Finding 2021-008 Subrecipient Agreements - Subrecipient Monitoring – Material Noncompliance and Material Weakness in Internal Control over Compliance Agency Department of the Treasury ALN 21.019 Program COVID-19 - Coronavirus Relief Fund Award Year FY 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CRF-024 Criteria 2 CFR 200.332 requires pass-through entities to ensure that subrecipients comply with the terms and conditions of 2 CFR 200.501 related to audit requirements. This includes ensuring that every subaward is (1) clearly identified to the subrecipient as a subaward; (2) includes the necessary information at the time of the subaward for subrecipient reporting on federal awards (2 CFR 200.332) and (3) includes requirement to follow 2 CFR 200.501 if expenditure thresholds are met. This also includes verifying that every subrecipient is audited as required by 2 CFR 200.501 if the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold. Condition During our testing of subrecipient monitoring, we noted the subrecipient agreements did not include the required federal award identification or applicability of audit requirements. No action was taken to ensure the subrecipients were audited in accordance with 2 CFR 200.501 if applicable. Cause The issuance of subrecipient agreements for these grants related to new funding streams in response to the COVID-19 pandemic. Significant amounts of funding were provided in a short period of time, and systems to distribute these monies were newly created and implemented. The standard award agreements were not reviewed in advance to ensure adherence to federal requirements. Staff were not fully trained on the informational requirements and monitoring responsibilities related to audit requirements. Effect or potential effect Subrecipients may be unaware and not in compliance with the requirements of 2 CFR Part 200. Questioned costs Not applicable. Context We tested the sole subaward agreement for the program and noted the agreement did not contain the necessary language under 2 CFR 200.332 to inform subrecipients of the applicability of 2 CFR 200, Subpart F. Identification as a repeat finding Not a repeat finding. Recommendation Management should establish policies to ensure subawards contain required federal award information. In addition, procedures should be established to monitor subrecipient compliance with audit requirements of 2 CFR 200.501. Views of responsible officials Management concurs with the finding. Management will revise policies and procedures related to subrecipient monitoring and will ensure that policies are established to ensure subawards contain the required federal award information.
Finding 2021-009 Monitoring Activities - Subrecipient Monitoring – Material Noncompliance and Material Weakness in Internal Control over Compliance Agency Department of the Treasury ALN 21.019 Program COVID-19 - Coronavirus Relief Fund Award Year FY 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CRF-024 Criteria 2 CFR 200.332 requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR 200.332 also requires pass-through entities to verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition The City did not have controls in place to monitor subrecipient activities and ensure the subrecipient was audited in accordance with 2 CFR 200.501 if applicable. Cause Staff were not fully trained on the informational requirements and monitoring responsibilities related to audit requirements. Effect or potential effect The City was not in compliance with subrecipient requirements outlined in 2 CFR 200.332. Furthermore, not communicating proper compliance requirements and other information may increase the likelihood of noncompliance on the part of the subrecipient and non-fulfillment of program goals and objectives. Questioned costs Not applicable. Context We were not able to verify controls over subrecipient monitoring. The audit of the subrecipient was completed by other auditors including an audit in accordance with the Uniform Guidance requirements on December 3, 2021. The City obtained the audited reports in April 2023. Identification as a repeat finding Not a repeat finding. Recommendation Management should establish policies and procedures to monitor subrecipient compliance with audit requirements of 2 CFR 200.501. Views of responsible officials Management concurs with the finding. Management will revise policies and procedures related to subrecipient monitoring and will ensure that policies are established to ensure subawards contain the required federal a ward information.
