Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Criteria: The requirements for subrecipient monitoring for subawards are contained in 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h); federal awarding agency regulations; and the terms and conditions of awards. Condition: Monitoring activities performed by the County did not encompass certain areas necessary to ensure that the subaward complied with the terms and conditions of the subaward and achieved performance goals (2 CFR sections 200.332(d) through (f). Specifically, no onsite reviews of 2022 program year operations were conducted during the year. Cause/Effect: The County did not have adequate procedures in place for monitoring that subrecipients were complying with federal regulations and had achieved performance goals. Auditor's Recommendation: The County should review the monitoring plan related to the program to ensure these procedures are done timely and meet the federal requirements for monitoring subrecipients.
Finding 2022-003 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Formula Grants for Rural Areas and Tribal Transit Programs, Aging Cluster Federal Agency: U.S. Department of Transportation, U.S. Department of Health and Human Services ALN Number: 20.509 and 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2201ALSTPH-00/2101ALOASS,2101ALALVAC/2101ALSSC6, 2101ALOACM/2201ALOAHD Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities 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; and that subaward performance goals are achieved. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested 8 subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Warren Averett tested 3 subrecipients in ALN#20.509 and noted that the Commission did not obtain the single audit reports for any of these subrecipients. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes regulations and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is not a repeat finding. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2022-003 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Formula Grants for Rural Areas and Tribal Transit Programs, Aging Cluster Federal Agency: U.S. Department of Transportation, U.S. Department of Health and Human Services ALN Number: 20.509 and 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2201ALSTPH-00/2101ALOASS,2101ALALVAC/2101ALSSC6, 2101ALOACM/2201ALOAHD Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities 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; and that subaward performance goals are achieved. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested 8 subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Warren Averett tested 3 subrecipients in ALN#20.509 and noted that the Commission did not obtain the single audit reports for any of these subrecipients. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes regulations and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is not a repeat finding. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2022-003 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Formula Grants for Rural Areas and Tribal Transit Programs, Aging Cluster Federal Agency: U.S. Department of Transportation, U.S. Department of Health and Human Services ALN Number: 20.509 and 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2201ALSTPH-00/2101ALOASS,2101ALALVAC/2101ALSSC6, 2101ALOACM/2201ALOAHD Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities 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; and that subaward performance goals are achieved. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested 8 subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Warren Averett tested 3 subrecipients in ALN#20.509 and noted that the Commission did not obtain the single audit reports for any of these subrecipients. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes regulations and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is not a repeat finding. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2022-003 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Formula Grants for Rural Areas and Tribal Transit Programs, Aging Cluster Federal Agency: U.S. Department of Transportation, U.S. Department of Health and Human Services ALN Number: 20.509 and 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2201ALSTPH-00/2101ALOASS,2101ALALVAC/2101ALSSC6, 2101ALOACM/2201ALOAHD Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities 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; and that subaward performance goals are achieved. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested 8 subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Warren Averett tested 3 subrecipients in ALN#20.509 and noted that the Commission did not obtain the single audit reports for any of these subrecipients. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes regulations and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is not a repeat finding. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2022-003 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Formula Grants for Rural Areas and Tribal Transit Programs, Aging Cluster Federal Agency: U.S. Department of Transportation, U.S. Department of Health and Human Services ALN Number: 20.509 and 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2201ALSTPH-00/2101ALOASS,2101ALALVAC/2101ALSSC6, 2101ALOACM/2201ALOAHD Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities 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; and that subaward performance goals are achieved. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested 8 subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Warren Averett tested 3 subrecipients in ALN#20.509 and noted that the Commission did not obtain the single audit reports for any of these subrecipients. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes regulations and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is not a repeat finding. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2022-003 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Formula Grants for Rural Areas and Tribal Transit Programs, Aging Cluster Federal Agency: U.S. Department of Transportation, U.S. Department of Health and Human Services ALN Number: 20.509 and 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2201ALSTPH-00/2101ALOASS,2101ALALVAC/2101ALSSC6, 2101ALOACM/2201ALOAHD Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities 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; and that subaward performance goals are achieved. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested 8 subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Warren Averett tested 3 subrecipients in ALN#20.509 and noted that the Commission did not obtain the single audit reports for any of these subrecipients. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes regulations and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is not a repeat finding. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Finding 2022-003 – Subrecipient Monitoring– Material Weakness and Noncompliance Federal Program: Formula Grants for Rural Areas and Tribal Transit Programs, Aging Cluster Federal Agency: U.S. Department of Transportation, U.S. Department of Health and Human Services ALN Number: 20.509 and 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2201ALSTPH-00/2101ALOASS,2101ALALVAC/2101ALSSC6, 2101ALOACM/2201ALOAHD Compliance Requirement: Subrecipient Monitoring Criteria: 2 CFR 200.332 provides various requirements for subrecipient monitoring including the following: • 2 CFR 200.332(d) requires pass-through entities 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; and that subaward performance goals are achieved. • 2 CFR 200.332(f) requires pass-through entities to “verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: Warren Averett tested 8 subrecipients in the Aging Cluster and noted that two were not monitored adequately during the award period and the Commission did not obtain single audit reports for any of the subrecipients tested. Warren Averett tested 3 subrecipients in ALN#20.509 and noted that the Commission did not obtain the single audit reports for any of these subrecipients. Cause: Although the Commission performed certain procedures required by 2 CFR 200.332, the policies and procedures do not contain adequate guidance to fully address the requirements. Effect: The lack of adequate policies and procedures can lead to noncompliance with federal statutes regulations and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Repeat Finding: This is not a repeat finding. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding subrecipient monitoring. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Compliance Requirement Subrecipient monitoring Material Weakness Material Noncompliance 2022-003. The County should establish controls to ensure subrecipients are sufficiently monitored. Assistance Listing Number 21.027 Federal Award Coronavirus State and Local Fiscal Recovery Funds Federal Agency U.S. Department of the Treasury Pass-through N/A – Direct Award Questioned Costs None Context There was one transaction passed-through to a subrecipient. Repeat Finding No Criteria The Federal Compliance Supplement and 2 CFR Section 200.332 requires pass-through entities to communicate and clearly identify to the subrecipient: 1) the award as a subaward at the time of the subaward by providing the information described in 2 CFR section 200.332(a)(1); 2) all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and terms and conditions of the award; and 3) any additional requirements the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility for the federal award. It also requires the pass-through entity to verify that every subrecipient is audited under the Uniform Guidance when required. Condition The County did not have an effective process in place to ensure required communications occurred with subrecipients of federal awards. There was no agreement with the subrecipient that explicitly included certain information required under 2 CFR 200.332(a)(1). During our audit of the County’s federal expenditures, we noted that the only procedure in place to monitor the subrecipient’s use of federal awards was a visual inspection of the work completed. Cause Management was not aware of the additional communication requirements imposed on pass-through entities. Effect Failure to monitor subrecipient’s use of federal awards could result in the erroneous or fraudulent spending of federal awards, as well as a risk the subrecipient may not be audited in accordance with the Uniform Guidance when required. Recommendation We recommend the County update its communications with the subrecipient to include the required communications of the subrecipient’s responsibilities under the federal requirements, grant agreements and award requirements including, but not limited to its audit obligations under the Uniform Guidance. Views of Responsible Official(s) This payment was a one-time payment for a single project completed by the City of Meridian. Moving forward, Lauderdale County will document the completion of the project.
