The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department of Transportation (Department) in the previous year and has not been remediated as of June 30, 2022 because the original implementation date provided by the Department was in a subsequent fiscal year. This complete finding and recommendation can be found within the original report and the complete recommendation can be found within Section IV: Prior Audit Recommendations of this report. See Schedule of Findings and Questioned Costs for chart/table Finding 2021-068 The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department in the previous year and has not been remediated as of June 30, 2021, because the original implementation date provided by the Department is in a subsequent fiscal year. This complete finding and recommendation can be found in the original report and Section III: Prior Federal Recommendations of this report. See Schedule of Findings and Questioned Costs for chart/table. Finding 2020-075 FORMULA GRANTS FOR RURAL AREAS?INTERNAL CONTROLS AND COMPLIANCE WITH SUBRECIPIENT MONITORING The Department received funding from the Federal Transit Authority (FTA) for the Program during Fiscal Year 2020 and expended approximately $26.8 million under the Program; the expenditures included approximately $16.9 million from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The objective of this Program is to initiate, improve, or continue public transportation services in rural areas. FTA provides financial and technical assistance to local public transit systems, including buses, subways, light rail, commuter rail, trolleys, and ferries. FTA also oversees safety measures and helps develop next-generation technology research. Approximately $26.0 million (97 percent) of the Program funds expended by the Department were passed through to subrecipients in order to carry out a portion of the Program. WHAT WAS THE PURPOSE OF OUR AUDIT WORK AND WHAT WORK WAS PERFORMED? The purpose of the audit work was to determine whether the Department had effective internal controls in place during Fiscal Year 2020 over the Program, and complied with the Program?s subrecipient monitoring activities. As part of our audit work, we reviewed the Department?s internal controls over compliance for the Program?s subrecipient monitoring. In addition, we tested a random sample of five of 45 Program subrecipients for Fiscal Year 2020 to determine whether the subrecipient monitoring procedures the Department performed during the year were compliant with federal requirements. HOW WERE THE RESULTS OF THE AUDIT WORK MEASURED? Our audit work was designed to measure the results of compliance with the following criteria: ? Federal regulations [2 CFR 200.332(b)] require that the Department evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward and may include various factors. Federal regulations [2 CFR 200.332(d)-(f)] also require the Department to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Monitoring must include: ? Reviewing financial and programmatic reports. ? Following up and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity, as required by 2 CFR 200.521. ? Federal regulation [2 CFR 200.303] states that the Department, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The Department?s internal control policies and procedures require the Internal Audit Division to obtain and review single audit certification forms, whereby subrecipients are required to certify whether they are subject to a Single Audit. Internal Audit Division staff are required to review each certification and related Single Audit report, as applicable, and perform follow-up activities related to deficiencies and audit findings. ? Additionally, the Department is required to report the total amount of federal awards expended to the Office of the State Controller (OSC) via the Exhibit K1, Schedule of Federal Assistance. The Exhibit K1 is the document through which state departments report federal expenditure information to the OSC, including separate columns to indicate types of expenditures, for statewide compilation and reporting. WHAT PROBLEMS DID THE AUDIT WORK IDENTIFY? We identified issues related to two of the five (40 percent) Program subrecipients identified by the Department for Fiscal Year 2020 as follows: ? The Department did not take sufficient steps to address one subrecipient?s failure to obtain a 2019 Single Audit. Specifically, the subrecipient received approximately $78,500 in pass-through Program funding from the Department and communicated to the Department in its single audit certification for the year ending December 31, 2019, that it was subject to a Single Audit; however, that audit had not been conducted as of the completion of our Fiscal Year 2020 audit testwork in April 2021. While it appeared that the Department communicated various times with the subrecipient about the missing audit, the Department did not assess possible impacts from the missing audit or take any action to institute alternate monitoring procedures of the subrecipient. ? For the second subrecipient tested, the Department inappropriately considered the entity to be a subrecipient rather than a vendor and incorrectly reported $20,936 in funds paid to the entity as subrecipient expenditures on its Exhibit K1 submitted to the OSC. WHY DID THESE PROBLEMS OCCUR? The Department?s subrecipient policies and procedures are voluminous and performed throughout multiple divisions within the Department. Therefore, the results of monitoring procedures performed are documented in various areas and not contained in one central location. The Department also does not have policies and procedures in place to identify appropriate actions to be taken when issues are identified. In addition, the Department lacks a process for analyzing the types of entities it is contracting with for the Program in order to separately identify the entities as vendors or subrecipients; rather, staff indicated that, during the contracting process, all contract expenditures related to this Program are recorded as subrecipient expenditures, including service-related or vendor contracts. WHY DO THESE PROBLEMS MATTER? Performing timely and appropriate identification and monitoring of subrecipients, including ensuring that they undergo required Single Audits, provides the Department with a method to identify federal grant-related issues and to ensure its compliance with federal subrecipient monitoring requirements. By taking appropriate actions to address the results of its monitoring, the Department can mitigate the risk of providing continuing funding to entities that may not be using funds in accordance with Program requirements. This is particularly important because the Department passes 97 percent of these Program funds to subrecipients. The Department?s failure to comply with federal requirements could result in a loss of funding from the federal government. See Schedule of Findings and Questioned Costs for chart/table RECOMMENDATION 2020-075 The Department of Transportation (Department) should ensure that it improves its internal controls over, and complies with, federal Formula Grants for Rural Areas and Tribal Transit Program requirements for subrecipient monitoring by: A Ensuring that subrecipient monitoring policies and procedures are centralized, condensed, and available to all personnel who are responsible for performing subrecipient monitoring activities. The policies and procedures should clearly list responsibilities for each division within the Department and be inclusive of all monitoring activities performed and contain clear directives for acting on subrecipients? failure to comply with requirements, including providing its single audit report, by assessing possible impacts from the noncompliance and instituting appropriate alternative procedures. B Implementing a process for analyzing its contracted entities during the contracting and awarding process by reviewing the nature and terms of contracts, separately identifying the contracted entities as vendors or subrecipients, and recording the contract expenditures appropriately based on this assessment. RESPONSE DEPARTMENT OF TRANSPORTATION A AGREE. IMPLEMENTATION DATE: JULY 2022. CDOT will work with various divisions to devise a plan that will comply with this finding and the recommendations noted within. This plan shall include identifying a centralized location for all policies and procedures related to subrecipient monitoring. We will look at all policies and procedures to ensure they clearly identify responsibilities and requirements for non-compliance. B AGREE. IMPLEMENTATION DATE: JULY 2022. CDOT will work with various divisions to devise a plan that will comply with this finding and the recommendations noted within. This plan shall include establishing a process by which an analysis of contracted entities will be performed to identify and properly record entities as a vendor or subrecipient.