Finding 2021-013 - Lack of Internal Controls and Noncompliance with Subrecipient Monitoring - Emergency Rental Assistance Program FEDERAL AGENCY: U.S. Department of the Treasury ASSISTANCE LISTING: 21.023 FEDERAL PROGRAM NAME: Emergency Rental Assistance Program FEDERAL AW ARD NUMBER: ERA0174 FEDERAL AW ARD YEAR: 2021 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $124,300 Condition: While documenting controls over Subrecipient Monitoring and administrative expenditures for the Emergency Rental Assistance Program (ERA) program, we noted the following: • The County was unable to provide supporting documents for the administrative costs of the consultant for this grant totaling $24,300. • The County was unable to provide supporting documentation of the subrecipient's administrative expenditures totaling $100,000. Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County is complying with federal laws and regulations, and grant agreements. Also, adequate Subrecipient Monitoring policies and procedures have not been established by the County prior to entering into agreements with subrecipients. Effect of Condition: This condition resulted in noncompliance with grant requirements. Also, the subrecipient may not be in compliance with the award terms and there is an increased risk of mismanagement and fraud by the subgrantees. Recommendation: OSAI recommends the County design and implement internal controls to ensure that it administers current and future ERA grants in accordance with applicable federal laws and grant requirements, including ensuring that grant subrecipients are properly informed of federal requirements related to allowable costs. Subrecipients are reimbursed for administrative costs based on supporting documentation for actual costs incurred rather than making advance payments for a set percentage of advanced program funds. Management Response: Chairman of the Board of County Commissioners: The County has met with the Oklahoma State Auditor & Inspector's office in reference to Finding 2021-013 Lack oflnternal Controls and Noncompliance with Subrecipient Monitoring - Emergency Rental Assistance Program. We agree with the auditor's recommendation and will take the following corrective actions: 1. Design and implement internal controls to ensure compliance with all applicable federal laws, regulations, and grant requirements for current and future ERA grants. This will include: a) Amend written policies and procedures to better include Subrecipient Monitoring, including requirements for sub-recipients to provide supporting documents for actual administrative expenditures incurred rather than receiving advance payments. b) Providing annual training to staff on the new sub-recipient monitoring policies and procedures. c) Implementing a documentation and review process to ensure sub-recipients are properly informed of federal requirements related to allowable costs and that expenditures are supported before payment. 2. Strengthen sub-recipient agreements to include clear requirements around supporting documents for administrative costs. 3. Increase monitoring of sub-recipients through periodic desk audits and site visits to review expenditures and supporting documentation. The County takes these findings seriously and will implement robust internal controls and Subrecipient Monitoring procedures to ensure full compliance with federal grant requirements and prevent any future noncompliance or questioned costs. We appreciate the auditor identifying these issues so they can be properly addressed and corrected. Please let us know if any additional information or documentation is needed regarding the corrective actions. Criteria: GAO Standards - Section 2 - Establishing an Effective Internal Control System - OV2.23 states in part: Objectives of an Entity- Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. 2 CFR § 200.332 (d) Requirements for pass-through entities states in part: All pass-through entities must: ( d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (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 passthrough 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. The Consolidated Appropriations Act§ 501 Emergency Rental Assistance (c) Use of Funds - (5) Administrative Costs states in part, (A) IN GENERAL. -Not more than 10 percent of the amount paid to an eligible grantee under this section may be used for administrative costs attributable to providing financial assistance and housing stability services under paragraphs (2) and (3), respectively, including for data collection and reporting requirements related to such funds. (B) NO OTHER ADMINISTRATIVE COSTS. -Amounts paid under this section shall not be used for any administrative costs other than to the extent allowed under subparagraph (A). The US Department of Treasury Emergency Rental Assistance (ERA) FAQ #29 What are the applicable limitations on administrative expenses, states in part, "Under ERAl, not more than 10 percent of the amount paid to a grantee may be used for administrative costs attributable to providing financial assistance and housing stability services to eligible households. Under ERA2, not more than 15 percent of the amount paid to a grantee may be used for administrative costs attributable to providing financial assistance, housing stability services, and other affordable rental housing and eviction prevention activities."