Finding Number: 2022-041 Prior Year Finding Number: 2021-036 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Treasury COVID-19 - Coronavirus Relief Fund ALN: 21.019 Award #: N/A Award Period: 03/01/2020 – 12/31/2021 Government Department/Agency: Office of Management and Budget (OMB) Criteria – A pass-through entity (PTE) must: Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: 1. The award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); 2. All requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); 3. Any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 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). Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed two sub-awards made during 2022 and found that OMB did not evaluate the risks or monitor the two subrecipients. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements. Questioned Costs – None. Context – This is a condition identified per review of OMB’s compliance with the specified requirements and general compliance principles. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $4,500,000. Effect – OMB is not in compliance with the stated provisions. Failure to properly monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – OMB does not have internal controls in place to properly monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that OMB implement policies, procedures, and controls to ensure subrecipients are monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. OMB will establish a robust framework featuring detailed monitoring procedures, regular compliance checks, and comprehensive oversight mechanisms to ensure subrecipients adhere to federal requirements. This framework aims to promote accountability, proper use of federal funds, mitigate risks, enhance transparency, and ensure subrecipients effectively fulfill their obligations under federal statutes. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2022-045 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Treasury COVID-19 - Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Period: 03/03/2021 – 12/31/2024 Government Department/Agency: Office of Management and Budget (OMB) Criteria – A pass-through entity (PTE) must: Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: 1. The award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); 2. All requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); 3. Any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 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). Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We obtained a list of subrecipients from OMB and found that the list identified internal Government of the Virgin Islands (GVI) departments and offices as subrecipients. The list of subrecipients also included an external entity whose federal expenditures are part of the GVI Schedule of Expenditures of Federal Awards. As a result, the listing of subrecipients was amended to exclude 23 projects totaling $23,559,959. Using the amended listing of subrecipients, we selected 12 of 18 subrecipients and found the following: • 3 projects which OMB did not verify if the entity underwent a single audit as required by 2 CFR part 200, subpart F. • 1 project which OMB did not complete their monitoring workbook during the fiscal year • 5 projects in which there was no evidence the monitoring workbook was reviewed by the ARPA Grants Administrator. • 6 projects where entities were identified as subrecipients but were ultimately considered to be beneficiaries of SLFRF funds and not subrecipients. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements or proper identification of subrecipients. Questioned Costs – None. Context – This is a condition identified per review of OMB’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $56,490,165. The total amount of our sample totaled $46,452,928. Effect – OMB is not in compliance with the stated provisions. Failure to properly identify and monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – OMB does not have internal controls in place to properly identify and monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that OMB implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. Starting FY25, OMB will identify and monitor federal awarding agencies, requesting single audit results for applicable recipients and including them in monitoring reviews. For revenue replacement projects, Treasury's Final Rule FAQ (13.14) states that these funds do not create subrecipient relationships, thus exempting them from the Single Audit Act due to the absence of a federal program or purpose. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number 2022-051 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Education Consolidated Grant to the Outlying Areas, ALN: 84.403A Award #: Various Award Period: Various Government Department/Agency: Department of Education (VIDE) Criteria – Per Compliance Supplement, a pass-through entity (PTE) must: • Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). • Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 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). • Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We sampled subawards to 3 out of 10 subrecipients and found no supporting documentation that VIDE verified that subrecipients expected to be audited as required by 2 CFR part 200, subpart F. Additionally, there was no evidence of award monitoring performed for 2 of the 3 subrecipients tested. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements. Questioned Costs – None. Context – This is a condition identified per review of VIDE’s compliance with the specified requirements and general compliance principles. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $1,051,727. Effect – VIDE is not in compliance with the stated provisions. Failure to properly monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – VIDE does not have internal controls in place to properly monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that VIDE implement policies, procedures, and controls to ensure subrecipients are monitored in accordance with federal statutes. Views of Responsible Officials - The Government concurs with the auditor’s findings and recommendations. VIDE is committed to strengthening controls to ensure subrecipient compliance with federal audit requirements under 2 CFR Part 200, Subpart F. This includes implementing effective measures, such as explicit reporting requirements in subrecipient agreements and providing training to internal staff on subrecipient monitoring requirements and ensure consistent implementation. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2022-082 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Homeland Security Disaster Grants - Public Assistance (Presidentially Declared Disasters) ALN: 97.036 Award #: FEMA-4335-DR, FEMA-4340-DR-VI, FEMA-4513-DR Award Periods: 09/20/2017 – 09/07/2026 09/07/2017 – 09/16/2025 04/02/2020 – 05/11/2023 Government Department/Agency: Virgin Islands Territorial Emergency Management Agency (VITEMA) Criteria – A pass-through entity (PTE) must: Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: 1. The award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); 2. All requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); 3. Any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following: 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 single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program; 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). Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special reports) required by the PTE. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. 3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We selected 8 of 25 subrecipients and found the following: • 5 instances where we were unable to obtain subrecipient agreements. • 8 instances where we were unable to obtain Quarterly Progress Reports. • 3 instances with no Certification Letter of Completion of Work and Disaster Response and Recovery Final Inspection Report. • 8 instances with no supporting documentation that VITEMA verified that subrecipients expected to be audited as required by 2 CFR part 200, subpart F. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the subrecipient monitoring compliance requirements or proper identification of subrecipients. Questioned Costs – None. Context – This is a condition identified per review of VITEMA’s compliance with the specified requirements using a statistically valid sample. The total amount of expenditures passed through to subrecipients in fiscal year 2022 were $205,714,063. The total amount of our sample totaled $190,927,885. Effect – VITEMA is not in compliance with the stated provisions. Failure to properly identify and monitor subrecipients can result in noncompliance with laws and regulations and failure to meet the programs objectives. Cause – VITEMA does not have internal controls in place to properly identify and monitor subrecipients to ensure adherence to applicable federal regulations, including expending federal awards for allowable expenditures. Recommendation – We recommend that VITEMA implement policies, procedures, and controls to ensure subrecipients are identified and monitored in accordance with federal statutes. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. The formal process for completing and retaining Subrecipient Agreements is now operational to ensure compliance with programmatic obligations. As the Recipient, the Territory is responsible for notifying the Subrecipient when federal funds are obligated and providing them with a subrecipient agreement outlining the program's terms and conditions. The Disaster Program Financial Specialist is responsible for ensuring that the subrecipient agreement is signed by both the Applicant and the Governor's Authorized Representative and provided to the Territorial Public Assistance Officer. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding No.: 2022-005 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D22AF00029-00 Area: Subrecipient Monitoring Questioned Costs: $1,030,566 Criteria: In accordance with applicable subrecipient requirements (CFR §200.332), a pass-through entity (PTE) must: a. Ensure that the subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the PTE must provide the best information available to describe the Federal award and subaward. Required information includes: 1. Federal award identification: (i) Subrecipient’s name, (ii) Subrecipient’s unique entity identifier, (iii) Federal Award Identification Number (FAIN), (iv) Federal Award Date, (v) Subaward Period of Performance Start and End Date, (vi) Subaward Budget Period Start and End Date, (vii) Amount of Federal Funds Obligated by this action by the PTE to the subrecipient, (viii) Total Amount of Federal Funds Obligated to the subrecipient by the PTE including the current financial obligation, (ix) Total Amount of the Federal Award committed to the subrecipient by the PTE, (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, PTE, and contact information for awarding official of the PTE, and (xi) Assistance Listings Number and Title; the PTE must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement. 2. All requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. b. 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, c. Verify that every subrecipient is audited as required by CFR Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in CFR § 200.501, d. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the PTE's own records, and e. Consider taking enforcement action against noncompliant subrecipients as described in CFR §200.339. Condition: An amount of $1,030,566 (Doc #626) was passed through to Belau Submarine Cable Corporation (BSCC), a component unit of the Republic, for the submarine fiber optic cable project for the year ended September 30, 2022; however, there was lack of evidence to indicate that the above criteria was met. Cause: The Republic lacks internal control policies and procedures to identify subrecipient relationships and monitor subrecipients to ensure compliance with applicable subrecipient requirements. Effect: The Republic is in noncompliance with applicable subrecipient requirements and therefore $1,030,566 is questioned. Recommendation: The Republic should develop and implement internal control policy and procedures to identify subrecipient relationship and monitor activities of subrecipients to ensure compliance with applicable subrecipient requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.
Finding No. 2022-019 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00016, D19AP00081 D21AP10043, D21AP000138, D19AP00090 Area: Subrecipient Monitoring Questioned Costs: $549,849 Criteria: 1. In accordance with 2 CFR § 200.332, pass-through entity (PTE) must: a. Verify that the subrecipient is not excluded or disqualified in accordance with § 180.300. Verification methods are provided in § 180.300, which include confirming in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. b. Verify that a subrecipient is audited as required by subpart F. 2. In accordance with 2 CFR §200.1, a subrecipient is defined as an entity that receives a subaward from a PTE to carry out part of a Federal award. The term subrecipient does not include a beneficiary or participant. A subrecipient may also be a recipient of other Federal awards directly from a Federal agency. 3. Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient’s risk, a PTE should consider the following: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have 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 any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). Condition: Of nine subrecipients tested, aggregating $1,263,952 of a total population of $2,022,623, the following were noted: 1. For nine (or 100%), documentation of the risk assessments performed and verification as to whether the subrecipients are not suspended or debarred were not provided. No questioned costs for grant awards with no corresponding FY2022 expenditures. Of eight subrecipient monitoring procedure requirements tested, the following were noted: 2. For two (or 25%), the subrecipients’ performance reports did not include the required project narrative report that entails the current state or progress completion in accordance with the scope of work. 3. For eight (or 100%), no verification as to whether the subrecipients are subject to the audit requirements were provided. No questioned costs are presented as amounts are questioned at Condition 1 for grant award numbers D18AP00026, D21AP00138 and D21AP10043 while the other grant awards have no corresponding FY2022 expenditures. Cause: The CNMI does not have written subrecipient monitoring policies and procedures. In addition, the CNMI failed to enforce compliance with subrecipient monitoring requirements and lacks monitoring controls over the following: 1. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 2. Adequate documentation and systematic filing of relevant documentation supporting program costs. Effect: CNMI is in noncompliance with the applicable subrecipient monitoring requirements and questioned costs of $549,849 result for Condition 1. Identification as a Repeat Finding: Finding No. 2021-022 Recommendation: We recommend the CNMI establish an approved/adopted written subrecipient monitoring policies and procedures and implement monitoring internal control procedures over the following: 1. Verification that subrecipients are not excluded or disqualified in accordance with § 180.300, which includes confirming in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving federal funds; 2. Verification that subrecipients are audited as required by subpart F; 3. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 4. Adequate documentation and systematic filing of relevant documentations to support program costs. Views of Responsible Officials: Condition 1 - CIP agrees with this finding. To address this finding, CIP will implement a standardized risk assessment checklist to be used for all subrecipients to confirm they are not suspended, debarred, or excluded under 2 CFR §180.300; all staff responsible for subrecipient monitoring will receive training on federal requirements for exclusion checks and proper documentation procedures; and conduct periodic reviews to ensure that SAM.gov checks are consistently performed and documented for all new and existing subrecipients. Condition 2 - CIP disagrees with this finding. The subrecipient was not required to submit the required project narrative report; instead, the report was prepared and submitted by the project manager responsible for managing the project as assigned by CIP. Condition 3 - We acknowledge the finding that documentation was not provided to verify whether eight subrecipients were subject to the audit requirements. CIP will strengthen its subrecipient monitoring procedures to ensure compliance with 2 CFR 200.331(f) and related audit requirements. Refer to CNMI’s Corrective Action Plan for additional information. Auditor Response: Condition 2 - As stated in the subaward agreements, subrecipients shall furnish to the CNMI, project documents certifying beneficiary occupancy and/or substantial completion. This is done through submission of a project narrative status report to the CNMI, which includes information such as scope of work, percentage of completion, status of the project and anticipated completion date. As subrecipients are required to submit certification of project status, report should be prepared by the subrecipients and should be consistently required for all subawards.