The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department of Transportation (Department) in the previous year and has not been remediated as of June 30, 2022 because the original implementation date provided by the Department was in a subsequent fiscal year. This complete finding and recommendation can be found within the original report and the complete recommendation can be found within Section IV: Prior Audit Recommendations of this report. See Schedule of Findings and Questioned Costs for chart/table Finding 2021-068 The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department in the previous year and has not been remediated as of June 30, 2021, because the original implementation date provided by the Department is in a subsequent fiscal year. This complete finding and recommendation can be found in the original report and Section III: Prior Federal Recommendations of this report. See Schedule of Findings and Questioned Costs for chart/table. Finding 2020-075 FORMULA GRANTS FOR RURAL AREAS?INTERNAL CONTROLS AND COMPLIANCE WITH SUBRECIPIENT MONITORING The Department received funding from the Federal Transit Authority (FTA) for the Program during Fiscal Year 2020 and expended approximately $26.8 million under the Program; the expenditures included approximately $16.9 million from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The objective of this Program is to initiate, improve, or continue public transportation services in rural areas. FTA provides financial and technical assistance to local public transit systems, including buses, subways, light rail, commuter rail, trolleys, and ferries. FTA also oversees safety measures and helps develop next-generation technology research. Approximately $26.0 million (97 percent) of the Program funds expended by the Department were passed through to subrecipients in order to carry out a portion of the Program. WHAT WAS THE PURPOSE OF OUR AUDIT WORK AND WHAT WORK WAS PERFORMED? The purpose of the audit work was to determine whether the Department had effective internal controls in place during Fiscal Year 2020 over the Program, and complied with the Program?s subrecipient monitoring activities. As part of our audit work, we reviewed the Department?s internal controls over compliance for the Program?s subrecipient monitoring. In addition, we tested a random sample of five of 45 Program subrecipients for Fiscal Year 2020 to determine whether the subrecipient monitoring procedures the Department performed during the year were compliant with federal requirements. HOW WERE THE RESULTS OF THE AUDIT WORK MEASURED? Our audit work was designed to measure the results of compliance with the following criteria: ? Federal regulations [2 CFR 200.332(b)] require that the Department evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward and may include various factors. Federal regulations [2 CFR 200.332(d)-(f)] also require the Department to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Monitoring must include: ? Reviewing financial and programmatic reports. ? Following up and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity, as required by 2 CFR 200.521. ? Federal regulation [2 CFR 200.303] states that the Department, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The Department?s internal control policies and procedures require the Internal Audit Division to obtain and review single audit certification forms, whereby subrecipients are required to certify whether they are subject to a Single Audit. Internal Audit Division staff are required to review each certification and related Single Audit report, as applicable, and perform follow-up activities related to deficiencies and audit findings. ? Additionally, the Department is required to report the total amount of federal awards expended to the Office of the State Controller (OSC) via the Exhibit K1, Schedule of Federal Assistance. The Exhibit K1 is the document through which state departments report federal expenditure information to the OSC, including separate columns to indicate types of expenditures, for statewide compilation and reporting. WHAT PROBLEMS DID THE AUDIT WORK IDENTIFY? We identified issues related to two of the five (40 percent) Program subrecipients identified by the Department for Fiscal Year 2020 as follows: ? The Department did not take sufficient steps to address one subrecipient?s failure to obtain a 2019 Single Audit. Specifically, the subrecipient received approximately $78,500 in pass-through Program funding from the Department and communicated to the Department in its single audit certification for the year ending December 31, 2019, that it was subject to a Single Audit; however, that audit had not been conducted as of the completion of our Fiscal Year 2020 audit testwork in April 2021. While it appeared that the Department communicated various times with the subrecipient about the missing audit, the Department did not assess possible impacts from the missing audit or take any action to institute alternate monitoring procedures of the subrecipient. ? For the second subrecipient tested, the Department inappropriately considered the entity to be a subrecipient rather than a vendor and incorrectly reported $20,936 in funds paid to the entity as subrecipient expenditures on its Exhibit K1 submitted to the OSC. WHY DID THESE PROBLEMS OCCUR? The Department?s subrecipient policies and procedures are voluminous and performed throughout multiple divisions within the Department. Therefore, the results of monitoring procedures performed are documented in various areas and not contained in one central location. The Department also does not have policies and procedures in place to identify appropriate actions to be taken when issues are identified. In addition, the Department lacks a process for analyzing the types of entities it is contracting with for the Program in order to separately identify the entities as vendors or subrecipients; rather, staff indicated that, during the contracting process, all contract expenditures related to this Program are recorded as subrecipient expenditures, including service-related or vendor contracts. WHY DO THESE PROBLEMS MATTER? Performing timely and appropriate identification and monitoring of subrecipients, including ensuring that they undergo required Single Audits, provides the Department with a method to identify federal grant-related issues and to ensure its compliance with federal subrecipient monitoring requirements. By taking appropriate actions to address the results of its monitoring, the Department can mitigate the risk of providing continuing funding to entities that may not be using funds in accordance with Program requirements. This is particularly important because the Department passes 97 percent of these Program funds to subrecipients. The Department?s failure to comply with federal requirements could result in a loss of funding from the federal government. See Schedule of Findings and Questioned Costs for chart/table RECOMMENDATION 2020-075 The Department of Transportation (Department) should ensure that it improves its internal controls over, and complies with, federal Formula Grants for Rural Areas and Tribal Transit Program requirements for subrecipient monitoring by: A Ensuring that subrecipient monitoring policies and procedures are centralized, condensed, and available to all personnel who are responsible for performing subrecipient monitoring activities. The policies and procedures should clearly list responsibilities for each division within the Department and be inclusive of all monitoring activities performed and contain clear directives for acting on subrecipients? failure to comply with requirements, including providing its single audit report, by assessing possible impacts from the noncompliance and instituting appropriate alternative procedures. B Implementing a process for analyzing its contracted entities during the contracting and awarding process by reviewing the nature and terms of contracts, separately identifying the contracted entities as vendors or subrecipients, and recording the contract expenditures appropriately based on this assessment. RESPONSE DEPARTMENT OF TRANSPORTATION A AGREE. IMPLEMENTATION DATE: JULY 2022. CDOT will work with various divisions to devise a plan that will comply with this finding and the recommendations noted within. This plan shall include identifying a centralized location for all policies and procedures related to subrecipient monitoring. We will look at all policies and procedures to ensure they clearly identify responsibilities and requirements for non-compliance. B AGREE. IMPLEMENTATION DATE: JULY 2022. CDOT will work with various divisions to devise a plan that will comply with this finding and the recommendations noted within. This plan shall include establishing a process by which an analysis of contracted entities will be performed to identify and properly record entities as a vendor or subrecipient.
The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department of Transportation (Department) in the previous year and has not been remediated as of June 30, 2022 because the original implementation date provided by the Department was in a subsequent fiscal year. This complete finding and recommendation can be found within the original report and the complete recommendation can be found within Section IV: Prior Audit Recommendations of this report. See Schedule of Findings and Questioned Costs for chart/table Finding 2021-068 The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department in the previous year and has not been remediated as of June 30, 2021, because the original implementation date provided by the Department is in a subsequent fiscal year. This complete finding and recommendation can be found in the original report and Section III: Prior Federal Recommendations of this report. See Schedule of Findings and Questioned Costs for chart/table. Finding 2020-075 FORMULA GRANTS FOR RURAL AREAS?INTERNAL CONTROLS AND COMPLIANCE WITH SUBRECIPIENT MONITORING The Department received funding from the Federal Transit Authority (FTA) for the Program during Fiscal Year 2020 and expended approximately $26.8 million under the Program; the expenditures included approximately $16.9 million from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The objective of this Program is to initiate, improve, or continue public transportation services in rural areas. FTA provides financial and technical assistance to local public transit systems, including buses, subways, light rail, commuter rail, trolleys, and ferries. FTA also oversees safety measures and helps develop next-generation technology research. Approximately $26.0 million (97 percent) of the Program funds expended by the Department were passed through to subrecipients in order to carry out a portion of the Program. WHAT WAS THE PURPOSE OF OUR AUDIT WORK AND WHAT WORK WAS PERFORMED? The purpose of the audit work was to determine whether the Department had effective internal controls in place during Fiscal Year 2020 over the Program, and complied with the Program?s subrecipient monitoring activities. As part of our audit work, we reviewed the Department?s internal controls over compliance for the Program?s subrecipient monitoring. In addition, we tested a random sample of five of 45 Program subrecipients for Fiscal Year 2020 to determine whether the subrecipient monitoring procedures the Department performed during the year were compliant with federal requirements. HOW WERE THE RESULTS OF THE AUDIT WORK MEASURED? Our audit work was designed to measure the results of compliance with the following criteria: ? Federal regulations [2 CFR 200.332(b)] require that the Department evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward and may include various factors. Federal regulations [2 CFR 200.332(d)-(f)] also require the Department to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Monitoring must include: ? Reviewing financial and programmatic reports. ? Following up and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity, as required by 2 CFR 200.521. ? Federal regulation [2 CFR 200.303] states that the Department, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The Department?s internal control policies and procedures require the Internal Audit Division to obtain and review single audit certification forms, whereby subrecipients are required to certify whether they are subject to a Single Audit. Internal Audit Division staff are required to review each certification and related Single Audit report, as applicable, and perform follow-up activities related to deficiencies and audit findings. ? Additionally, the Department is required to