Reference Number: 2021-007 Category of Finding: Subrecipient Monitoring Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Business, Consumer Services, and Housing Agency California Department of Education California Department of Social Services Federal Program Title: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Award Number and Year: N/A; 2020 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: (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 date elements change, include the changes in subsequent subaward modification. When some of the information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient’s unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; Condition For 2 of 60 subawards tested, the State did not communicate required subaward information to its subrecipients of the Coronavirus Relief Fund (CRF) program at the time of the subaward, or when the State became aware of changes in subaward information, including identification that the subaward funds represented federal funding. Also, for 4 of 60 direct costs tested, the transactions were subsequently determined to be subawards, for which the required subaward information was not properly communicated to the subrecipients. The 4 direct costs transactions were from the Business, Consumer Services and Housing Agency; 1 of the subawards was from the California Department of Education; and 1 of the subawards was from the California Department of Social Services. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause The State initially appropriated state General Fund dollars to various departments through an amendment to the 2019 State Budget Act for its coronavirus response. The initial communication to certain subrecipients identified the funding source as State General Fund monies. Subsequently, upon the State allocating its CRF award funds to be administered by various state departments, certain activities and related costs originally funded by the State General Fund, were replaced with CRF funding. Given the change in the source of funding, updated communication was not provided to the subrecipients informing them of the required federal award information. Additionally, the State did not make timely determinations identifying certain activities as subawards versus contracts for goods and/or services. Effect By not properly informing subrecipients that the funding provided represented federal financial assistance associated with the CRF program, there is an increased risk that subrecipients could potentially expend funds on ineligible activities, as well as subrecipients not accounting and reporting expenditures in accordance with the Federal statutes, regulations, and the terms and conditions of the federal award. Questioned Costs No questioned costs were identified. Context Disbursements to subrecipients for the CRF totaled $7,480,270,598, or 79.7% of total reported CRF program expenditures. Subrecipient expenditures for the 6 subawards with exceptions, the related State administering department, and the total department subrecipient expenditures for which the required subaward information was not communicated, is as follows: "See the Notes to the SEFA for the chart/table" The sample was not a statistically valid sample. Recommendation The state administering departments identified above should review all subawards provided which were funded using CRF program funds, provide the subrecipients with subaward information required by 2 CFR 200.332(a), and determine whether the subrecipients properly reported CRF subawards and related expenditures in their respective schedule of expenditures of federal awards pursuant to 2 CFR 200.502.If federal subawards were not reported, the state administering departments should perform appropriate follow-up monitoring procedures. 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.
Reference Number: 2021-014 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: (b) 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: (c) 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 crosscutting 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 This was not a repeat finding from the immediate prior year. Cause: Public Health failed to identify and report its federal expenditures related to its subrecipient agreement with its bona fide agent. Consequently, required subrecipient monitoring procedures were not designed nor implemented 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 implementation 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 $367,405,431, or 76.5% 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
FINDING 2021-003 - Subrecipient Monitoring (Repeated from Prior Year Findings 20-004, 19-005, 18-004, and 17-003) Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D Project No: 20-4631-RN and 21-4631-RN Federal Assistance Listing Number: 84.323A Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require the Regional Office to ensure any subrecipient monitoring using federal funds be consistent with the standards set forth in the Uniform Guidance at 2 CFR 200.332. B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following: “The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: The ROE does not have effective internal controls over subrecipient monitoring. Furthermore, ROE #47 was not properly monitoring subrecipients in accordance with the Uniform Guidance standards. During audit testing procedures it was determined that ROE #47: Number of Subrecipients a. Did not evaluate the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. 2 of 2 b. Did not conduct subrecipient monitoring procedures. 2 of 2 c. Did not determine whether the subrecipient met the 2 CFR 200 Subpart F Audit requirements criteria for a single audit. 