Finding No. 2022-027 Federal Agency: U.S. Department of the Treasury AL Program: 21.026 Homeowner Assistance Fund Program Federal Award No.: HAF0205 Area: Subrecipient Monitoring Questioned Costs: $4,157,924 Criteria: In accordance with 2 CFR § 200.332, a pass-through entity (PTE) must establish and implement subrecipient monitoring policies and procedures, including the following: • At the time of the award, clearly identifying to the subrecipient: 1) The award as a subaward at the time of subaward by providing the information described in 2 CFR § 200.332(a)(1); 2) All requirements imposed by the PTE 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 PTE imposes in order for the PTE to meet its own responsibility for the federal award. • Evaluating the impact of subrecipient activities on the PTE’s ability to comply with applicable federal regulations. Condition: 1. We are unable to obtain an understanding of the CNMI’s process to identify subawards, evaluate risk of noncompliance, and perform monitoring procedures based upon identified risks. 2. The CNMI did not provide a subrecipient agreement. Instead, a memorandum of agreement (MOA) was issued between the CNMI and the subrecipient for reimbursement of costs in the planning and administration of the program. The MOA did not have the following required information: • Subrecipient’s unique entity identifier; • Federal Award Identification Number (FAIN); • Federal award Date of award to the recipient by the Federal agency; • Subaward Period of Performance Start and End Date; • Subaward Budget Period Start and End Date; • Amount of Federal Funds Obligated by this action by CNMI; • Total Amount of Federal Funds Obligated to the subrecipient; • Total amount of the Federal award committed to the subrecipient by CNMI; • Federal award project description, as required to be responsive to the Federal Funding and Transparency Act (FFATA); • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the CNMI; • Identification of whether the award is R&D; and • Indirect cost rate for the Federal award (including if the de minimis rate is charged) 3. Documentation was not provided to demonstrate monitoring procedures were performed on the subrecipient. Total FY2022 subrecipient expenditures amounted to $4,157,924, for which the amount is questioned. 4. There was no evidence of procedures used to monitor the subrecipient’s compliance with applicable laws, regulations, and provisions of contracts and grant agreements. Further, we are aware that the subrecipient is subjected to Single Audits; however, there was no evidence that the Single Audit report was used as a monitoring tool. Cause: 1. CNMI has no existing written subrecipient monitoring policies and procedures; and 2. CNMI failed to enforce compliance with subrecipient monitoring requirements. Effect: The CNMI is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $4,157,924 result for Condition 3. Recommendation: The CNMI should establish written policies and procedures over compliance with applicable subrecipient monitoring requirements and consider obtaining training in the area of subrecipient monitoring. Views of Responsible Officials: Conditions 1 to 4 - The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. Refer to CNMI’s Corrective Action Plan for additional information.
Finding No. 2022-031 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Subrecipient Monitoring Questioned Costs: $61,003,095 Criteria: Per the U.S. Treasury Interim and Final Rules, the U.S. Treasury is aligning the definition of subrecipient in the final rule with the definition of subrecipient in the Uniform Guidance, wherein, subrecipients are entities that receive a subaward from a recipient to carry out a program or project on behalf of the recipient with the recipient’s Federal award funding but does not include an individual that is a beneficiary of such award. The recipient remains responsible for monitoring and overseeing the subrecipient’s use of Fiscal Recovery Funds and other activities related to the award to ensure that the subrecipient complies with the statutory and regulatory requirements and the terms and conditions of the award. Recipients also remain responsible for reporting to Treasury on their subrecipients’ use of payments from the Fiscal Recovery Funds for the duration of the award. Accordingly, in accordance with 2 CFR § 200.332, pass-through entity (PTE) must: 1. Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A PTE must provide the best available information when some of the information below is unavailable. A PTE must provide the unavailable information when it is obtained. One of the required information includes: (1) Federal award identification: (i) Subrecipient’s unique entity identifier; (ii) Federal Award Identification Number (FAIN); (iii) Subaward Period of Performance Start and End Date; (iv) Subaward Budget Period Start and End Date; (v) Amount of Federal Funds Obligated in the subaward; (vi) Total Amount of Federal Funds Obligated to the subrecipient by the PTE, including the current financial obligation; (vii) Total Amount of Federal Funds Obligated to the subrecipient by the PTE, including the current financial obligation; and (viii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement. (2) All requirements of the subaward, including requirements imposed by Federal statutes, regulations, and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity to meet its responsibilities under the Federal award. This includes information and certifications (see § 200.415) required for submitting financial and performance reports that the pass-through entity must provide to the Federal agency; (4) A requirement that the subrecipient permit the pass-through entity and auditors to access the subrecipient's records and financial statements for the pass-through entity to fulfill its monitoring requirements; and (5) Appropriate terms and conditions concerning the closeout of the subaward. 2. Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient’s risk, a PTE should consider the following: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have 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 any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). 3. Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The PTE is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a PTE must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the PTE as required by §200.521. (4) Resolve audit findings specifically related to the subaward. However, the PTE is not responsible for resolving cross-cutting audit findings that apply to the subaward and other Federal awards or subawards. If a subrecipient has a current Single Audit report and has not been excluded from receiving Federal funding (meaning, has not been debarred or suspended), the PTE may rely on the subrecipient’s cognizant agency for audit or oversight agency for audit to perform audit follow-up and make management decisions related to cross-cutting audit findings in accordance with section § 200.513(a)(4)(viii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 4. Verify that a subrecipient is audited as required by subpart F. 5. Consider whether the results of a subrecipient's audit, site visits, or other monitoring necessitate adjustments to the pass-through entity's records. Further, in accordance with 31 CFR § 19.300, prior to entering into subawards with award funds, recipients must verify that such subrecipients are not suspended, debarred, or otherwise excluded from receiving federal funds. Condition: 1. Of seventeen subrecipients tested, aggregating $60,403,095 of a total population of $61,003,095, the following were noted: a. For seventeen (or 100%), documentations of the risk assessments performed and verification as to whether the subrecipients are not suspended or debarred were not provided. b. For two (or 12%), subrecipient agreements were not provided. No questioned costs are presented as amounts are questioned at Condition 1a. c. For two (or 12%), subrecipients’ unique entity identifiers, the federal award identification numbers (FAIN), amounts of federal funds obligated by this action by the PTE to the subrecipients, total amount of federal funds obligated to the subrecipients by the PTE, including the current financial obligations and the appropriate terms and conditions concerning the closeout of the subawards, were not included in the subrecipient agreements. No questioned costs are presented as amounts are questioned at Condition 1a. d. For ten (or 59%), subawards were supported with financial assistance request letters from the subrecipients and not with a subaward agreement that CNMI utilizes for other subawards. Accordingly, other than the date of request, amount requested and purpose of the financial assistance, all other required subaward information pursuant to 2 CFR § 200.332, were not indicated. No questioned costs as amounts are questioned at Condition 1a. e. For one (or 6%), no monitoring procedures were performed. No questioned cost is presented as the amount is questioned at Condition 1a. 2. Of sixteen subrecipient monitoring procedure requirements tested, aggregating $58,537,352 of a total population of $58,537,352, for sixteen (or 100%), documentation on monitoring procedures performed were not provided. In addition, documentation of preventive measures taken to mitigate risk from subrecipients that showed elevated risk factors or for identified unallowable activities were not documented and no verification as to whether the subrecipients are subject to the audit requirements. 3. Of sixty monitoring procedure requirements tested at the invoice/disbursement level, aggregating $58,438,922 of a total population of $61,003,095, the following were noted: a. For six (or 10%), review and approval of invoices and/or payments to ensure that subrecipients used the subaward for authorized purposes in compliance with Federal statutes, regulations, and the terms and conditions of the subawards, were not evident. No questioned costs are presented as expenditures pertain to subawards that were questioned at Condition 1a for Award Numbers CNMI22037 and COVID-19 Care Force Project. b. For twenty-four (or 40%), either the check payments and/or invoices or equivalent documentations were not provided; accordingly, the CNMI was not able to substantiate that monitoring procedures were performed to ensure that subrecipients used the subaward for authorized purposes in compliance with Federal statutes, regulations, and the terms and conditions of the subawards. No questioned costs are presented as expenditures pertain to subawards that were questioned at Condition 1a for Award Numbers NMPMG, CNMI 22037, CNMI22044 and COVID-19 Care Force Project and at Condition 2 for Award Reference Number 5302. Cause: The CNMI does not have approved/adopted written subrecipient monitoring policies and procedures. In addition, the CNMI failed to enforce compliance with subrecipient monitoring requirements and lacks monitoring controls over the following: 1. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 2. Adequate documentation and systematic filing of relevant documentation supporting program costs. In addition, for award number CNMI22044, the Entity’s management has determined that it should be classified as a contractor under the agreement as the Entity’s role is to promote the program within the CNMI, develop a marketing and promotional campaign and disburse the award to the recipients identified by the CNMI. The Entity was not involved in reviewing and deciding which grant applicant is eligible to receive the grant. CNMI’s role in the review of grant applications and eligibility determination may have caused confusion as to whether the Entity that received the funds is a subrecipient or a contractor. As of the auditor’s report date, the CNMI and the Entity have yet to conclude whether the Entity received the funds in the role of a subrecipient or a contractor. Effect: The CNMI is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $61,003,095 for Condition 1. Identification as a Repeat Finding: Finding No. 2021-033 Recommendation: We recommend the CNMI establish approved/adopted written subrecipient monitoring policies and procedures and an approved template that includes all required clauses needed for subrecipient agreements. In addition, CNMI should implement monitoring internal control procedures over the following: 1. Preventive measures taken to mitigate risk from subrecipients that showed elevated risk factors or for identified unallowable activities are adequately documented. Recommendation, continued: 2. Verification that subrecipients are audited as required by subpart F; 3. Monitoring activities of a subrecipient to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward; 4. Provide subrecipients with training and technical assistance on program-related matters, including thorough explanation of their role as subrecipients; 5. Adequate documentation and systematic filing of relevant documentation to support program costs. Views of Responsible Officials: Conditions 1 to 3 - The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. Refer to CNMI’s Corrective Action Plan for additional information.