report the total amount of federal awards expended to the Office of the State Controller (OSC) via the Exhibit K1, Schedule of Federal Assistance. The Exhibit K1 is the document through which state departments report federal expenditure information to the OSC, including separate columns to indicate types of expenditures, for statewide compilation and reporting. WHAT PROBLEMS DID THE AUDIT WORK IDENTIFY? We identified issues related to two of the five (40 percent) Program subrecipients identified by the Department for Fiscal Year 2020 as follows: ? The Department did not take sufficient steps to address one subrecipient?s failure to obtain a 2019 Single Audit. Specifically, the subrecipient received approximately $78,500 in pass-through Program funding from the Department and communicated to the Department in its single audit certification for the year ending December 31, 2019, that it was subject to a Single Audit; however, that audit had not been conducted as of the completion of our Fiscal Year 2020 audit testwork in April 2021. While it appeared that the Department communicated various times with the subrecipient about the missing audit, the Department did not assess possible impacts from the missing audit or take any action to institute alternate monitoring procedures of the subrecipient. ? For the second subrecipient tested, the Department inappropriately considered the entity to be a subrecipient rather than a vendor and incorrectly reported $20,936 in funds paid to the entity as subrecipient expenditures on its Exhibit K1 submitted to the OSC. WHY DID THESE PROBLEMS OCCUR? The Department?s subrecipient policies and procedures are voluminous and performed throughout multiple divisions within the Department. Therefore, the results of monitoring procedures performed are documented in various areas and not contained in one central location. The Department also does not have policies and procedures in place to identify appropriate actions to be taken when issues are identified. In addition, the Department lacks a process for analyzing the types of entities it is contracting with for the Program in order to separately identify the entities as vendors or subrecipients; rather, staff indicated that, during the contracting process, all contract expenditures related to this Program are recorded as subrecipient expenditures, including service-related or vendor contracts. WHY DO THESE PROBLEMS MATTER? Performing timely and appropriate identification and monitoring of subrecipients, including ensuring that they undergo required Single Audits, provides the Department with a method to identify federal grant-related issues and to ensure its compliance with federal subrecipient monitoring requirements. By taking appropriate actions to address the results of its monitoring, the Department can mitigate the risk of providing continuing funding to entities that may not be using funds in accordance with Program requirements. This is particularly important because the Department passes 97 percent of these Program funds to subrecipients. The Department?s failure to comply with federal requirements could result in a loss of funding from the federal government. See Schedule of Findings and Questioned Costs for chart/table RECOMMENDATION 2020-075 The Department of Transportation (Department) should ensure that it improves its internal controls over, and complies with, federal Formula Grants for Rural Areas and Tribal Transit Program requirements for subrecipient monitoring by: A Ensuring that subrecipient monitoring policies and procedures are centralized, condensed, and available to all personnel who are responsible for performing subrecipient monitoring activities. The policies and procedures should clearly list responsibilities for each division within the Department and be inclusive of all monitoring activities performed and contain clear directives for acting on subrecipients? failure to comply with requirements, including providing its single audit report, by assessing possible impacts from the noncompliance and instituting appropriate alternative procedures. B Implementing a process for analyzing its contracted entities during the contracting and awarding process by reviewing the nature and terms of contracts, separately identifying the contracted entities as vendors or subrecipients, and recording the contract expenditures appropriately based on this assessment. RESPONSE DEPARTMENT OF TRANSPORTATION A AGREE. IMPLEMENTATION DATE: JULY 2022. CDOT will work with various divisions to devise a plan that will comply with this finding and the recommendations noted within. This plan shall include identifying a centralized location for all policies and procedures related to subrecipient monitoring. We will look at all policies and procedures to ensure they clearly identify responsibilities and requirements for non-compliance. B AGREE. IMPLEMENTATION DATE: JULY 2022. CDOT will work with various divisions to devise a plan that will comply with this finding and the recommendations noted within. This plan shall include establishing a process by which an analysis of contracted entities will be performed to identify and properly record entities as a vendor or subrecipient.
Subrecipient Monitoring General Information: Grant Title: Airport Improvement Program ALN #: 20.106 Federal Agency: Department of Transportation Condition: We noted during our audit that the Logan County Commission failed to properly monitor subrecipients. Specifically, there was no assurance that the funds sent for reimbursement were expensed by the subrecipients. Criteria: Appendix XI of the 2 CFR Part 200 July 2021 Compliance Supplement states, in part: “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))…” Questioned Costs: $993,739 Context: $993,739 of disbursements were made to local governments without the subrecipients activities being monitored to ensure expenditures of the subaward were used for authorized purposes and in accordance with the grant guidelines. Cause: The Logan County Commission did not have procedures in place to ensure this subrecipient monitoring requirement was performed. Effect: Failure to properly monitor subrecipients increases the likelihood of errors or irregularities not being prevented or detected in a timely manner. Additionally, the risk of unallowable activities and unallowable costs is significantly increased. Management failed to comply with all applicable, material compliance requirements of the grant agreement. Recommendation: The Logan County Commission is directed to review this regulation and comply with the provisions set forth therein. Clients’ response See Corrective Action Plan
Finding 2022-015 – Noncompliance with Subrecipient Monitoring Over Federal Grant – Coronavirus State and Local Fiscal Recovery Funds PASS-THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of Treasury ASSISTANE LISTING: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $404,258 Condition: During our audit it was noted the County had three (3) subrecipients of the Coronavirus State and Local Fiscal Recovery Funds, in which the county does not have a subrecipient monitoring policy, and the County did not obtain subrecipient agreements comprising the following information: • Subrecipient name. • Subrecipient Authorized Representative and program contact information. • Subrecipient Employee Identification Number (EIN) and DUNS number. • Federal Award Identification Number (FAIN). • Name of Federal Awarding Agency. • Contact information for the official at the Federal Awarding Agency. • Catalog of Assistance Listing (AL) number and name. • Federal award date. • Total amount of the federal award and Indirect Cost Rate. • Federal award project description. • Start and end date of the agreement. • Amount of federal funds budgeted for the agreement and Indirect Cost Rate allowed. • A statement that all activities must be in accordance with federal statutes, regulations, and terms and conditions of the federal award. The sub recipient should receive a copy of the award documents. • A detailed description of any additional requirements you want the subrecipient to be responsible for such as performance and/or financial reports, attending meetings and/or trainings etc. • A statement about the monitoring activities, such as where/when they will take place; also include a statement indicating the subrecipient will collaborate on monitoring activities including providing requested financial documents. • A statement indicating if any of the items in the agreement change during the period of performance, the agreement will be amended. • Provide close out terms and conditions. In addition, it was noted the County did not verify the subrecipients were not suspended or debarred. Further, it was noted the county expended the funds to the subrecipients before receiving the proper documentation and the county paid subrecipients $83,546 more than documentation received. Comanche County Fairgrounds Trust Authority $ 12,881 Comanche County Facilities Authority 70,665 Total undocumented: $ 83,546 Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements. Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and implement internal controls to ensure compliance with these requirements. Management Response: Chairman of the Board of County Commissioners: The Board of County Commissioners will take measures to ensure future compliance with all requirements of federal grants. Criteria: 2 CFR 200, §200.332 Requirements for Pass-Through Entities states in part: All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part. (6) Appropriate terms and conditions concerning closeout of the subaward.
Subrecipient Monitoring Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: The Uniform Guidance in 2 CFR Section 200.332 (b) states that pass-through entities must “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.” Condition and context: The Organization did not have a subrecipient risk assessment process in place that corresponded with a risk-based monitoring plan. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: No. Recommendation: We recommend that the Organization implement a formal risk assessment process to monitor its subrecipients. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.
Subrecipient Monitoring Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: The Uniform Guidance in 2 CFR Section 200.332 (b) states that pass-through entities must “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.” Condition and context: The Organization did not have a subrecipient risk assessment process in place that corresponded with a risk-based monitoring plan. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: No. Recommendation: We recommend that the Organization implement a formal risk assessment process to monitor its subrecipients. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.
Subrecipient Monitoring Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: The Uniform Guidance in 2 CFR Section 200.332 (b) states that pass-through entities must “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.” Condition and context: The Organization did not have a subrecipient risk assessment process in place that corresponded with a risk-based monitoring plan. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: No. Recommendation: We recommend that the Organization implement a formal risk assessment process to monitor its subrecipients. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.
Subrecipient Monitoring Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: The Uniform Guidance in 2 CFR Section 200.332 (b) states that pass-through entities must “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.” Condition and context: The Organization did not have a subrecipient risk assessment process in place that corresponded with a risk-based monitoring plan. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: No. Recommendation: We recommend that the Organization implement a formal risk assessment process to monitor its subrecipients. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.
Subrecipient Monitoring Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: The Uniform Guidance in 2 CFR Section 200.332 (b) states that pass-through entities must “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.” Condition and context: The Organization did not have a subrecipient risk assessment process in place that corresponded with a risk-based monitoring plan. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: No. Recommendation: We recommend that the Organization implement a formal risk assessment process to monitor its subrecipients. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.