2 of 2 Questioned Costs: None Context: The Regional Office of Education #47 expended a total of $1,919,044 of federal awards in fiscal year 2021, of which $879,747 in IDEA –Improvement Grant –Part D were passed-through to subrecipients. Effect: The Regional Office of Education #47 is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200.332 as it relates to subrecipient monitoring requirements. Additionally, the effect of noncompliance can result in questioned costs. Cause: The Regional Office of Education #47 experienced staff turnover and did not formally document policies and procedures that provide controls and structures to ensure all of its subrecipient monitoring accountabilities are conducted and complied with. Recommendation: We recommend that the Regional Office of Education #47 establish and maintain effective internal control over federal awards to ensure subrecipients are properly monitored as required by 2 CFR 200.332. This includes: a. Evaluating the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward; b. Conducting subrecipient monitoring procedures; and c. Determining whether the subrecipient met the requirement criteria of 2 CFR 200 Subpart F Audit requirements for a single audit. Management’s Response: Management agrees with this finding.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
Finding 2021-008 Subrecipient Agreements - Subrecipient Monitoring – Material Noncompliance and Material Weakness in Internal Control over Compliance Agency Department of the Treasury ALN 21.019 Program COVID-19 - Coronavirus Relief Fund Award Year FY 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CRF-024 Criteria 2 CFR 200.332 requires pass-through entities to ensure that subrecipients comply with the terms and conditions of 2 CFR 200.501 related to audit requirements. This includes ensuring that every subaward is (1) clearly identified to the subrecipient as a subaward; (2) includes the necessary information at the time of the subaward for subrecipient reporting on federal awards (2 CFR 200.332) and (3) includes requirement to follow 2 CFR 200.501 if expenditure thresholds are met. This also includes verifying that every subrecipient is audited as required by 2 CFR 200.501 if the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold. Condition During our testing of subrecipient monitoring, we noted the subrecipient agreements did not include the required federal award identification or applicability of audit requirements. No action was taken to ensure the subrecipients were audited in accordance with 2 CFR 200.501 if applicable. Cause The issuance of subrecipient agreements for these grants related to new funding streams in response to the COVID-19 pandemic. Significant amounts of funding were provided in a short period of time, and systems to distribute these monies were newly created and implemented. The standard award agreements were not reviewed in advance to ensure adherence to federal requirements. Staff were not fully trained on the informational requirements and monitoring responsibilities related to audit requirements. Effect or potential effect Subrecipients may be unaware and not in compliance with the requirements of 2 CFR Part 200. Questioned costs Not applicable. Context We tested the sole subaward agreement for the program and noted the agreement did not contain the necessary language under 2 CFR 200.332 to inform subrecipients of the applicability of 2 CFR 200, Subpart F. Identification as a repeat finding Not a repeat finding. Recommendation Management should establish policies to ensure subawards contain required federal award information. In addition, procedures should be established to monitor subrecipient compliance with audit requirements of 2 CFR 200.501. Views of responsible officials Management concurs with the finding. Management will revise policies and procedures related to subrecipient monitoring and will ensure that policies are established to ensure subawards contain the required federal award information.
Finding 2021-009 Monitoring Activities - Subrecipient Monitoring – Material Noncompliance and Material Weakness in Internal Control over Compliance Agency Department of the Treasury ALN 21.019 Program COVID-19 - Coronavirus Relief Fund Award Year FY 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CRF-024 Criteria 2 CFR 200.332 requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR 200.332 also requires pass-through entities to verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition The City did not have controls in place to monitor subrecipient activities and ensure the subrecipient was audited in accordance with 2 CFR 200.501 if applicable. Cause Staff were not fully trained on the informational requirements and monitoring responsibilities related to audit requirements. Effect or potential effect The City was not in compliance with subrecipient requirements outlined in 2 CFR 200.332. Furthermore, not communicating proper compliance requirements and other information may increase the likelihood of noncompliance on the part of the subrecipient and non-fulfillment of program goals and objectives. Questioned costs Not applicable. Context We were not able to verify controls over subrecipient monitoring. The audit of the subrecipient was completed by other auditors including an audit in accordance with the Uniform Guidance requirements on December 3, 2021. The City obtained the audited reports in April 2023. Identification as a repeat finding Not a repeat finding. Recommendation Management should establish policies and procedures to monitor subrecipient compliance with audit requirements of 2 CFR 200.501. Views of responsible officials Management concurs with the finding. Management will revise policies and procedures related to subrecipient monitoring and will ensure that policies are established to ensure subawards contain the required federal a ward information.