Finding No. 2022-044 Federal Agency: U.S. Department of the Homeland Security AL Program: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award No.: FEMA-4396-DR; FEMA-4234-DR, FEMA-4404-DR; FEMA-4511-DR Area: Subrecipient Monitoring Questioned Costs: $1,540,330 Criteria: In accordance with 2 CFR 200.332(e), a pass-through entity (PTE) must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The PTE is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a PTE must review financial and performance reports. Further, in accordance with 2 CFR 200.332(g), a PTE must verify that a subrecipient is audited as required by Subpart F when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Condition: 1. Of eight subrecipients tested, aggregating $1,540,330, of a total population of $6,850,955, the following were noted: a. For eight (or 100%), evidence of CNMI’s review of financial and programmatic reports were not provided. b. For two or (25%) subrecipients, the CNMI did not perform appropriate review and follow up of the subrecipients’ audited financial statements for fiscal year 2022, dated April 30, 2024 and February 23, 2024. The subrecipients’ SEFA failed to include the federal awards it received from the CNMI. No questioned costs are presented as the amounts are questioned at Condition 1a. 2. No evidence was provided of procedures used to determine that subrecipients expending $750,000 or more in Federal awards have met the audit requirement of 2 CFR part 200, subpart F and that the required audits are completed within nine months of the end of the subrecipient’s audit period. In addition, we are aware that Project Strings 8812210010, 8812210015, and FG88120004 Single Audit Reports were due; however, the audits are still ongoing. Cause: The CNMI failed to enforce compliance with subrecipient monitoring requirements. Effect: The CNMI is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $1,540,330 result for Condition 1a. Recommendation: The CNMI should consider developing a tracking system to monitor compliance with applicable subrecipient monitoring requirements. Views of Responsible Officials: Conditions 1 and 2 - The Public Assistance Office agrees with this finding and acknowledges that, as the pass-through entity, we are responsible for monitoring subrecipients. Refer to CNMI’s Corrective Action Plan for additional information.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Finding 2022-002: Subrecipient Monitoring Federal Department: Americorps (Corporation for National and Community Service) Pass-through Agencies: Connecticut Office of Higher Education Illinois Department of Public Health Illinois Department of Human Services Indiana Department of Workforce Development Wisconsin National and Community Service Board Americorps State and National, Federal Assistance Listing Number 94.006 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.? Condition During the current audit period, we noted Public Allies did not perform adequate monitoring of its subrecipient as required by Federal regulations. Cause Based on discussions with management, this occurred due to staffing turnovers, which resulted in challenges and a disruption in the planned implementation and/or carrying out of the monitoring plan and risk assessment as well as collection of adequate documentation to meet requirements. 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 Public Allies? inability to adequately perform risk assessments on its subrecipient(s). Questioned Costs None. Context During the current audit period, we noted 12 subrecipients were awarded funds. During our review of 3 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 Public Allies? evaluation of each subrecipients risk of noncompliance. Also, while Public Allies did obtain a copy of the subrecipient?s Single Audit Report, we were not provided with any evidence of Public Allies? review of the report, including and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3). Identification of Repeated Findings None. Recommendation We recommend Public Allies update its written procedures to document the monitoring of its subrecipients in accordance with 2 CFR 200.332. 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 Official and Planned Corrective Action Public Allies agree with the finding and recommendation. See Public Allies? Corrective Action Plan on pages 41-42.
Assistance Listing 93.558 Temporary Assistance for Needy Families Condition: Two out of two subrecipients selected for testing did not have one or more required elements defined in §2CFR 200.332 (a)(1) & (2) in their subrecipient agreements with the Mayor’s Office of Community Empowerment and Opportunity. For one subrecipient, the contract did not contain specific language indicating the Federal assistance listing number or title. For the other subrecipient, the contract did not have the federal compliance language to ensure subrecipient’s compliance with federal statutes, regulations, and the terms of the federal award. The funding source for this program is the PA Department of Human Services. Criteria: §2CFR 200.332 (a)(1) & (2) state that the pass-through entity must ensure every subaward is clearly identified to the subrecipient by including assistance listing numbers and titles, and the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. Effect: Failure to provide all the required subaward information may result in noncompliance at the subrecipient level. Cause: The Mayor’s Office of Community Empowerment and Opportunity failed to include the required elements in the subrecipient agreements. Recommendation: We recommend that management modify and/or strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward. Views of the Responsible Officials and Corrective Action Plan: Management agrees with the finding and recommendation. Starting from FY2024, MOCEO will include a Notice of Award document for all subrecipients contracts. This document will contain the necessary OMB required information to clearly identify award details for the subrecipient. Contact Person: Allison Elliott, Director of Finance, Mayor’s Office of Community Empowerment and Opportunity, 215-685-3626
Children and Youth Programs Assistance Listing 93.558 Temporary Assistance for Needy Families Assistance Listing 93.658 Foster Care – Title IV-E Act 148 Pennsylvania Department of Human Services Condition: For all 32 sampled Department of Human Services (DHS) subrecipients, the subaward letters sent by DHS to its subrecipients did not identify either the federal program names or the assistance listing numbers. The programs are funded through the Pennsylvania Department of Human Services. Criteria: Per the OMB’s Uniform Guidance 2 CFR section 200.332 (a)(1), the pass-through entity must ensure every subaward is clearly identified to the subrecipient as a subaward and includes certain required information at the time of the subaward. Required information includes the federal award identification, such as the assistance listing number and title, to ensure that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the federal award. Effect: Failure to provide all required subaward information to subrecipients may result in noncompliance at the subrecipient level. Cause: DHS failed to include the required elements in the subaward letters sent to subrecipients. Recommendation: DHS management should modify the subaward letters sent to subrecipients to include the federal program names and assistance listing numbers so that all required award information is communicated to subrecipients at the time of subaward. Views of the Responsible Officials and Corrective Action Plan: Effective 10/13/23, DHS has been preparing FY24 funding allocation letters that will be sent to provider agencies immediately. Going forward, the funding allocation letters will go out at the beginning of the contract fiscal year. Contact Person: Landuleni Shipanga, Controller, Department of Human Services, 215-683-6366.
Children and Youth Programs Assistance Listing 93.558 Temporary Assistance for Needy Families Assistance Listing 93.658 Foster Care – Title IV-E Act 148 Pennsylvania Department of Human Services Condition: For all 32 sampled Department of Human Services (DHS) subrecipients, the subaward letters sent by DHS to its subrecipients did not identify either the federal program names or the assistance listing numbers. The programs are funded through the Pennsylvania Department of Human Services. Criteria: Per the OMB’s Uniform Guidance 2 CFR section 200.332 (a)(1), the pass-through entity must ensure every subaward is clearly identified to the subrecipient as a subaward and includes certain required information at the time of the subaward. Required information includes the federal award identification, such as the assistance listing number and title, to ensure that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the federal award. Effect: Failure to provide all required subaward information to subrecipients may result in noncompliance at the subrecipient level. Cause: DHS failed to include the required elements in the subaward letters sent to subrecipients. Recommendation: DHS management should modify the subaward letters sent to subrecipients to include the federal program names and assistance listing numbers so that all required award information is communicated to subrecipients at the time of subaward. Views of the Responsible Officials and Corrective Action Plan: Effective 10/13/23, DHS has been preparing FY24 funding allocation letters that will be sent to provider agencies immediately. Going forward, the funding allocation letters will go out at the beginning of the contract fiscal year. Contact Person: Landuleni Shipanga, Controller, Department of Human Services, 215-683-6366.