2022-006 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: 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. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2022. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $3,927,799 for the year ended June 30, 2022, which included $1,390,746 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2022-006 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: 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. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2022. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $3,927,799 for the year ended June 30, 2022, which included $1,390,746 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2022-006 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: 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. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2022. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $3,927,799 for the year ended June 30, 2022, which included $1,390,746 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2022-006 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: 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. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2022. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $3,927,799 for the year ended June 30, 2022, which included $1,390,746 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2022-006 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: 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. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2022. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $3,927,799 for the year ended June 30, 2022, which included $1,390,746 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency did not comply with the Uniform Guidance requirement to evaluate each subrecipient’s risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: There was significant key employee turnover during and subsequent to the fiscal year-end. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency did not comply with the Uniform Guidance requirement to evaluate each subrecipient’s risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: There was significant key employee turnover during and subsequent to the fiscal year-end. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
Criteria: Uniform Guidance requires pass-through entities to oversee the activities of service providers with respect to provision of services, reporting, voluntary contributions, and coordination of services under 2 CFR 200.332. Condition: The Agency did not comply with the Uniform Guidance requirement to evaluate each subrecipient’s risk of non-compliance and to monitor activities to ensure the federal award is used for authorized purposes. Questioned Costs: $0 Cause: There was significant key employee turnover during and subsequent to the fiscal year-end. Effect: The Agency was not in compliance with Uniform Guidance 2 CFR 200.332. Recommendation: We recommend the Agency monitors its subrecipients regularly. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and in March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.
Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. However, it was noted that the Organization implemented a process during the year to properly document whether a company is a contractor or a subrecipient. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are in compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should have instituted a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2021-006
Subrecipient Monitoring (Significant Deficiency in Internal Controls over Compliance, Other Noncompliance) Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Foster Care – Title IV-E Assistance Listing Number: 93.658 Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Post Federal Award Requirements and Cost Principles for Federal Award (Uniform Guidance) requires the grantee to monitor the activities of subrecipients to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and terms and conditions of the subaward. Additionally, when the County passes money through to subrecipients, the County must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information at the time of the subaward. Condition: During our testing, we selected five subrecipients from a population of 24 subrecipients for testing and the County was unable to provide us with documentation of their risk assessment and the County did not obtain the single audit reports of the subrecipients as part of their monitoring procedures for all five. Management did obtain the California Department of Social Services management decision letters for two out of the five subrecipients tested. Questioned Costs: None Cause: The County does not have the proper training regarding compliance Uniform Guidance for subrecipients. Effect: The County was not in compliance with federal award subrecipient monitoring requirements. Continued noncompliance could result in sanctions by the federal awarding agency, including withholding future funding. Repeat Finding: Yes, prior year 2021-002 Recommendation: The County should establish policies and procedures to ensure risk assessment is documented. The County should also obtain the single audit reports for their subrecipients and issue management decision letters as part of their monitoring. Views of responsible officials – The County (Human Services Agency) categorized five providers, all FFAs as subrecipients that received Title IV-E funding. These providers are clearly identified in the FY 2021/22 Schedule of Expenditures of Federal Awards (SEFA) as mandated by 2 CFR 200.332. The County (Human Services Agency) concurs that there is no documented process for completing and documenting a risk assessment, obtaining copies of the single audit reports for each FFA, group homes, and STRTPs subrecipient, and issuing management decision letters as part of a documented monitoring policy and procedure. The County (Human Services Agency) relies on CDSS to perform certain licensing and oversight functions as the single state agency for Title IV-E funds. The County (Human Services Agency) is responsible for and does review these audits and their findings, however we concur that we did not sufficiently document our process or our follow-ups to ensure compliance.
Reference Number: 2022-011 Category of Finding: Subrecipient Monitoring Type of Finding: Material Weakness and Material Instance of Noncompliance State Administering Department: California Department of Public Health (Public Health) Assistance Listing Number: 93.323 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Number and Year: NU50CK000539; 2021 Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards: (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving cross-cutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section §200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (f) 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. (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. Condition Public Health did not establish a formal risk assessment process over its subrecipients of federal awards to determine the frequency and extent of subrecipient monitoring to be performed. While Public Health received reimbursement invoices from subrecipients, there did not appear to be other financial or programmatic monitoring to verify subrecipents compliance with applicable requirements. In addition, Public Health did not obtain Single Audit reports from those subrecipients as required. Identification as a Repeat Finding Finding 2021-014 was reported in the immediate prior year. Cause Procedures to perform the required subrecipient monitoring were not established nor performed by Public Health. Effect By not properly evaluating the risk of noncompliance, Public Health may inadvertently award grant funds to subrecipients who lack the necessary mechanisms or understanding to adhere to federal statutes. This increases the likelihood of noncompliance arising during the performance of the grant-funded activities. Furthermore, failure to perform monitoring procedures or obtain Single Audit reports increases the risk for not properly identifying subrecipient program control weaknesses, noncompliance, and performing sufficient follow-up on any subrecipient corrective action. Questioned Costs No questioned costs were identified. Context Disbursements to subrecipients for the ELC program totaled $301,107,041, or 31.0% of total reported program expenditures. Recommendation Public Health should establish and document formal procedures for conducting risk assessments of its subrecipients, including criteria for evaluating organizational capacity, financial stability, compliance history, and programmatic capabilities. Public Health should also develop and implement specific subrecipient monitoring procedures and establish a process for obtaining Single Audit reports from its subrecipients. Furthermore, a monitoring mechanism should be implemented to track compliance with the single audit mandate among subrecipients, including regular follow-ups and documentation of communication efforts. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Criteria: In accordance with 2 CFR 200.332 (b) pass-thru entities must 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 and (d) pass-thru entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring must include: reviewing financial and performance reports, following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award, issuing a management decision for applicable audit findings pertaining to the Federal award provided to the subrecipient and resolving audit findings specifically related to the subaward. Condition/context: We selected the one subrecipient that the University passed federal funding to during the year ended June 30, 2022. We requested support that the University performed a risk assessment and was monitoring the subrecipient, noting the University did not perform a risk assessment and was not monitoring the subrecipient in accordance with 2 CFR 200.332 (b) or (d).Our sample was not, and was not intended to be, statistically valid.Questioned costs: None.Cause/Effect: The University does not have a clear understanding of the compliance requirements for subrecipient monitoring. The lack of subrecipient monitoring increases the risk that the subrecipient is not using the subaward for authorized purposes, in compliance with Federal statutes, regulations, or the terms and conditions of the subaward.Repeat finding: YesRecommendation: We recommend the University implement internal controls to assess the risk of the subrecipient and properly monitor any subrecipients of the University, such as reviewing single audits, financial and performance reports, or other necessary documentation of the subrecipient entity to help ensure the subrecipient is in compliance.Views of responsible officials and planned corrective actions: In agreement with the auditor?s recommendation of internal controls to properly monitor any subrecipients of the University, such as reviewing financial and performance reports of the subreceipient entity including any single audit reports. Heritage University has finalized the new ?Grant Management Policy & Procedures? manual. The grant management manual section on subrecipient is explicit about the University?s policies and procedures to ensure documentation is maintained.
Criteria: In accordance with 2 CFR 200.332 (b) pass-thru entities must 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 and (d) pass-thru entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring must include: reviewing financial and performance reports, following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award, issuing a management decision for applicable audit findings pertaining to the Federal award provided to the subrecipient and resolving audit findings specifically related to the subaward. Condition/context: We selected the one subrecipient that the University passed federal funding to during the year ended June 30, 2022. We requested support that the University performed a risk assessment and was monitoring the subrecipient, noting the University did not perform a risk assessment and was not monitoring the subrecipient in accordance with 2 CFR 200.332 (b) or (d).Our sample was not, and was not intended to be, statistically valid.Questioned costs: None.Cause/Effect: The University does not have a clear understanding of the compliance requirements for subrecipient monitoring. The lack of subrecipient monitoring increases the risk that the subrecipient is not using the subaward for authorized purposes, in compliance with Federal statutes, regulations, or the terms and conditions of the subaward.Repeat finding: YesRecommendation: We recommend the University implement internal controls to assess the risk of the subrecipient and properly monitor any subrecipients of the University, such as reviewing single audits, financial and performance reports, or other necessary documentation of the subrecipient entity to help ensure the subrecipient is in compliance.Views of responsible officials and planned corrective actions: In agreement with the auditor?s recommendation of internal controls to properly monitor any subrecipients of the University, such as reviewing financial and performance reports of the subreceipient entity including any single audit reports. Heritage University has finalized the new ?Grant Management Policy & Procedures? manual. The grant management manual section on subrecipient is explicit about the University?s policies and procedures to ensure documentation is maintained.