Finding 2021-013 - Lack of Internal Controls and Noncompliance with Subrecipient Monitoring - Emergency Rental Assistance Program FEDERAL AGENCY: U.S. Department of the Treasury ASSISTANCE LISTING: 21.023 FEDERAL PROGRAM NAME: Emergency Rental Assistance Program FEDERAL AW ARD NUMBER: ERA0174 FEDERAL AW ARD YEAR: 2021 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $124,300 Condition: While documenting controls over Subrecipient Monitoring and administrative expenditures for the Emergency Rental Assistance Program (ERA) program, we noted the following: • The County was unable to provide supporting documents for the administrative costs of the consultant for this grant totaling $24,300. • The County was unable to provide supporting documentation of the subrecipient's administrative expenditures totaling $100,000. Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County is complying with federal laws and regulations, and grant agreements. Also, adequate Subrecipient Monitoring policies and procedures have not been established by the County prior to entering into agreements with subrecipients. Effect of Condition: This condition resulted in noncompliance with grant requirements. Also, the subrecipient may not be in compliance with the award terms and there is an increased risk of mismanagement and fraud by the subgrantees. Recommendation: OSAI recommends the County design and implement internal controls to ensure that it administers current and future ERA grants in accordance with applicable federal laws and grant requirements, including ensuring that grant subrecipients are properly informed of federal requirements related to allowable costs. Subrecipients are reimbursed for administrative costs based on supporting documentation for actual costs incurred rather than making advance payments for a set percentage of advanced program funds. Management Response: Chairman of the Board of County Commissioners: The County has met with the Oklahoma State Auditor & Inspector's office in reference to Finding 2021-013 Lack oflnternal Controls and Noncompliance with Subrecipient Monitoring - Emergency Rental Assistance Program. We agree with the auditor's recommendation and will take the following corrective actions: 1. Design and implement internal controls to ensure compliance with all applicable federal laws, regulations, and grant requirements for current and future ERA grants. This will include: a) Amend written policies and procedures to better include Subrecipient Monitoring, including requirements for sub-recipients to provide supporting documents for actual administrative expenditures incurred rather than receiving advance payments. b) Providing annual training to staff on the new sub-recipient monitoring policies and procedures. c) Implementing a documentation and review process to ensure sub-recipients are properly informed of federal requirements related to allowable costs and that expenditures are supported before payment. 2. Strengthen sub-recipient agreements to include clear requirements around supporting documents for administrative costs. 3. Increase monitoring of sub-recipients through periodic desk audits and site visits to review expenditures and supporting documentation. The County takes these findings seriously and will implement robust internal controls and Subrecipient Monitoring procedures to ensure full compliance with federal grant requirements and prevent any future noncompliance or questioned costs. We appreciate the auditor identifying these issues so they can be properly addressed and corrected. Please let us know if any additional information or documentation is needed regarding the corrective actions. Criteria: GAO Standards - Section 2 - Establishing an Effective Internal Control System - OV2.23 states in part: Objectives of an Entity- Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. 2 CFR § 200.332 (d) Requirements for pass-through entities states in part: All pass-through entities must: ( d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (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 passthrough 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. The Consolidated Appropriations Act§ 501 Emergency Rental Assistance (c) Use of Funds - (5) Administrative Costs states in part, (A) IN GENERAL. -Not more than 10 percent of the amount paid to an eligible grantee under this section may be used for administrative costs attributable to providing financial assistance and housing stability services under paragraphs (2) and (3), respectively, including for data collection and reporting requirements related to such funds. (B) NO OTHER ADMINISTRATIVE COSTS. -Amounts paid under this section shall not be used for any administrative costs other than to the extent allowed under subparagraph (A). The US Department of Treasury Emergency Rental Assistance (ERA) FAQ #29 What are the applicable limitations on administrative expenses, states in part, "Under ERAl, not more than 10 percent of the amount paid to a grantee may be used for administrative costs attributable to providing financial assistance and housing stability services to eligible households. Under ERA2, not more than 15 percent of the amount paid to a grantee may be used for administrative costs attributable to providing financial assistance, housing stability services, and other affordable rental housing and eviction prevention activities."