Assistance Listings numbers and names: 14.231 Emergency Solutions Grant Program 14.231 COVID-19—Emergency Solutions Grant Program Award numbers and years: E-20-DW-04-001, July 1, 2020 through September 9, 2022 E-21-DC-04-001, July 1, 2021 through September 9, 2023 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $1,425 Assistance Listings number and name: 14.267 Continuum of Care Program Award numbers and years: AZ0009L9T001912, October 1, 2020 through September 30, 2021; AZ0118L9T002008, February 1, 2021 through January 31, 2022; AZ0011L9T002013, May 1, 2021 through April 30, 2022; AZ0173L9T002004, July 1, 2021 through June 30, 2022; AZ0009L9T002013, October 1, 2021 through September 30, 2022 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $46,352 Compliance requirement: Subrecipient monitoring Total questioned costs: $47,777 Condition—Contrary to federal regulations and its federal award terms, the Department of Housing (ADOH) and Department of Economic Security (DES) reimbursed 1 nonprofit organization subrecipient for federal program costs totaling $47,777 during fiscal year 2022 that were unsupported, unallowable, and/or paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements. Specifically, we reviewed 51 reimbursements that included Continuum of Care Program and Emergency Solutions Grant Program costs totaling $446,695 and $10,692 for the year, respectively, and found that the departments reimbursed the subrecipient for: • $35,562 for financial and accounting services, travel, and supplies that were paid to 1 of the nonprofit organization’s principal officers, who served as the Treasurer, and their company, which was not disclosed as a conflict of interest to both departments as required by federal laws. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, neither department verified that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. We noted that the allocation method used may have resulted in multiple programs being overbilled for these services by up to $5,087. (ADOH and DES) • $7,274 for bookkeeping services that were not adequately supported by sufficiently detailed invoices and a signed contract having a specified price rate for the services and terms; therefore, we were unable to verify if the amounts paid were appropriate. Further, the departments reimbursed the Treasurer’s family member, whose bookkeeping services company was not disclosed as a conflict of interest to the departments as required by federal regulations. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, the departments did not verify that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. (ADOH and DES) • $4,365 for repairs and maintenance, travel, and supplies that were paid to another principal officer who performed various handyman services, including plumbing, painting, and building repairs, that were not adequately supported by a contract having specified price rates for the services and terms; therefore, we were unable to verify if the amounts reimbursed by ADOH were appropriate. Further, ADOH reimbursed the principal officer, whose services were not disclosed as a conflict of interest to ADOH as required by its contract with the subrecipient and federal regulations. (ADOH) • $576 for incentive payments to the subrecipient’s executive director without documentation demonstrating it was authorized by an agreement, reasonable for the services performed as provided in the subrecipient’s policies, and consistent with compensation paid for similar work in other activities; therefore, we were unable to verify if the amounts reimbursed by ADOH were allowable. (ADOH) Additionally, contrary to federal regulations, the departments had not ensured that the subrecipient implemented competitive purchasing procedures when procuring the professional services and handyman services described above, and the subrecipient was unable to provide documentation that it had competitively procured the services. (ADOH and DES) The Continuum of Care and the Emergency Solutions Grant Programs were not audited as major federal programs for the State’s fiscal year 2022 single audit; therefore, the scope of our review was not sufficient to determine whether the departments or their subrecipients complied with all applicable federal requirements for these programs. During the audit, we became aware of the potentially noncompliant 51 reimbursements involving 1 of the departments’ nonprofit subrecipients with which they partner to carry out federal and State programs, including the Continuum of Care Program, the Emergency Solutions Grants Program, and Temporary Assistance to Needy Families (TANF), which was audited as a major federal program for fiscal year 2022, as well as the State Housing Trust Fund. Our review of select reimbursements to this subrecipient resulted in similar findings for the TANF federal program and the State Housing Trust Fund that are described in items 2022-114 and 2022-05, respectively. Effect—The departments’ lack of required monitoring increased the risk that the monies it awarded to 1 nonprofit organization may not have been spent in accordance with the award terms and program requirements. Further, the departments’ reimbursing the subrecipient for $47,777 of unallowable or unsupported costs and/or costs paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements resulted in those monies being unavailable to be spent for their intended purpose of providing housing assistance to those in need. Consequently, the departments may be required to return these monies to the federal agencies in accordance with federal requirements.1 Cause—ADOH had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. Also, ADOH had not properly assessed this subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, ADOH was unaware that the subrecipient had not informed it of principal officers’ conflicts of interest so that ADOH could ensure that those principal officers or their immediate family member were not involved in decision-making related to those conflicts and selectively reviewed the related costs and activities for compliance purposes. Further, ADOH personnel responsible for reviewing and approving the subrecipient’s reimbursement requests reported to us that they were trained to not follow its policies and procedures but, instead, to approve any costs that had been previously reimbursed. As reported in finding 2022-114, although the DES subrecipient-monitoring policies and procedures did not require it to obtain from subrecipients documentation supporting charges for personal and contracted professional services to verify allowability when subrecipients requested reimbursement, the policies and procedures required an on-site monitoring visit once every 3 years for each subrecipient in which it reviews a sample of the subrecipient’s personal and professional services charges. However, DES had not performed an on-site monitoring visit of the nonprofit subrecipient since 2018 because it had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. In addition, DES had not properly assessed the subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, the Division was unaware that the subrecipient had not informed it of a principal officer’s conflicts of interest so that the Division could ensure that the principal officer or their immediate family member were not involved in decision-making related to those conflicts and selectively review the related costs and activities for compliance purposes. Criteria—Federal regulations require the Departments to monitor subrecipients and include required procedures for assessing the risk of each subrecipient’s noncompliance and implementing appropriate monitoring procedures to address those risk assessments; verifying single audits were conducted timely, if required; reviewing financial and performance reports; following up on and ensuring corrective action is taken on deficiencies that could potentially affect the program; and issuing management decisions on the results of audit findings or monitoring (2 CFR §§200.332, .339, and .521). Federal regulations provide that monitoring procedures the Departments may implement to address a subrecipient’s risk assessment include providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs (2 CFR §200.332[e]). Further, federal regulations require the Departments’ subrecipients to allocate allowable costs using a reasonable basis, to use competitive purchasing standards when procuring goods and services, and to disclose in writing to the Departments any potential conflicts of interest.2 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Departments should: 1. Immediately stop reimbursing the nonprofit subrecipient for costs that are unsupported, unallowable, and/or paid to the nonprofit subrecipient’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements without obtaining documentation to support they comply with the program’s requirements and take appropriate enforcement actions in accordance with its subaward contract. (ADOH and DES) 2. Update its written policies and procedures for reviewing and approving subrecipient reimbursement requests to include a process to ensure costs are adequately supported and allowable in accordance with program requirements. (ADOH and DES) 3. Train personnel responsible for reviewing and approving subrecipient reimbursement requests on how to identify costs that are unallowable under federal regulations. (ADOH) 4. Assess the risk of each subrecipient’s noncompliance and perform the appropriate monitoring procedures based on the assessed risk, such as providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs for allowability. (ADOH and DES) 5. Ensure subrecipients allocate allowable costs using a reasonable basis, use competitive purchasing standards when procuring goods and services, and disclose in writing to the Departments any potential conflicts of interest. The Departments may need to provide training and technical assistance to subrecipients that addresses these compliance areas, including the Departments’ obtaining conflict-of-interest disclosures from subrecipients as part of the subaward contract, as an example, or otherwise establishing a communication mechanism for subrecipients to use as such conflicts arise. (ADOH and DES) 6. Continue to work with the nonprofit subrecipient to resolve the $47,777 in unallowable costs, including recovering these monies from the subrecipient and assessing the continued need to use this subrecipient for services. (ADOH and DES) 7. Work with the federal agencies to resolve the $47,777 of unallowable costs that it reimbursed, which may involve returning monies to the agencies. (ADOH and DES) The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 The applicable federal requirements related to allowable costs, competitive purchasing, and conflicts of interest can be found in the Code of Federal Regulations at 2 CFR §§200.112, .318-.327, and Subpart E, and 24 CFR §578.95 and 45 CFR §75.112.
Assistance Listings numbers and names: 14.231 Emergency Solutions Grant Program 14.231 COVID-19—Emergency Solutions Grant Program Award numbers and years: E-20-DW-04-001, July 1, 2020 through September 9, 2022 E-21-DC-04-001, July 1, 2021 through September 9, 2023 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $1,425 Assistance Listings number and name: 14.267 Continuum of Care Program Award numbers and years: AZ0009L9T001912, October 1, 2020 through September 30, 2021; AZ0118L9T002008, February 1, 2021 through January 31, 2022; AZ0011L9T002013, May 1, 2021 through April 30, 2022; AZ0173L9T002004, July 1, 2021 through June 30, 2022; AZ0009L9T002013, October 1, 2021 through September 30, 2022 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $46,352 Compliance requirement: Subrecipient monitoring Total questioned costs: $47,777 Condition—Contrary to federal regulations and its federal award terms, the Department of Housing (ADOH) and Department of Economic Security (DES) reimbursed 1 nonprofit organization subrecipient for federal program costs totaling $47,777 during fiscal year 2022 that were unsupported, unallowable, and/or paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements. Specifically, we reviewed 51 reimbursements that included Continuum of Care Program and Emergency Solutions Grant Program costs totaling $446,695 and $10,692 for the year, respectively, and found that the departments reimbursed the subrecipient for: • $35,562 for financial and accounting services, travel, and supplies that were paid to 1 of the nonprofit organization’s principal officers, who served as the Treasurer, and their company, which was not disclosed as a conflict of interest to both departments as required by federal laws. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, neither department verified that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. We noted that the allocation method used may have resulted in multiple programs being overbilled for these services by up to $5,087. (ADOH and DES) • $7,274 for bookkeeping services that were not adequately supported by sufficiently detailed invoices and a signed contract having a specified price rate for the services and terms; therefore, we were unable to verify if the amounts paid were appropriate. Further, the departments reimbursed the Treasurer’s family member, whose bookkeeping services company was not disclosed as a conflict of interest to the departments as required by federal regulations. