compliance with the policy in the subrecipient monitoring file. Views of Responsible Officials: Management agrees with the noted finding. Refer to Corrective Action Plan. Repeat Finding from Prior Year: No
2022-001: Considered a significant deficiency in internal control over compliance/immaterial non-compliance Program: ALN 93.958 Block Grants for Prevention and Treatment of Substance Abuse (Treatment and Access Management) Criteria: As detailed by 2 CFR 200.332, the pass-through entity must communicate specific information to subrecipients, as applicable. Condition: During testing of contracts with subrecipients it was noted that these contracts did not include portions of required disclosures. Cause/Effect: This condition appears to be the result of inconsistent application of internal controls over compliance. Contracts with subrecipients were not in compliance with 2 CFR 200.332. Questioned Cost: None. Recommendation: We recommend that the Entity update all contracts with subrecipients to include required language. View of Responsible Official: Management is in agreement with this recommendation.