Reference Number: 2021-007 Category of Finding: Subrecipient Monitoring Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Business, Consumer Services, and Housing Agency California Department of Education California Department of Social Services Federal Program Title: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Award Number and Year: N/A; 2020 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: (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 date elements change, include the changes in subsequent subaward modification. When some of the information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient’s unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; Condition For 2 of 60 subawards tested, the State did not communicate required subaward information to its subrecipients of the Coronavirus Relief Fund (CRF) program at the time of the subaward, or when the State became aware of changes in subaward information, including identification that the subaward funds represented federal funding. Also, for 4 of 60 direct costs tested, the transactions were subsequently determined to be subawards, for which the required subaward information was not properly communicated to the subrecipients. The 4 direct costs transactions were from the Business, Consumer Services and Housing Agency; 1 of the subawards was from the California Department of Education; and 1 of the subawards was from the California Department of Social Services. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause The State initially appropriated state General Fund dollars to various departments through an amendment to the 2019 State Budget Act for its coronavirus response. The initial communication to certain subrecipients identified the funding source as State General Fund monies. Subsequently, upon the State allocating its CRF award funds to be administered by various state departments, certain activities and related costs originally funded by the State General Fund, were replaced with CRF funding. Given the change in the source of funding, updated communication was not provided to the subrecipients informing them of the required federal award information. Additionally, the State did not make timely determinations identifying certain activities as subawards versus contracts for goods and/or services. Effect By not properly informing subrecipients that the funding provided represented federal financial assistance associated with the CRF program, there is an increased risk that subrecipients could potentially expend funds on ineligible activities, as well as subrecipients not accounting and reporting expenditures in accordance with the Federal statutes, regulations, and the terms and conditions of the federal award. Questioned Costs No questioned costs were identified. Context Disbursements to subrecipients for the CRF totaled $7,480,270,598, or 79.7% of total reported CRF program expenditures. Subrecipient expenditures for the 6 subawards with exceptions, the related State administering department, and the total department subrecipient expenditures for which the required subaward information was not communicated, is as follows: "See the Notes to the SEFA for the chart/table" The sample was not a statistically valid sample. Recommendation The state administering departments identified above should review all subawards provided which were funded using CRF program funds, provide the subrecipients with subaward information required by 2 CFR 200.332(a), and determine whether the subrecipients properly reported CRF subawards and related expenditures in their respective schedule of expenditures of federal awards pursuant to 2 CFR 200.502.If federal subawards were not reported, the state administering departments should perform appropriate follow-up monitoring procedures. 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.
Reference Number: 2021-014 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: (b) 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: (c) 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 crosscutting 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 This was not a repeat finding from the immediate prior year. Cause: Public Health failed to identify and report its federal expenditures related to its subrecipient agreement with its bona fide agent. Consequently, required subrecipient monitoring procedures were not designed nor implemented 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 implementation 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 $367,405,431, or 76.5% 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
FINDING 2021-003 - Subrecipient Monitoring (Repeated from Prior Year Findings 20-004, 19-005, 18-004, and 17-003) Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D Project No: 20-4631-RN and 21-4631-RN Federal Assistance Listing Number: 84.323A Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require the Regional Office to ensure any subrecipient monitoring using federal funds be consistent with the standards set forth in the Uniform Guidance at 2 CFR 200.332. B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following: “The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: The ROE does not have effective internal controls over subrecipient monitoring. Furthermore, ROE #47 was not properly monitoring subrecipients in accordance with the Uniform Guidance standards. During audit testing procedures it was determined that ROE #47: Number of Subrecipients a. Did not evaluate the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. 2 of 2 b. Did not conduct subrecipient monitoring procedures. 