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, the departments did not verify that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. (ADOH and DES) • $4,365 for repairs and maintenance, travel, and supplies that were paid to another principal officer who performed various handyman services, including plumbing, painting, and building repairs, that were not adequately supported by a contract having specified price rates for the services and terms; therefore, we were unable to verify if the amounts reimbursed by ADOH were appropriate. Further, ADOH reimbursed the principal officer, whose services were not disclosed as a conflict of interest to ADOH as required by its contract with the subrecipient and federal regulations. (ADOH) • $576 for incentive payments to the subrecipient’s executive director without documentation demonstrating it was authorized by an agreement, reasonable for the services performed as provided in the subrecipient’s policies, and consistent with compensation paid for similar work in other activities; therefore, we were unable to verify if the amounts reimbursed by ADOH were allowable. (ADOH) Additionally, contrary to federal regulations, the departments had not ensured that the subrecipient implemented competitive purchasing procedures when procuring the professional services and handyman services described above, and the subrecipient was unable to provide documentation that it had competitively procured the services. (ADOH and DES) The Continuum of Care and the Emergency Solutions Grant Programs were not audited as major federal programs for the State’s fiscal year 2022 single audit; therefore, the scope of our review was not sufficient to determine whether the departments or their subrecipients complied with all applicable federal requirements for these programs. During the audit, we became aware of the potentially noncompliant 51 reimbursements involving 1 of the departments’ nonprofit subrecipients with which they partner to carry out federal and State programs, including the Continuum of Care Program, the Emergency Solutions Grants Program, and Temporary Assistance to Needy Families (TANF), which was audited as a major federal program for fiscal year 2022, as well as the State Housing Trust Fund. Our review of select reimbursements to this subrecipient resulted in similar findings for the TANF federal program and the State Housing Trust Fund that are described in items 2022-114 and 2022-05, respectively. Effect—The departments’ lack of required monitoring increased the risk that the monies it awarded to 1 nonprofit organization may not have been spent in accordance with the award terms and program requirements. Further, the departments’ reimbursing the subrecipient for $47,777 of unallowable or unsupported costs and/or costs paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements resulted in those monies being unavailable to be spent for their intended purpose of providing housing assistance to those in need. Consequently, the departments may be required to return these monies to the federal agencies in accordance with federal requirements.1 Cause—ADOH had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. Also, ADOH had not properly assessed this subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, ADOH was unaware that the subrecipient had not informed it of principal officers’ conflicts of interest so that ADOH could ensure that those principal officers or their immediate family member were not involved in decision-making related to those conflicts and selectively reviewed the related costs and activities for compliance purposes. Further, ADOH personnel responsible for reviewing and approving the subrecipient’s reimbursement requests reported to us that they were trained to not follow its policies and procedures but, instead, to approve any costs that had been previously reimbursed. As reported in finding 2022-114, although the DES subrecipient-monitoring policies and procedures did not require it to obtain from subrecipients documentation supporting charges for personal and contracted professional services to verify allowability when subrecipients requested reimbursement, the policies and procedures required an on-site monitoring visit once every 3 years for each subrecipient in which it reviews a sample of the subrecipient’s personal and professional services charges. However, DES had not performed an on-site monitoring visit of the nonprofit subrecipient since 2018 because it had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. In addition, DES had not properly assessed the subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, the Division was unaware that the subrecipient had not informed it of a principal officer’s conflicts of interest so that the Division could ensure that the principal officer or their immediate family member were not involved in decision-making related to those conflicts and selectively review the related costs and activities for compliance purposes. Criteria—Federal regulations require the Departments to monitor subrecipients and include required procedures for assessing the risk of each subrecipient’s noncompliance and implementing appropriate monitoring procedures to address those risk assessments; verifying single audits were conducted timely, if required; reviewing financial and performance reports; following up on and ensuring corrective action is taken on deficiencies that could potentially affect the program; and issuing management decisions on the results of audit findings or monitoring (2 CFR §§200.332, .339, and .521). Federal regulations provide that monitoring procedures the Departments may implement to address a subrecipient’s risk assessment include providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs (2 CFR §200.332[e]). Further, federal regulations require the Departments’ subrecipients to allocate allowable costs using a reasonable basis, to use competitive purchasing standards when procuring goods and services, and to disclose in writing to the Departments any potential conflicts of interest.2 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Departments should: 1. Immediately stop reimbursing the nonprofit subrecipient for costs that are unsupported, unallowable, and/or paid to the nonprofit subrecipient’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements without obtaining documentation to support they comply with the program’s requirements and take appropriate enforcement actions in accordance with its subaward contract. (ADOH and DES) 2. Update its written policies and procedures for reviewing and approving subrecipient reimbursement requests to include a process to ensure costs are adequately supported and allowable in accordance with program requirements. (ADOH and DES) 3. Train personnel responsible for reviewing and approving subrecipient reimbursement requests on how to identify costs that are unallowable under federal regulations. (ADOH) 4. Assess the risk of each subrecipient’s noncompliance and perform the appropriate monitoring procedures based on the assessed risk, such as providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs for allowability. (ADOH and DES) 5. Ensure subrecipients allocate allowable costs using a reasonable basis, use competitive purchasing standards when procuring goods and services, and disclose in writing to the Departments any potential conflicts of interest. The Departments may need to provide training and technical assistance to subrecipients that addresses these compliance areas, including the Departments’ obtaining conflict-of-interest disclosures from subrecipients as part of the subaward contract, as an example, or otherwise establishing a communication mechanism for subrecipients to use as such conflicts arise. (ADOH and DES) 6. Continue to work with the nonprofit subrecipient to resolve the $47,777 in unallowable costs, including recovering these monies from the subrecipient and assessing the continued need to use this subrecipient for services. (ADOH and DES) 7. Work with the federal agencies to resolve the $47,777 of unallowable costs that it reimbursed, which may involve returning monies to the agencies. (ADOH and DES) The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 The applicable federal requirements related to allowable costs, competitive purchasing, and conflicts of interest can be found in the Code of Federal Regulations at 2 CFR §§200.112, .318-.327, and Subpart E, and 24 CFR §578.95 and 45 CFR §75.112.
Assistance Listings numbers and names: 14.231 Emergency Solutions Grant Program 14.231 COVID-19—Emergency Solutions Grant Program Award numbers and years: E-20-DW-04-001, July 1, 2020 through September 9, 2022 E-21-DC-04-001, July 1, 2021 through September 9, 2023 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $1,425 Assistance Listings number and name: 14.267 Continuum of Care Program Award numbers and years: AZ0009L9T001912, October 1, 2020 through September 30, 2021; AZ0118L9T002008, February 1, 2021 through January 31, 2022; AZ0011L9T002013, May 1, 2021 through April 30, 2022; AZ0173L9T002004, July 1, 2021 through June 30, 2022; AZ0009L9T002013, October 1, 2021 through September 30, 2022 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $46,352 Compliance requirement: Subrecipient monitoring Total questioned costs: $47,777 Condition—Contrary to federal regulations and its federal award terms, the Department of Housing (ADOH) and Department of Economic Security (DES) reimbursed 1 nonprofit organization subrecipient for federal program costs totaling $47,777 during fiscal year 2022 that were unsupported, unallowable, and/or paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements. Specifically, we reviewed 51 reimbursements that included Continuum of Care Program and Emergency Solutions Grant Program costs totaling $446,695 and $10,692 for the year, respectively, and found that the departments reimbursed the subrecipient for: • $35,562 for financial and accounting services, travel, and supplies that were paid to 1 of the nonprofit organization’s principal officers, who served as the Treasurer, and their company, which was not disclosed as a conflict of interest to both departments as required by federal laws. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, neither department verified that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. We noted that the allocation method used may have resulted in multiple programs being overbilled for these services by up to $5,087. (ADOH and DES) • $7,274 for bookkeeping services that were not adequately supported by sufficiently detailed invoices and a signed contract having a specified price rate for the services and terms; therefore, we were unable to verify if the amounts paid were appropriate. Further, the departments reimbursed the Treasurer’s family member, whose bookkeeping services company was not disclosed as a conflict of interest to the departments as required by federal regulations. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, the departments did not verify that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. (ADOH and DES) • $4,365 for repairs and maintenance, travel, and supplies that were paid to another principal officer who performed various handyman services, including plumbing, painting, and building repairs, that were not adequately supported by a contract having specified price rates for the services and terms; therefore, we were unable to verify if the amounts reimbursed by ADOH were appropriate. Further, ADOH reimbursed the principal officer, whose services were not disclosed as a conflict of interest to ADOH as required by its contract with the subrecipient and federal regulations. (ADOH) • $576 for incentive payments to the subrecipient’s executive director without documentation demonstrating it was authorized by an agreement, reasonable for the services performed as provided in the subrecipient’s policies, and consistent with compensation paid for similar work in other activities; therefore, we were unable to verify if the amounts reimbursed by ADOH were allowable. (ADOH) Additionally, contrary to federal regulations, the departments had not ensured that the subrecipient implemented competitive purchasing procedures when procuring the professional services and handyman services described above, and the subrecipient was unable to provide documentation that it had competitively procured the services. (ADOH and DES) The Continuum of Care and the Emergency Solutions Grant Programs were not audited as major federal programs for the State’s fiscal year 2022 single audit; therefore, the scope of our review was not sufficient to determine whether the departments or their subrecipients complied with all applicable federal requirements for these programs. During the audit, we became aware of the potentially noncompliant 51 reimbursements involving 1 of the departments’ nonprofit subrecipients with which they partner to carry out federal and State programs, including the Continuum of Care Program, the Emergency Solutions Grants Program, and Temporary Assistance to Needy Families (TANF), which was audited as a major federal program for fiscal year 2022, as well as the State Housing Trust Fund. Our review of select reimbursements to this subrecipient resulted in similar findings for the TANF federal program and the State Housing Trust Fund that are described in items 2022-114 and 2022-05, respectively. Effect—The departments’ lack of required monitoring increased the risk that the monies it awarded to 1 nonprofit organization may not have been spent in accordance with the award terms and program requirements. Further, the departments’ reimbursing the subrecipient for $47,777 of unallowable or unsupported costs and/or costs paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements resulted in those monies being unavailable to be spent for their intended purpose of providing housing assistance to those in need. Consequently, the departments may be required to return these monies to the federal agencies in accordance with federal requirements.1 Cause—ADOH had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. Also, ADOH had not properly assessed this subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, ADOH was unaware that the subrecipient had not informed it of principal officers’ conflicts of interest so that ADOH could ensure that those principal officers or their immediate family member were not involved in decision-making related to those conflicts and selectively reviewed the related costs and activities for compliance purposes. Further, ADOH personnel responsible for reviewing and approving the subrecipient’s reimbursement requests reported to us that they were trained to not follow its policies and procedures but, instead, to approve any costs that had been previously reimbursed. As reported in finding 2022-114, although the DES subrecipient-monitoring policies and procedures did not require it to obtain from subrecipients documentation supporting charges for personal and contracted professional services to verify allowability when subrecipients requested reimbursement, the policies and procedures required an on-site monitoring visit once every 3 years for each subrecipient in which it reviews a sample of the subrecipient’s personal and professional services charges. However, DES had not performed an on-site monitoring visit of the nonprofit subrecipient since 2018 because it had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. In addition, DES had not properly assessed the subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, the Division was unaware that the subrecipient had not informed it of a principal officer’s conflicts of interest so that the Division could ensure that the principal officer or their immediate family member were not involved in decision-making related to those conflicts and selectively review the related costs and activities for compliance purposes. Criteria—Federal regulations require the Departments to monitor subrecipients and include required procedures for assessing the risk of each subrecipient’s noncompliance and implementing appropriate monitoring procedures to address those risk assessments; verifying