Federal Awarding Agency: USTreasuryImpact: Significant Deficiency, NoncomplianceAL Number and Title: 21.019 Coronavirus Relief Fund (CRF) ? COVID-19Federal Award Number: SLT0031, SLT0073Applicable Compliance Requirement: Subrecipient MonitoringCondition:DCCED staff did not issue timely management decisions for three of the four CRF single audit findings requiring follow-up during FY 22.Context:Federal regulations require pass-through entities to issue a management decision for audit findings relating to federal awards provided to subrecipients. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the adequacy of the subrecipient?s proposed corrective actions to address the findings.Of the three untimely management decisions, two were issued past the six month requirement and one has not been issued as of the end of FY 22. For the two management decisions issued past the six month requirement, one was two months and the other was 11 months past the requirement as of the end of FY 22.Cause:Due to staff oversight, DCCED?s single audit procedures did not require management decisions to be issued within the six month requirement. Further, the procedures did not require a supervisory review.Criteria:Title 2 CFR 200.332(d)(3) states that pass-through entities? monitoring of subrecipients must include issuing a management decision for audit findings that relate to federal awards provided to subrecipients.Title 2 CFR 200.521(d) states a management decision must be issued within six months of acceptance of the audit report by the federal audit clearinghouse.Effect:The lack of timely management decisions may result in subrecipients not taking appropriate corrective action. Noncompliance with federal regulations may result in the federal awarding agency imposing additional conditions or taking corrective action, including additional reporting requirements.Questioned Costs:NoneRecommendation:DCCED?s DAS director should revise single audit procedures to ensure management decisions are issued within six months. Further, procedures should include adequate supervisory review.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USTreasuryImpact: Significant Deficiency, NoncomplianceAL Number and Title: 21.027 SLFRFFederal Award Number: SLFRP0006, SLFRP2633, SLFRP4544Applicable Compliance Requirement: Subrecipient MonitoringCondition:For one of two subrecipients, DCCED staff did not identify all federally required information on the FY 22 SLFRF subaward or conduct a risk assessment.Context:DCCED entered into a contract with the Juneau Economic Development Council (JEDC) to assist in administering the Grants to Tourism and Other Businesses for the Negative Economic Impacts portion of the SLFRF program. Under the contract, JEDC determined eligibility, sent payments to eligible grantees, and provided disbursement reports to DCCED for monitoring. This activity created a subrecipient relationship.The audit reviewed the form used to contract with JEDC and determined that none of the federally required information was included on the form. Additionally, the audit found that a risk assessment was not conducted for JEDC.Cause:Due to staff turnover in the program manager position, JEDC was not initially identified as a subrecipient since a contract was used instead of a grant award document.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 200.332 requires the State to perform annual risk assessments and ensure every subaward includes the required information at the time of the subaward.Effect:Absent risk assessments, subrecipients may not be sufficiently monitored, increasing the risk of inappropriate use of SLFRF monies and noncompliance with federal laws. Not providing the required information in the subaward document increases the risk of subrecipient noncompliance with the terms and conditions of the federal award and could result in the State repaying SLFRF monies to the federal government.Questioned Costs:NoneRecommendation:DCCED?s DAS director should strengthen training of program manager staff to ensure compliance with all subrecipient monitoring requirements applicable to federally funded subawards.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-024Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425D ESSER ? COVID-1984.425U ARP ESSER Fund ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: Subrecipient MonitoringCondition:DEED staff did not document risk assessments for non-Local Educational Agency (LEA) subrecipients.Context:Prior to the ESSER program, DEED rarely made subawards to entities that were not LEAs. Under the ESSER program DEED must subgrant 90 percent of funding to LEAs. The remaining 10 percent of funding can be allocated by DEED with greater discretion and includes subawards to non-LEAs. DEED staff did not conduct ESSER-specific risk assessments for LEAs. Instead, DEED staff relied on risk assessments performed for a different federal program, which was limited to LEAs.Cause:Risk assessments were not performed for non-LEA subrecipients because DEED utilized a risk assessment created for a different federal program, which only made grants to LEAs. According to DEED staff, formalized monitoring tools for non-LEA subrecipients will be implemented beginning in FY 23.Criteria:Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 200.332(b) requires the State to evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate subrecipient monitoring.Effect:Not performing risk assessments and not implementing formalized monitoring tools for all subrecipients could potentially result in inappropriate use of federal awards.Questioned Costs:NoneRecommendation:DEED?s DAS director should update risk assessment and monitoring procedures to include non-LEAs to ensure all ESSER subrecipients receive an appropriate level of monitoring.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-024Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425D ESSER ? COVID-1984.425U ARP ESSER Fund ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: Subrecipient MonitoringCondition:DEED staff did not document risk assessments for non-Local Educational Agency (LEA) subrecipients.Context:Prior to the ESSER program, DEED rarely made subawards to entities that were not LEAs. Under the ESSER program DEED must subgrant 90 percent of funding to LEAs. The remaining 10 percent of funding can be allocated by DEED with greater discretion and includes subawards to non-LEAs. DEED staff did not conduct ESSER-specific risk assessments for LEAs. Instead, DEED staff relied on risk assessments performed for a different federal program, which was limited to LEAs.Cause:Risk assessments were not performed for non-LEA subrecipients because DEED utilized a risk assessment created for a different federal program, which only made grants to LEAs. According to DEED staff, formalized monitoring tools for non-LEA subrecipients will be implemented beginning in FY 23.Criteria:Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 200.332(b) requires the State to evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate subrecipient monitoring.Effect:Not performing risk assessments and not implementing formalized monitoring tools for all subrecipients could potentially result in inappropriate use of federal awards.Questioned Costs:NoneRecommendation:DEED?s DAS director should update risk assessment and monitoring procedures to include non-LEAs to ensure all ESSER subrecipients receive an appropriate level of monitoring.Views of Responsible Officials:Management agrees with the finding.
FINDING 2022-210The Department did not review subrecipient application information for Coronavirus State and Local Fiscal Recovery Funds at a sufficient level to identify missing information from required documentation.Type of Finding: Significant Deficiency, NoncomplianceAssistance Listing Title: Coronavirus State and Local Fiscal Recovery FundsAssistance Listing Number: 21.027Federal Award Number: 20-1982-0-1-806Program Year: March 3, 2021 ? December 31, 2024Federal Agency: Department of TreasuryCompliance Requirement: Subrecipient MonitoringQuestioned Costs: NoneCriteria: The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out throughout the operation. Verifications, approvals, and authorizations are all control activities that support this objective.The Uniform Guidance included in 2 CFR 200.332 describes the pass-through entities? responsibility for administering necessary requirements on subrecipients so that the federal award is used in accordance with federal regulations.In addition, 2 CFR 25.300 states that (a) a recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier and (b) a recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier, as described in paragraph (a) of this section.Condition: The Department used Coronavirus State and Local Fiscal Recovery funds to provide financial support to hospitals during the COVID-19 pandemic. The Department was responsible for distributing these funds and created a process for hospitals to apply and receive funding. During testing, we identified 2 applications out of 8 reviewed, or 25 percent, that did not have unique entity identifier numbers attached to the documentation provided for testing, as required by 2 CFR 25.300.Cause: The Department had review procedures in place, but the reviews of subrecipient application documentation failed to detect the absence of unique entity identifier numbers. This number is required as part of the subgranting process.Effect: The Department is exposed to increased risk of improper payments and noncompliance with federal requirements when applications do not meet all requirements for receiving funding.Recommendation: We recommend that the Department design and implement effective internal control procedures to ensure adequate subrecipient applications are completed accurately and in compliance with federal requirements.Management?s View: The Department agrees with this finding.Corrective Action: Corrective action is complete. Internal controls are in place as the Department procurement policy; staff are trained to check SAM.gov on all subrecipients. Additionally, internal forms needed to execute a subrecipient agreement require documentation of the Unique Identifier. If the Unique Identifier field is left blank, the Department Contracts and Procurement Unit will not process the agreement request. This finding was a result of a new process and untrained staff pulled into the rapid dispersal of COVID funds.