2 of 2 c. Did not determine whether the subrecipient met the 2 CFR 200 Subpart F Audit requirements criteria for a single audit. 2 of 2 Questioned Costs: None Context: The Regional Office of Education #47 expended a total of $1,919,044 of federal awards in fiscal year 2021, of which $879,747 in IDEA –Improvement Grant –Part D were passed-through to subrecipients. Effect: The Regional Office of Education #47 is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200.332 as it relates to subrecipient monitoring requirements. Additionally, the effect of noncompliance can result in questioned costs. Cause: The Regional Office of Education #47 experienced staff turnover and did not formally document policies and procedures that provide controls and structures to ensure all of its subrecipient monitoring accountabilities are conducted and complied with. Recommendation: We recommend that the Regional Office of Education #47 establish and maintain effective internal control over federal awards to ensure subrecipients are properly monitored as required by 2 CFR 200.332. This includes: a. Evaluating the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward; b. Conducting subrecipient monitoring procedures; and c. Determining whether the subrecipient met the requirement criteria of 2 CFR 200 Subpart F Audit requirements for a single audit. Management’s Response: Management agrees with this finding.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
Criteria: • §200.303 Internal controls establishes that “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, (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards, (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards., (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. • • 2 CFR §200.332 Requirements for pass-through entities establishes that “All pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. • • Pass-through entity monitoring of the subrecipient must include (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; and (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings”. Condition: The Chapter 11 Subrecipients Management and Monitoring Manual, subrecipients with risk assessment profile classified as High-High Risk (HH), require an annual site visit. However, during the year ended June 30, 2020, from six (6) subrecipients classified as HH, two (2) were not visited during the period. The subrecipients not visited were the following: Cause: Lack of implementation of work plan that includes monitoring process for at least major subrecipients before year end, in order to avoid noncompliance on subrecipients’ procedures. Effects: • • Noncompliance may be performed by subrecipients without timely evaluation to remediate possible questioned costs, which may result in delay receipt of funds through remediation be implemented. • • Incomplete monitoring process can prevent COR3 from timely detection of a material noncompliance from subrecipients. Questioned Costs: None. Identification as a repeat finding: Finding is a repeat of a finding in the immediately prior year and was identified as finding number 2019-07. Recommendation: • • We recommend management to implement a work plan for monitoring subrecipients to ascertain that major subrecipients be monitored during the year, or at reaching to determine threshold on used federal funds used in order to timely react to and avoid possible non-compliances. • • In addition, we recommended management to ascertain that all procedures related to the monitoring process be implemented.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
Criteria: • §200.303 Internal controls establishes that “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, (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards, (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards., (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. • • 2 CFR §200.332 Requirements for pass-through entities establishes that “All pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. • • Pass-through entity monitoring of the subrecipient must include (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; and (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings”. Condition: The Chapter 11 Subrecipients Management and Monitoring Manual, subrecipients with risk assessment profile classified as High-High Risk (HH), require an annual site visit. However, during the year ended June 30, 2020, from six (6) subrecipients classified as HH, two (2) were not visited during the period. The subrecipients not visited were the following: Cause: Lack of implementation of work plan that includes monitoring process for at least major subrecipients before year end, in order to avoid noncompliance on subrecipients’ procedures. Effects: • • Noncompliance may be performed by subrecipients without timely evaluation to remediate possible questioned costs, which may result in delay receipt of funds through remediation be implemented. • • Incomplete monitoring process can prevent COR3 from timely detection of a material noncompliance from subrecipients. Questioned Costs: None. Identification as a repeat finding: Finding is a repeat of a finding in the immediately prior year and was identified as finding number 2019-07. Recommendation: • • We recommend management to implement a work plan for monitoring subrecipients to ascertain that major subrecipients be monitored during the year, or at reaching to determine threshold on used federal funds used in order to timely react to and avoid possible non-compliances. • • In addition, we recommended management to ascertain that all procedures related to the monitoring process be implemented.