single audits were conducted timely, if required; reviewing financial and performance reports; following up on and ensuring corrective action is taken on deficiencies that could potentially affect the program; and issuing management decisions on the results of audit findings or monitoring (2 CFR §§200.332, .339, and .521). Federal regulations provide that monitoring procedures the Departments may implement to address a subrecipient’s risk assessment include providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs (2 CFR §200.332[e]). Further, federal regulations require the Departments’ subrecipients to allocate allowable costs using a reasonable basis, to use competitive purchasing standards when procuring goods and services, and to disclose in writing to the Departments any potential conflicts of interest.2 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Departments should: 1. Immediately stop reimbursing the nonprofit subrecipient for costs that are unsupported, unallowable, and/or paid to the nonprofit subrecipient’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements without obtaining documentation to support they comply with the program’s requirements and take appropriate enforcement actions in accordance with its subaward contract. (ADOH and DES) 2. Update its written policies and procedures for reviewing and approving subrecipient reimbursement requests to include a process to ensure costs are adequately supported and allowable in accordance with program requirements. (ADOH and DES) 3. Train personnel responsible for reviewing and approving subrecipient reimbursement requests on how to identify costs that are unallowable under federal regulations. (ADOH) 4. Assess the risk of each subrecipient’s noncompliance and perform the appropriate monitoring procedures based on the assessed risk, such as providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs for allowability. (ADOH and DES) 5. Ensure subrecipients allocate allowable costs using a reasonable basis, use competitive purchasing standards when procuring goods and services, and disclose in writing to the Departments any potential conflicts of interest. The Departments may need to provide training and technical assistance to subrecipients that addresses these compliance areas, including the Departments’ obtaining conflict-of-interest disclosures from subrecipients as part of the subaward contract, as an example, or otherwise establishing a communication mechanism for subrecipients to use as such conflicts arise. (ADOH and DES) 6. Continue to work with the nonprofit subrecipient to resolve the $47,777 in unallowable costs, including recovering these monies from the subrecipient and assessing the continued need to use this subrecipient for services. (ADOH and DES) 7. Work with the federal agencies to resolve the $47,777 of unallowable costs that it reimbursed, which may involve returning monies to the agencies. (ADOH and DES) The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 The applicable federal requirements related to allowable costs, competitive purchasing, and conflicts of interest can be found in the Code of Federal Regulations at 2 CFR §§200.112, .318-.327, and Subpart E, and 24 CFR §578.95 and 45 CFR §75.112.
Assistance Listings numbers and names: 14.231 Emergency Solutions Grant Program 14.231 COVID-19—Emergency Solutions Grant Program Award numbers and years: E-20-DW-04-001, July 1, 2020 through September 9, 2022 E-21-DC-04-001, July 1, 2021 through September 9, 2023 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $1,425 Assistance Listings number and name: 14.267 Continuum of Care Program Award numbers and years: AZ0009L9T001912, October 1, 2020 through September 30, 2021; AZ0118L9T002008, February 1, 2021 through January 31, 2022; AZ0011L9T002013, May 1, 2021 through April 30, 2022; AZ0173L9T002004, July 1, 2021 through June 30, 2022; AZ0009L9T002013, October 1, 2021 through September 30, 2022 Federal agency: U.S. Department of Housing and Urban Development Questioned costs: $46,352 Compliance requirement: Subrecipient monitoring Total questioned costs: $47,777 Condition—Contrary to federal regulations and its federal award terms, the Department of Housing (ADOH) and Department of Economic Security (DES) reimbursed 1 nonprofit organization subrecipient for federal program costs totaling $47,777 during fiscal year 2022 that were unsupported, unallowable, and/or paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements. Specifically, we reviewed 51 reimbursements that included Continuum of Care Program and Emergency Solutions Grant Program costs totaling $446,695 and $10,692 for the year, respectively, and found that the departments reimbursed the subrecipient for: • $35,562 for financial and accounting services, travel, and supplies that were paid to 1 of the nonprofit organization’s principal officers, who served as the Treasurer, and their company, which was not disclosed as a conflict of interest to both departments as required by federal laws. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, neither department verified that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. We noted that the allocation method used may have resulted in multiple programs being overbilled for these services by up to $5,087. (ADOH and DES) • $7,274 for bookkeeping services that were not adequately supported by sufficiently detailed invoices and a signed contract having a specified price rate for the services and terms; therefore, we were unable to verify if the amounts paid were appropriate. Further, the departments reimbursed the Treasurer’s family member, whose bookkeeping services company was not disclosed as a conflict of interest to the departments as required by federal regulations. Also, the subrecipient allocated these costs to other federal programs and nonfederal activities; however, the departments did not verify that the allocation method the subrecipient used was reasonable or that the costs, as allocated, were allowed by the programs’ requirements. (ADOH and DES) • $4,365 for repairs and maintenance, travel, and supplies that were paid to another principal officer who performed various handyman services, including plumbing, painting, and building repairs, that were not adequately supported by a contract having specified price rates for the services and terms; therefore, we were unable to verify if the amounts reimbursed by ADOH were appropriate. Further, ADOH reimbursed the principal officer, whose services were not disclosed as a conflict of interest to ADOH as required by its contract with the subrecipient and federal regulations. (ADOH) • $576 for incentive payments to the subrecipient’s executive director without documentation demonstrating it was authorized by an agreement, reasonable for the services performed as provided in the subrecipient’s policies, and consistent with compensation paid for similar work in other activities; therefore, we were unable to verify if the amounts reimbursed by ADOH were allowable. (ADOH) Additionally, contrary to federal regulations, the departments had not ensured that the subrecipient implemented competitive purchasing procedures when procuring the professional services and handyman services described above, and the subrecipient was unable to provide documentation that it had competitively procured the services. (ADOH and DES) The Continuum of Care and the Emergency Solutions Grant Programs were not audited as major federal programs for the State’s fiscal year 2022 single audit; therefore, the scope of our review was not sufficient to determine whether the departments or their subrecipients complied with all applicable federal requirements for these programs. During the audit, we became aware of the potentially noncompliant 51 reimbursements involving 1 of the departments’ nonprofit subrecipients with which they partner to carry out federal and State programs, including the Continuum of Care Program, the Emergency Solutions Grants Program, and Temporary Assistance to Needy Families (TANF), which was audited as a major federal program for fiscal year 2022, as well as the State Housing Trust Fund. Our review of select reimbursements to this subrecipient resulted in similar findings for the TANF federal program and the State Housing Trust Fund that are described in items 2022-114 and 2022-05, respectively. Effect—The departments’ lack of required monitoring increased the risk that the monies it awarded to 1 nonprofit organization may not have been spent in accordance with the award terms and program requirements. Further, the departments’ reimbursing the subrecipient for $47,777 of unallowable or unsupported costs and/or costs paid to the nonprofit organization’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements resulted in those monies being unavailable to be spent for their intended purpose of providing housing assistance to those in need. Consequently, the departments may be required to return these monies to the federal agencies in accordance with federal requirements.1 Cause—ADOH had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. Also, ADOH had not properly assessed this subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, ADOH was unaware that the subrecipient had not informed it of principal officers’ conflicts of interest so that ADOH could ensure that those principal officers or their immediate family member were not involved in decision-making related to those conflicts and selectively reviewed the related costs and activities for compliance purposes. Further, ADOH personnel responsible for reviewing and approving the subrecipient’s reimbursement requests reported to us that they were trained to not follow its policies and procedures but, instead, to approve any costs that had been previously reimbursed. As reported in finding 2022-114, although the DES subrecipient-monitoring policies and procedures did not require it to obtain from subrecipients documentation supporting charges for personal and contracted professional services to verify allowability when subrecipients requested reimbursement, the policies and procedures required an on-site monitoring visit once every 3 years for each subrecipient in which it reviews a sample of the subrecipient’s personal and professional services charges. However, DES had not performed an on-site monitoring visit of the nonprofit subrecipient since 2018 because it had not yet resumed all its subrecipient-monitoring activities, such as conducting on-site reviews and providing training and technical assistance, since suspending these activities during the COVID-19 pandemic during fiscal year 2020. In addition, DES had not properly assessed the subrecipient’s risk of noncompliance with its award contract and program requirements to determine the level of monitoring procedures or training the subrecipient needed. For example, the Division was unaware that the subrecipient had not informed it of a principal officer’s conflicts of interest so that the Division could ensure that the principal officer or their immediate family member were not involved in decision-making related to those conflicts and selectively review the related costs and activities for compliance purposes. Criteria—Federal regulations require the Departments to monitor subrecipients and include required procedures for assessing the risk of each subrecipient’s noncompliance and implementing appropriate monitoring procedures to address those risk assessments; verifying single audits were conducted timely, if required; reviewing financial and performance reports; following up on and ensuring corrective action is taken on deficiencies that could potentially affect the program; and issuing management decisions on the results of audit findings or monitoring (2 CFR §§200.332, .339, and .521). Federal regulations provide that monitoring procedures the Departments may implement to address a subrecipient’s risk assessment include providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs (2 CFR §200.332[e]). Further, federal regulations require the Departments’ subrecipients to allocate allowable costs using a reasonable basis, to use competitive purchasing standards when procuring goods and services, and to disclose in writing to the Departments any potential conflicts of interest.2 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Departments should: 1. Immediately stop reimbursing the nonprofit subrecipient for costs that are unsupported, unallowable, and/or paid to the nonprofit subrecipient’s principal officers or their immediate family member in violation of conflict-of-interest disclosure requirements without obtaining documentation to support they comply with the program’s requirements and take appropriate enforcement actions in accordance with its subaward contract. (ADOH and DES) 2. Update its written policies and procedures for reviewing and approving subrecipient reimbursement requests to include a process to ensure costs are adequately supported and allowable in accordance with program requirements. (ADOH and DES) 3. Train personnel responsible for reviewing and approving subrecipient reimbursement requests on how to identify costs that are unallowable under federal regulations. (ADOH) 4. Assess the risk of each subrecipient’s noncompliance and perform the appropriate monitoring procedures based on the assessed risk, such as providing training or technical assistance on program-related matters and performing on-site reviews and selective audits of reimbursed costs for allowability. (ADOH and DES) 5. Ensure subrecipients allocate allowable costs using a reasonable basis, use competitive purchasing standards when procuring goods and services, and disclose in writing to the Departments any potential conflicts of interest. The Departments may need to provide training and technical assistance to subrecipients that addresses these compliance areas, including the Departments’ obtaining conflict-of-interest disclosures from subrecipients as part of the subaward contract, as an example, or otherwise establishing a communication mechanism for subrecipients to use as such conflicts arise. (ADOH and DES) 6. Continue to work with the nonprofit subrecipient to resolve the $47,777 in unallowable costs, including recovering these monies from the subrecipient and assessing the continued need to use this subrecipient for services. (ADOH and DES) 7. Work with the federal agencies to resolve the $47,777 of unallowable costs that it reimbursed, which may involve returning monies to the agencies. (ADOH and DES) The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 The applicable federal requirements related to allowable costs, competitive purchasing, and conflicts of interest can be found in the Code of Federal Regulations at 2 CFR §§200.112, .318-.327, and Subpart E, and 24 CFR §578.95 and 45 CFR §75.112.