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-210The Department did not review subrecipient application information for Coronavirus State and Local Fiscal Recovery Funds at a sufficient level to identify missing information from required documentation.Type of Finding: Significant Deficiency, NoncomplianceAssistance Listing Title: Coronavirus State and Local Fiscal Recovery FundsAssistance Listing Number: 21.027Federal Award Number: 20-1982-0-1-806Program Year: March 3, 2021 ? December 31, 2024Federal Agency: Department of TreasuryCompliance Requirement: Subrecipient MonitoringQuestioned Costs: NoneCriteria: The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out throughout the operation. Verifications, approvals, and authorizations are all control activities that support this objective.The Uniform Guidance included in 2 CFR 200.332 describes the pass-through entities? responsibility for administering necessary requirements on subrecipients so that the federal award is used in accordance with federal regulations.In addition, 2 CFR 25.300 states that (a) a recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier and (b) a recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier, as described in paragraph (a) of this section.Condition: The Department used Coronavirus State and Local Fiscal Recovery funds to provide financial support to hospitals during the COVID-19 pandemic. The Department was responsible for distributing these funds and created a process for hospitals to apply and receive funding. During testing, we identified 2 applications out of 8 reviewed, or 25 percent, that did not have unique entity identifier numbers attached to the documentation provided for testing, as required by 2 CFR 25.300.Cause: The Department had review procedures in place, but the reviews of subrecipient application documentation failed to detect the absence of unique entity identifier numbers. This number is required as part of the subgranting process.Effect: The Department is exposed to increased risk of improper payments and noncompliance with federal requirements when applications do not meet all requirements for receiving funding.Recommendation: We recommend that the Department design and implement effective internal control procedures to ensure adequate subrecipient applications are completed accurately and in compliance with federal requirements.Management?s View: The Department agrees with this finding.Corrective Action: Corrective action is complete. Internal controls are in place as the Department procurement policy; staff are trained to check SAM.gov on all subrecipients. Additionally, internal forms needed to execute a subrecipient agreement require documentation of the Unique Identifier. If the Unique Identifier field is left blank, the Department Contracts and Procurement Unit will not process the agreement request. This finding was a result of a new process and untrained staff pulled into the rapid dispersal of COVID funds.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-210The Department did not review subrecipient application information for Coronavirus State and Local Fiscal Recovery Funds at a sufficient level to identify missing information from required documentation.Type of Finding: Significant Deficiency, NoncomplianceAssistance Listing Title: Coronavirus State and Local Fiscal Recovery FundsAssistance Listing Number: 21.027Federal Award Number: 20-1982-0-1-806Program Year: March 3, 2021 ? December 31, 2024Federal Agency: Department of TreasuryCompliance Requirement: Subrecipient MonitoringQuestioned Costs: NoneCriteria: The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out throughout the operation. Verifications, approvals, and authorizations are all control activities that support this objective.The Uniform Guidance included in 2 CFR 200.332 describes the pass-through entities? responsibility for administering necessary requirements on subrecipients so that the federal award is used in accordance with federal regulations.In addition, 2 CFR 25.300 states that (a) a recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier and (b) a recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier, as described in paragraph (a) of this section.Condition: The Department used Coronavirus State and Local Fiscal Recovery funds to provide financial support to hospitals during the COVID-19 pandemic. The Department was responsible for distributing these funds and created a process for hospitals to apply and receive funding. During testing, we identified 2 applications out of 8 reviewed, or 25 percent, that did not have unique entity identifier numbers attached to the documentation provided for testing, as required by 2 CFR 25.300.Cause: The Department had review procedures in place, but the reviews of subrecipient application documentation failed to detect the absence of unique entity identifier numbers. This number is required as part of the subgranting process.Effect: The Department is exposed to increased risk of improper payments and noncompliance with federal requirements when applications do not meet all requirements for receiving funding.Recommendation: We recommend that the Department design and implement effective internal control procedures to ensure adequate subrecipient applications are completed accurately and in compliance with federal requirements.Management?s View: The Department agrees with this finding.Corrective Action: Corrective action is complete. Internal controls are in place as the Department procurement policy; staff are trained to check SAM.gov on all subrecipients. Additionally, internal forms needed to execute a subrecipient agreement require documentation of the Unique Identifier. If the Unique Identifier field is left blank, the Department Contracts and Procurement Unit will not process the agreement request. This finding was a result of a new process and untrained staff pulled into the rapid dispersal of COVID funds.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-206The Department did not complete required subrecipient monitoring of the Elementary and Secondary School Emergency Relief (ESSER) Fund of the Education Stabilization Fund.Type of Finding: Material Noncompliance, Material WeaknessAssistance Listing Title: Elementary and Secondary School Emergency Relief Fund; Emergency Assistance for Non-Public Schools; ARPA ESSER III; ARPA ESSER - Homeless Children and YouthAssistance Listing Number: 84.425D; 84.425R; 84.425U; 84.425WFederal Award Number: S425D210043; S425D200043; S425R210024; S425U210043; S425W210013Program Year: January 5, 2021 ? September 30, 2023; May 18, 2020 ? September 30, 2022; February 11, 2021 ? September 30, 2023; March 24, 2021 ? September 30, 2024; April 23, 2021 ? September 30, 2024Federal Agency: Department of EducationCompliance Requirement: Subrecipient MonitoringQuestioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, superseding the Office of Management and Budget (OMB) Circular A-102, Grants and Cooperative Agreements with State and Local Governments, describes the pass-through entity?s responsibility for administering necessary requirements on subrecipients so that the federal award is used in accordance with federal regulations.Specifically, 2 CFR 200.332(d) and 2 CFR 25.200 identify the requirements for the Department as the pass- through entity in providing subawards. This includes communication of certain information, such as the subrecipient?s unique entity identifier and required registration in the System for Award Management (SAM). In addition, the Department must evaluate each subrecipient?s risk of noncompliance with federal statutes and the terms and conditions of the subaward when determining the extent of subrecipient monitoring to be completed to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that the subaward performance goals are achieved. 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, monitoring must include a review of financial and performance reports required by the pass-through entity, follow up on any deficiencies identified in the subrecipient that are detected through audits, on-site reviews and other means, and issuing a management decision for audit findings, as required by 2 CFR 200.521.Finally, 2 CFR 200.303 requires the Department to establish and maintain effective internal control over the federal award that provides reasonable assurance that the Department is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: The Department initially received ESSER funding in fiscal year 2021 and integrated ESSER monitoring with the general subrecipient monitoring used for other federal programs. The Department?s 2020- 2021 Monitoring Tool included only one indicator related to the ESSER program and did not adequately address all subrecipient monitoring requirements. However, in fiscal year 2021, the Department determined that the existing monitoring procedures were not robust enough for the additional requirements associated with ESSER subrecipient monitoring and discontinued those procedures without implementing any alternative procedures during fiscal year 2022.This was a finding included in the Single Audit Report for the year ended June 30, 2021, and the Department provided a corrective action plan to monitor subrecipients. However, the Department did not implement the plan until after the audit period, in fiscal year 2023.Cause: The Department realized the current procedures were not sufficient to meet the monitoring requirements of ESSER and indicated a monitoring process specific to the ESSER program compliance requirements was being developed; however, it was not developed in a timely manner to comply with federal requirements.Effect: The Department is not in compliance with subrecipient monitoring requirements. Without adequate monitoring of subrecipients, the Department is exposed to an increased risk of making improper payments for unallowable or unsupported costs.Recommendation: We recommend that the Department implement procedures to ensure compliance with all requirements as a pass-through entity. We also recommend that the Department design and implement effective control procedures to ensure subrecipient monitoring activities are complete and appropriate.Management?s View: The Department agrees with this finding.Corrective Action: It was not until the end of the 2022 legislative session that spending authority was given to the State Department of Education to use ARP ESSER administrative funds to hire additional staff to meet the robust requirements identified by the U.S. Department of Education. Up to that point, only one full-time person was handling all of the needs associated with ESSER funds. Since then, two positions have been hired. The ESSER Data and Reporting Coordinator began in April 2022, and the ESSER Monitoring Coordinator began in June 2022. While developing the monitoring procedures began in July 2022, it was after the audit timeframe. The Department now has in place all ESSER monitoring policies and procedures and will complete year one monitoring before May 5, 2023.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-206The Department did not complete required subrecipient monitoring of the Elementary and Secondary School Emergency Relief (ESSER) Fund of the Education Stabilization Fund.Type of Finding: Material Noncompliance, Material WeaknessAssistance Listing Title: Elementary and Secondary School Emergency Relief Fund; Emergency Assistance for Non-Public Schools; ARPA ESSER III; ARPA ESSER - Homeless Children and YouthAssistance Listing Number: 84.425D; 84.425R; 84.425U; 84.425WFederal Award Number: S425D210043; S425D200043; S425R210024; S425U210043; S425W210013Program Year: January 5, 2021 ? September 30, 2023; May 18, 2020 ? September 30, 2022; February 11, 2021 ? September 30, 2023; March 24, 2021 ? September 30, 2024; April 23, 2021 ? September 30, 2024Federal Agency: Department of EducationCompliance Requirement: Subrecipient MonitoringQuestioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, superseding the Office of Management and Budget (OMB) Circular A-102, Grants and Cooperative Agreements with State and Local Governments, describes the pass-through entity?s responsibility for administering necessary requirements on subrecipients so that the federal award is used in accordance with federal regulations.Specifically, 2 CFR 200.332(d) and 2 CFR 25.200 identify the requirements for the Department as the pass- through entity in providing subawards. This includes communication of certain information, such as the subrecipient?s unique entity identifier and required registration in the System for Award Management (SAM). In addition, the Department must evaluate each subrecipient?s risk of noncompliance with federal statutes and the terms and conditions of the subaward when determining the extent of subrecipient monitoring to be completed to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that the subaward performance goals are achieved. 