Finding No.: 2019-012 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Criteria: In accordance with CFR part 200.332, a pass-through entity’s monitoring responsibilities include verification that every subrecipient is audited when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the $750,000 threshold set forth in §200.501 Audit requirements. In addition, to equally distribute subawards, CHCC should issue public publication notices for interested nonprofit organizations to apply. Condition: Of five subrecipients tested, aggregating $160,000 of a total population of $468,864, the following deficiencies were noted: 1. For five (or 100%), documentation of the monitoring procedures performed to determine whether any of the subrecipients expended $750,000 or more in federal funds and whether those that expended $750,000 or more were audited, were not provided. Total FY2019 expenditures under the subrecipient agreements were $353,864, which is a questioned costs. Finding No.: 2019-012, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Condition, continued: Test of fourteen nonpayroll expenditures pertaining to subrecipient transactions, aggregating $438,864 of a total population of $468,864, the following deficiencies were noted: 2. For fourteen (or 100%), public publication notices of subaward opportunities were not provided. Total FY2019 expenditures under the subrecipient agreements for Document Numbers 1436077, 1436266, 1456803 and 1446815 amounted to $115,000, which are for the same subrecipients, are questioned. No questioned costs are presented for the other Document Numbers as amounts are questioned at Condition 1, for which are for the same subrecipients. Finding No.: 2019-012, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Condition, continued: 3. For one (or 7%), supporting documents were not provided. No questioned costs is presented as the amount questioned at Condition 2 for Document Number 1436077 is for the same subrecipient. Cause: CHCC did not enforce recordkeeping and monitoring controls over applicable subrecipient monitoring requirements. Effect: CHCC is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $468,864 result. Identification as a Repeat Finding: Finding No. 2018-019. Recommendation: CHCC should establish and enforce required monitoring procedures and establish a recordkeeping system whereby underlying support for each transaction is processed timely and filed accordingly for easy retrieval to substantiate costs. Finding No.: 2019-012, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Views of Responsible Officials: CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding described in Conditions 1 to 3. Auditor Response: Condition 1 - Invoices, receipts and progress reports from prior disbursements were not provided. Condition 2 - Public publication notices of subaward opportunities were not provided. Condition 3 - We were not made aware that the transaction was voided and the corresponding reversal journal entry was also not provided. In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.
Finding No.: 2019-012 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Criteria: In accordance with CFR part 200.332, a pass-through entity’s monitoring responsibilities include verification that every subrecipient is audited when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the $750,000 threshold set forth in §200.501 Audit requirements. In addition, to equally distribute subawards, CHCC should issue public publication notices for interested nonprofit organizations to apply. Condition: Of five subrecipients tested, aggregating $160,000 of a total population of $468,864, the following deficiencies were noted: 1. For five (or 100%), documentation of the monitoring procedures performed to determine whether any of the subrecipients expended $750,000 or more in federal funds and whether those that expended $750,000 or more were audited, were not provided. Total FY2019 expenditures under the subrecipient agreements were $353,864, which is a questioned costs. Finding No.: 2019-012, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Condition, continued: Test of fourteen nonpayroll expenditures pertaining to subrecipient transactions, aggregating $438,864 of a total population of $468,864, the following deficiencies were noted: 2. For fourteen (or 100%), public publication notices of subaward opportunities were not provided. Total FY2019 expenditures under the subrecipient agreements for Document Numbers 1436077, 1436266, 1456803 and 1446815 amounted to $115,000, which are for the same subrecipients, are questioned. No questioned costs are presented for the other Document Numbers as amounts are questioned at Condition 1, for which are for the same subrecipients. Finding No.: 2019-012, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Condition, continued: 3. For one (or 7%), supporting documents were not provided. No questioned costs is presented as the amount questioned at Condition 2 for Document Number 1436077 is for the same subrecipient. Cause: CHCC did not enforce recordkeeping and monitoring controls over applicable subrecipient monitoring requirements. Effect: CHCC is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $468,864 result. Identification as a Repeat Finding: Finding No. 2018-019. Recommendation: CHCC should establish and enforce required monitoring procedures and establish a recordkeeping system whereby underlying support for each transaction is processed timely and filed accordingly for easy retrieval to substantiate costs. Finding No.: 2019-012, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 Area: Subrecipient Monitoring Questioned Costs: $468,864 Views of Responsible Officials: CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding described in Conditions 1 to 3. Auditor Response: Condition 1 - Invoices, receipts and progress reports from prior disbursements were not provided. Condition 2 - Public publication notices of subaward opportunities were not provided. Condition 3 - We were not made aware that the transaction was voided and the corresponding reversal journal entry was also not provided. In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.
2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.