Assistance Listings number and name: 21.019 COVID-19 Coronavirus Relief Fund Award number and year: None Federal agency: U.S. Department of the Treasury Compliance requirement: Subrecipient monitoring Questioned costs: Unknown Condition—The Arizona Governor’s Office of Strategic Planning and Budgeting (Office) awarded $8.5 million to 9 subrecipients during fiscal year 2022, or 6.6 percent of the Office’s $128.6 million total federal expenditures for this federal program, but did not perform all the required monitoring of the subrecipients’ activities or compliance with the award terms and program requirements. Specifically, the Office performed some monitoring during the year, which consisted only of reviewing some interim and the final financial and activity reports; however, those monitoring procedures alone were not sufficient to evaluate whether subrecipients used program monies in accordance with the terms and program requirements. Effect—The Office’s lack of required monitoring increases the risk that the $8.5 million of program monies the Office awarded to subrecipients may not have been spent in accordance with the award terms and program requirements. If monies are spent inconsistent with program requirements, those who were intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Cause—Office management reported that it did not have enough staff to perform its monitoring procedures, and instead, the Office performed only limited monitoring procedures. Specifically, the Office had policies and procedures to follow for performing the monitoring procedures for its subrecipients, including how it should consider and assess risk of each subrecipient and carry out required and various other monitoring procedures based on those risk assessments. However, Office management reported that its staffing levels were not sufficient to perform all the required procedures. Criteria—Federal regulations require the Office to monitor subrecipients, which includes required monitoring procedures for assessing the risk of each subrecipient’s noncompliance and monitoring activities based on those risk assessments; verifying single audits were conducted timely; following up on and ensuring corrective action is taken on audit findings that could potentially affect the program; and issuing a management decision for audit findings pertaining to the federal award. Those federal regulations also provide that monitoring procedures may include reviewing financial and performance reports, providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures (2 CFR §§200.332[b] and [d – e]). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Office should: 1. Ensure it performs required monitoring of its subrecipients and their compliance with the award terms and program requirements by following their established policies and procedures to: a. Assess the risk of each subrecipient’s noncompliance and carry out monitoring activities based on those risk assessments such as reviewing financial and performance reports, providing training or technical assistance on program-related matters, and performing on site reviews, selective audits, and/or other monitoring procedures. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. c. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Office actions taken, if appropriate. 2. Allocate sufficient resources, such as staffing, to comply with the award terms and program requirements, and designate an individual to perform necessary subrecipient-monitoring procedures. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2021-101 and was initially reported in fiscal year 2021.
Assistance Listings number and name: 21.019 COVID-19 Coronavirus Relief Fund Award number and year: None Federal agency: U.S. Department of the Treasury Compliance requirement: Subrecipient monitoring Questioned costs: Unknown Condition—The Arizona Governor’s Office of Strategic Planning and Budgeting (Office) awarded $8.5 million to 9 subrecipients during fiscal year 2022, or 6.6 percent of the Office’s $128.6 million total federal expenditures for this federal program, but did not perform all the required monitoring of the subrecipients’ activities or compliance with the award terms and program requirements. Specifically, the Office performed some monitoring during the year, which consisted only of reviewing some interim and the final financial and activity reports; however, those monitoring procedures alone were not sufficient to evaluate whether subrecipients used program monies in accordance with the terms and program requirements. Effect—The Office’s lack of required monitoring increases the risk that the $8.5 million of program monies the Office awarded to subrecipients may not have been spent in accordance with the award terms and program requirements. If monies are spent inconsistent with program requirements, those who were intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Cause—Office management reported that it did not have enough staff to perform its monitoring procedures, and instead, the Office performed only limited monitoring procedures. Specifically, the Office had policies and procedures to follow for performing the monitoring procedures for its subrecipients, including how it should consider and assess risk of each subrecipient and carry out required and various other monitoring procedures based on those risk assessments. However, Office management reported that its staffing levels were not sufficient to perform all the required procedures. Criteria—Federal regulations require the Office to monitor subrecipients, which includes required monitoring procedures for assessing the risk of each subrecipient’s noncompliance and monitoring activities based on those risk assessments; verifying single audits were conducted timely; following up on and ensuring corrective action is taken on audit findings that could potentially affect the program; and issuing a management decision for audit findings pertaining to the federal award. Those federal regulations also provide that monitoring procedures may include reviewing financial and performance reports, providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures (2 CFR §§200.332[b] and [d – e]). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Office should: 1. Ensure it performs required monitoring of its subrecipients and their compliance with the award terms and program requirements by following their established policies and procedures to: a. Assess the risk of each subrecipient’s noncompliance and carry out monitoring activities based on those risk assessments such as reviewing financial and performance reports, providing training or technical assistance on program-related matters, and performing on site reviews, selective audits, and/or other monitoring procedures. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. c. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Office actions taken, if appropriate. 2. Allocate sufficient resources, such as staffing, to comply with the award terms and program requirements, and designate an individual to perform necessary subrecipient-monitoring procedures. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2021-101 and was initially reported in fiscal year 2021.
Assistance Listings number and name: 21.019 COVID-19 Coronavirus Relief Fund Award number and year: None Federal agency: U.S. Department of the Treasury Compliance requirement: Subrecipient monitoring Questioned costs: Unknown Condition—The Arizona Governor’s Office of Strategic Planning and Budgeting (Office) awarded $8.5 million to 9 subrecipients during fiscal year 2022, or 6.6 percent of the Office’s $128.6 million total federal expenditures for this federal program, but did not perform all the required monitoring of the subrecipients’ activities or compliance with the award terms and program requirements. Specifically, the Office performed some monitoring during the year, which consisted only of reviewing some interim and the final financial and activity reports; however, those monitoring procedures alone were not sufficient to evaluate whether subrecipients used program monies in accordance with the terms and program requirements. Effect—The Office’s lack of required monitoring increases the risk that the $8.5 million of program monies the Office awarded to subrecipients may not have been spent in accordance with the award terms and program requirements. If monies are spent inconsistent with program requirements, those who were intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Cause—Office management reported that it did not have enough staff to perform its monitoring procedures, and instead, the Office performed only limited monitoring procedures. Specifically, the Office had policies and procedures to follow for performing the monitoring procedures for its subrecipients, including how it should consider and assess risk of each subrecipient and carry out required and various other monitoring procedures based on those risk assessments. However, Office management reported that its staffing levels were not sufficient to perform all the required procedures. Criteria—Federal regulations require the Office to monitor subrecipients, which includes required monitoring procedures for assessing the risk of each subrecipient’s noncompliance and monitoring activities based on those risk assessments; verifying single audits were conducted timely; following up on and ensuring corrective action is taken on audit findings that could potentially affect the program; and issuing a management decision for audit findings pertaining to the federal award. Those federal regulations also provide that monitoring procedures may include reviewing financial and performance reports, providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures (2 CFR §§200.332[b] and [d – e]). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Office should: 1. Ensure it performs required monitoring of its subrecipients and their compliance with the award terms and program requirements by following their established policies and procedures to: a. Assess the risk of each subrecipient’s noncompliance and carry out monitoring activities based on those risk assessments such as reviewing financial and performance reports, providing training or technical assistance on program-related matters, and performing on site reviews, selective audits, and/or other monitoring procedures. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. c. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Office actions taken, if appropriate. 2. Allocate sufficient resources, such as staffing, to comply with the award terms and program requirements, and designate an individual to perform necessary subrecipient-monitoring procedures. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2021-101 and was initially reported in fiscal year 2021.