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, monitoring must include a review of financial and performance reports required by the pass-through entity, follow up on any deficiencies identified in the subrecipient that are detected through audits, on-site reviews and other means, and issuing a management decision for audit findings, as required by 2 CFR 200.521.Finally, 2 CFR 200.303 requires the Department to establish and maintain effective internal control over the federal award that provides reasonable assurance that the Department is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: The Department initially received ESSER funding in fiscal year 2021 and integrated ESSER monitoring with the general subrecipient monitoring used for other federal programs. The Department?s 2020- 2021 Monitoring Tool included only one indicator related to the ESSER program and did not adequately address all subrecipient monitoring requirements. However, in fiscal year 2021, the Department determined that the existing monitoring procedures were not robust enough for the additional requirements associated with ESSER subrecipient monitoring and discontinued those procedures without implementing any alternative procedures during fiscal year 2022.This was a finding included in the Single Audit Report for the year ended June 30, 2021, and the Department provided a corrective action plan to monitor subrecipients. However, the Department did not implement the plan until after the audit period, in fiscal year 2023.Cause: The Department realized the current procedures were not sufficient to meet the monitoring requirements of ESSER and indicated a monitoring process specific to the ESSER program compliance requirements was being developed; however, it was not developed in a timely manner to comply with federal requirements.Effect: The Department is not in compliance with subrecipient monitoring requirements. Without adequate monitoring of subrecipients, the Department is exposed to an increased risk of making improper payments for unallowable or unsupported costs.Recommendation: We recommend that the Department implement procedures to ensure compliance with all requirements as a pass-through entity. We also recommend that the Department design and implement effective control procedures to ensure subrecipient monitoring activities are complete and appropriate.Management?s View: The Department agrees with this finding.Corrective Action: It was not until the end of the 2022 legislative session that spending authority was given to the State Department of Education to use ARP ESSER administrative funds to hire additional staff to meet the robust requirements identified by the U.S. Department of Education. Up to that point, only one full-time person was handling all of the needs associated with ESSER funds. Since then, two positions have been hired. The ESSER Data and Reporting Coordinator began in April 2022, and the ESSER Monitoring Coordinator began in June 2022. While developing the monitoring procedures began in July 2022, it was after the audit timeframe. The Department now has in place all ESSER monitoring policies and procedures and will complete year one monitoring before May 5, 2023.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-206The Department did not complete required subrecipient monitoring of the Elementary and Secondary School Emergency Relief (ESSER) Fund of the Education Stabilization Fund.Type of Finding: Material Noncompliance, Material WeaknessAssistance Listing Title: Elementary and Secondary School Emergency Relief Fund; Emergency Assistance for Non-Public Schools; ARPA ESSER III; ARPA ESSER - Homeless Children and YouthAssistance Listing Number: 84.425D; 84.425R; 84.425U; 84.425WFederal Award Number: S425D210043; S425D200043; S425R210024; S425U210043; S425W210013Program Year: January 5, 2021 ? September 30, 2023; May 18, 2020 ? September 30, 2022; February 11, 2021 ? September 30, 2023; March 24, 2021 ? September 30, 2024; April 23, 2021 ? September 30, 2024Federal Agency: Department of EducationCompliance Requirement: Subrecipient MonitoringQuestioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, superseding the Office of Management and Budget (OMB) Circular A-102, Grants and Cooperative Agreements with State and Local Governments, describes the pass-through entity?s responsibility for administering necessary requirements on subrecipients so that the federal award is used in accordance with federal regulations.Specifically, 2 CFR 200.332(d) and 2 CFR 25.200 identify the requirements for the Department as the pass- through entity in providing subawards. This includes communication of certain information, such as the subrecipient?s unique entity identifier and required registration in the System for Award Management (SAM). In addition, the Department must evaluate each subrecipient?s risk of noncompliance with federal statutes and the terms and conditions of the subaward when determining the extent of subrecipient monitoring to be completed to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that the subaward performance goals are achieved. 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, monitoring must include a review of financial and performance reports required by the pass-through entity, follow up on any deficiencies identified in the subrecipient that are detected through audits, on-site reviews and other means, and issuing a management decision for audit findings, as required by 2 CFR 200.521.Finally, 2 CFR 200.303 requires the Department to establish and maintain effective internal control over the federal award that provides reasonable assurance that the Department is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: The Department initially received ESSER funding in fiscal year 2021 and integrated ESSER monitoring with the general subrecipient monitoring used for other federal programs. The Department?s 2020- 2021 Monitoring Tool included only one indicator related to the ESSER program and did not adequately address all subrecipient monitoring requirements. However, in fiscal year 2021, the Department determined that the existing monitoring procedures were not robust enough for the additional requirements associated with ESSER subrecipient monitoring and discontinued those procedures without implementing any alternative procedures during fiscal year 2022.This was a finding included in the Single Audit Report for the year ended June 30, 2021, and the Department provided a corrective action plan to monitor subrecipients. However, the Department did not implement the plan until after the audit period, in fiscal year 2023.Cause: The Department realized the current procedures were not sufficient to meet the monitoring requirements of ESSER and indicated a monitoring process specific to the ESSER program compliance requirements was being developed; however, it was not developed in a timely manner to comply with federal requirements.Effect: The Department is not in compliance with subrecipient monitoring requirements. Without adequate monitoring of subrecipients, the Department is exposed to an increased risk of making improper payments for unallowable or unsupported costs.Recommendation: We recommend that the Department implement procedures to ensure compliance with all requirements as a pass-through entity. We also recommend that the Department design and implement effective control procedures to ensure subrecipient monitoring activities are complete and appropriate.Management?s View: The Department agrees with this finding.Corrective Action: It was not until the end of the 2022 legislative session that spending authority was given to the State Department of Education to use ARP ESSER administrative funds to hire additional staff to meet the robust requirements identified by the U.S. Department of Education. Up to that point, only one full-time person was handling all of the needs associated with ESSER funds. Since then, two positions have been hired. The ESSER Data and Reporting Coordinator began in April 2022, and the ESSER Monitoring Coordinator began in June 2022. While developing the monitoring procedures began in July 2022, it was after the audit timeframe. The Department now has in place all ESSER monitoring policies and procedures and will complete year one monitoring before May 5, 2023.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-206The Department did not complete required subrecipient monitoring of the Elementary and Secondary School Emergency Relief (ESSER) Fund of the Education Stabilization Fund.Type of Finding: Material Noncompliance, Material WeaknessAssistance Listing Title: Elementary and Secondary School Emergency Relief Fund; Emergency Assistance for Non-Public Schools; ARPA ESSER III; ARPA ESSER - Homeless Children and YouthAssistance Listing Number: 84.425D; 84.425R; 84.425U; 84.425WFederal Award Number: S425D210043; S425D200043; S425R210024; S425U210043; S425W210013Program Year: January 5, 2021 ? September 30, 2023; May 18, 2020 ? September 30, 2022; February 11, 2021 ? September 30, 2023; March 24, 2021 ? September 30, 2024; April 23, 2021 ? September 30, 2024Federal Agency: Department of EducationCompliance Requirement: Subrecipient MonitoringQuestioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, superseding the Office of Management and Budget (OMB) Circular A-102, Grants and Cooperative Agreements with State and Local Governments, describes the pass-through entity?s responsibility for administering necessary requirements on subrecipients so that the federal award is used in accordance with federal regulations.Specifically, 2 CFR 200.332(d) and 2 CFR 25.200 identify the requirements for the Department as the pass- through entity in providing subawards. This includes communication of certain information, such as the subrecipient?s unique entity identifier and required registration in the System for Award Management (SAM). In addition, the Department must evaluate each subrecipient?s risk of noncompliance with federal statutes and the terms and conditions of the subaward when determining the extent of subrecipient monitoring to be completed to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that the subaward performance goals are achieved. 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, monitoring must include a review of financial and performance reports required by the pass-through entity, follow up on any deficiencies identified in the subrecipient that are detected through audits, on-site reviews and other means, and issuing a management decision for audit findings, as required by 2 CFR 200.521.Finally, 2 CFR 200.303 requires the Department to establish and maintain effective internal control over the federal award that provides reasonable assurance that the Department is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: The Department initially received ESSER funding in fiscal year 2021 and integrated ESSER monitoring with the general subrecipient monitoring used for other federal programs. The Department?s 2020- 2021 Monitoring Tool included only one indicator related to the ESSER program and did not adequately address all subrecipient monitoring requirements. However, in fiscal year 2021, the Department determined that the existing monitoring procedures were not robust enough for the additional requirements associated with ESSER subrecipient monitoring and discontinued those procedures without implementing any alternative procedures during fiscal year 2022.This was a finding included in the Single Audit Report for the year ended June 30, 2021, and the Department provided a corrective action plan to monitor subrecipients. However, the Department did not implement the plan until after the audit period, in fiscal year 2023.Cause: The Department realized the current procedures were not sufficient to meet the monitoring requirements of ESSER and indicated a monitoring process specific to the ESSER program compliance requirements was being developed; however, it was not developed in a timely manner to comply with federal requirements.Effect: The Department is not in compliance with subrecipient monitoring requirements. Without adequate monitoring of subrecipients, the Department is exposed to an increased risk of making improper payments for unallowable or unsupported costs.Recommendation: We recommend that the Department implement procedures to ensure compliance with all requirements as a pass-through entity. We also recommend that the Department design and implement effective control procedures to ensure subrecipient monitoring activities are complete and appropriate.Management?s View: The Department agrees with this finding.Corrective Action: It was not until the end of the 2022 legislative session that spending authority was given to the State Department of Education to use ARP ESSER administrative funds to hire additional staff to meet the robust requirements identified by the U.S. Department of Education. Up to that point, only one full-time person was handling all of the needs associated with ESSER funds. Since then, two positions have been hired. The ESSER Data and Reporting Coordinator began in April 2022, and the ESSER Monitoring Coordinator began in June 2022. While developing the monitoring procedures began in July 2022, it was after the audit timeframe. The Department now has in place all ESSER monitoring policies and procedures and will complete year one monitoring before May 5, 2023.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, 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 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities 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 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities 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 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities 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 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, 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 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, 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 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-019 - Control Weakness Relating to Foster Care Subrecipient MonitoringAward Year: 2022Award Number: 2201LAFOSTCompliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS) did not adequately review subrecipient Foster Care Title IV-E (Foster Care) invoices submitted by the Department of Public Safety and Corrections ? Youth Services ? Office of Juvenile Justice (OJJ) for reimbursement of administrative expenditures to ensure billings were accurately calculated.During our procedures performed at OJJ, which was in addition to our testing conducted through sampling at DCFS, it came to our attention that on the administrative invoice for the quarter ending December 2021, there were errors due to OJJ using incorrect expenditure data, resulting in billing errors that were not detected by DCFS.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of subrecipients as necessary to ensure that the subaward complies with the terms and conditions of the subaward.Per DCFS?s contract with OJJ related to the Foster Care program, DCFS agrees to receive, review, and certify expenditure reports for Foster Care expenditures.Cause:These conditions occurred because of a weakness in controls in monitoring Foster Care administrative invoices.Effect:Failure to properly review invoices resulted in an over reimbursement and could result in disallowed costs by the federal grantor. Based on the methodology used, there was $128,236 in overpayments considered questioned costs.Recommendation:DCFS should strengthen controls over review to ensure administrative invoices submitted by OJJ are calculated accurately.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-5).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
Go Utah Did Not Implement Internal Controls for Subrecipient Monitoring Requirements(Go Utah)Federal Agency: Department of the TreasuryAssistance Listing Number and Title: 21.027 Coronavirus State and Local Fiscal Recovery FundsFederal Award Number: N/AQuestioned Costs: N/APass-through Entity: N/APrior Year Single Audit Report Finding Number: N/AThe Governor's Office of Economic Opportunity (Go Utah) did not establish internal controls to ensure compliance with Coronavirus State and Local Fiscal Recovery Funds (SLFRF) subrecipient monitoring requirements. Go Utah also did not properly communicate key federal grant information or evaluate and monitor its subrecipient for compliance purposes as required by 2 CRF 200.332.The Department of Treasury?s Final Rule requires recipients of funds to ?establish rigorous oversight and internal control processes to monitor compliance with any applicable requirements, including compliance by subrecipients.? 2 CFR 200.303 also requires the establishment of effective internal control for federal programs.Go Utah was unaware that subrecipient monitoring requirements were applicable to its program. Failure to establish internal controls, adequately communicate key federal program information to subrecipients and perform risk evaluation, and monitoring procedures may result in the subrecipient?s noncompliance with federal funds and potential misuse of federal funds.Recommendation:We recommend Go Utah:1. Gain an understanding of subrecipient requirements and establish internal controls to ensure compliance with these requirements; and2. Communicate all required federal award information to sub-recipients.Go Utah?s Response:We agree. While internal controls were insufficient, they were not completely absent. For example: (1) we implemented the American Rescue Plan Act of 2021 Appropriation Tracking and Documentation Form, and (2) all sub-recipients signed contracts that included internal controls such as requirements for status reports, performance measures, and compliance with all applicable federal and state laws, rules, and regulations.
CRF Subrecipient Single Audit Report Reviews Not Occurring(Governor?s Office of Planning and Budget)Federal Agency: Department of the TreasuryAssistance Listing Number and Title: 21.019 Coronavirus Relief FundFederal Award Number: N/AQuestioned Costs: N/APass-through Entity: N/APrior Year Single Audit Report Finding Number: N/AGOPB did not design or implement controls to ensure its subrecipients? single audit reports were monitored according to federal requirements. It also did not review any subrecipients? single audit reports to assess whether its subrecipients receiving CRF funds spent the funds appropriately. 2 CFR 200.332(d) requires a review of subrecipient single audit reports when they become available. It also requires GOPB to follow up with the subrecipient to ensure timely and appropriate action has taken place for any deficiencies identified.GOPB did not design or implement controls because of its unfamiliarity with federal grant requirements and employee turnover. This could result in GOPB not identifying potential issues at the subrecipient level and take appropriate actions.Recommendation:We recommend GOPB establish policies and procedures to ensure monitoring of single audit reports occur in accordance with 2 CFR 200.332(d).GOPB?s Response:GOPB agrees with this finding. Prior to being awarded any CRF funds, GOPB required all subrecipients to agree to the terms and conditions on which the funds were granted. Part of the agreement stated that these federal funds were subject to the Single Audit Act and 2 CFR 200.332(d) requirements, which requires that subrecipients receiving more than $750,000 in federal funds per year complete and submit their single audit report in compliance with federal regulations. All state government agencies are covered under the statewide single audit completed by the Office of the State Auditor, however cities, counties, towns, water districts and other local entities are not covered by the statewide single audit and need to complete their own, if they meet the spending threshold.
CRF Subrecipient Single Audit Report Reviews Not Occurring(Governor?s Office of Planning and Budget)Federal Agency: Department of the TreasuryAssistance Listing Number and Title: 21.019 Coronavirus Relief FundFederal Award Number: N/AQuestioned Costs: N/APass-through Entity: N/APrior Year Single Audit Report Finding Number: N/AGOPB did not design or implement controls to ensure its subrecipients? single audit reports were monitored according to federal requirements. It also did not review any subrecipients? single audit reports to assess whether its subrecipients receiving CRF funds spent the funds appropriately. 2 CFR 200.332(d) requires a review of subrecipient single audit reports when they become available. It also requires GOPB to follow up with the subrecipient to ensure timely and appropriate action has taken place for any deficiencies identified.GOPB did not design or implement controls because of its unfamiliarity with federal grant requirements and employee turnover. This could result in GOPB not identifying potential issues at the subrecipient level and take appropriate actions.Recommendation:We recommend GOPB establish policies and procedures to ensure monitoring of single audit reports occur in accordance with 2 CFR 200.332(d).GOPB?s Response:GOPB agrees with this finding. Prior to being awarded any CRF funds, GOPB required all subrecipients to agree to the terms and conditions on which the funds were granted. Part of the agreement stated that these federal funds were subject to the Single Audit Act and 2 CFR 200.332(d) requirements, which requires that subrecipients receiving more than $750,000 in federal funds per year complete and submit their single audit report in compliance with federal regulations. All state government agencies are covered under the statewide single audit completed by the Office of the State Auditor, however cities, counties, towns, water districts and other local entities are not covered by the statewide single audit and need to complete their own, if they meet the spending threshold.