Finding Number - 2025-006 Late vendor credits Agency Department of Health & Human Services Federal Program Medicaid Cluster ALN 93.778 Compliance Requirement Cost Principles Type of Finding Internal Control over Compliance / Compliance Category Other Criteria In accordance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR §200.305(b)(1) requires that pass-through entities ensure payments to subrecipients are made in a timely manner, generally within a reasonable period after receipt of a valid request for payment. Federal guidance and established administrative practice interpret a reasonable period for purposes of cash management compliance to mean no later than 30 calendar days following receipt of a proper payment request, unless the pass-through entity reasonably determines the request to be improper. This requirement applies regardless of whether the federal award operates on a reimbursement basis and is intended to ensure compliance with federal cash management standards and minimize the time between disbursement of funds and federal reimbursement. Criteria – (continued) For Medicaid program (Assistance Listing 93.778), CMS regulations further require that expenditures claimed for Federal Financial Participation (FFP) be based on actual, incurred, and properly documented costs in accordance with 42 CFR §433.32 and applicable CMS financial management guidance. CMS oversight emphasizes timely payment and proper cash management practices to ensure that expenditures are valid and that federal funds are drawn only for allowable and properly incurred costs. Additionally, 2 CFR §200.332(a) requires pass-through entities to monitor subrecipients and ensure compliance with applicable federal requirements, including adherence to cash management provisions. Condition During testing of subrecipient disbursements, it was noted that six (6) payments included in the sample of 178 were made more than 30 calendar days after the pass-through entity received a valid request for payment from the subrecipient. The delays ranged from 46 to 150 days beyond the regulatory requirement. Item No. Check Date (Voucher id) Invoice Date Audited Amount 1 1/24/2025 00536685 12/4/2024 $ 1,458 2 5/23/2025 00553562 12/23/2024 $ (1,321,563) 3 5/23/2025 00553519 12/23/2024 $ 2,111 4 5/23/2025 00553562 4/1/2025 $ (220,261) 5 7/23/2024 00515301 6/7/2024 $ 5,876 6 7/23/2024 00515303 6/7/2024 $ 8,911 Also, we identified two (2) instances in which vendor credits related to previously issued invoices were not applied to the corresponding invoices until approximately one (1) to three (3) months after the original drawdown was requested. Item No. Invoice number Invoice date Credit amount Drawdown not including credit Date credit return Days 1 RF VITAL 25-003 12/27/2024 $ (1,321,563) 1/13/2025 6/3/2025 -141 2 RF VITAL 25-006 4/10/2025 $ (220,261) 4/28/2025 6/3/2025 -36 Cause The delays in payment were primarily attributable to internal cash management and administrative practices, including the practice of awaiting the receipt of federal funds or internal approvals prior to issuing payment to the subrecipient. These practices were not aligned with the timing requirements established under Uniform Guidance. Management indicated that the Program waits until sufficient positive fund balances are available before processing the return of outstanding credits. As a result, certain credit balances may remain pending until adequate funds are available to complete the reimbursement. This practice may delay the timely return of funds in accordance with applicable requirements. Effect Failure to remit payment to subrecipients within the required 30-day timeframe. Continued noncompliance may increase the risk of: a) Audit findings under the Uniform Guidance, b) Increased federal oversight, c) Potential questioned costs, and d) Strained financial operations for subrecipients due to delayed reimbursement. The delayed application of credits resulted in temporary overstatements of expenditures used to support Federal drawdowns. Although the credits were eventually applied, the timing difference may result in noncompliance with cash management requirements under 2 CFR §200.305, as Federal funds may have been drawn in excess of immediate cash needs. Questioned Costs None Perspective Information This finding was identified during the audit of the Medicaid program (Assistance Listing 93.778) for the fiscal year ended 2025. The payments tested related to expenditures incurred and invoiced by a state agency acting as a subrecipient under an interagency agreement. Although both the pass-through entity and the subrecipient are agencies within the same state government, federal regulations treat them as distinct entities for purposes of cash management compliance. Prior Year Audit Finding This is not a prior year finding Recommendation It is recommended that the pass-through entity strengthens internal controls over subrecipient payments to ensure that all valid requests for payment are processed and paid within the 30-calendar-day timeframe required by 2 CFR §200.305(b)(1). Management should also ensure that payment procedures are not contingent upon the timing of federal drawdowns and that any delays are adequately documented and communicated to the subrecipient. We recommend that management strengthen internal controls over the drawdown process by implementing a formal review procedure to verify that all outstanding vendor credits have been identified and applied prior to submitting a Federal draw request. Views of Responsible Officials and Planned Corrective Actions The PRDH’s management agrees with this finding. Please refer to the corrective action on pages 57-60.
Finding Number: 2025-012 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not applicable AL Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Federal Awarding Agency: U.S. Department of Treasury Federal Award Number(s): CPFFN0186 Federal Award Year(s): 2022 Compliance Requirement(s) Affected: Allowable Cost/Cost Principles Type of Finding: Noncompliance Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.332(b), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward. The following is a partial listing of the information a pass-through entity must provide when available: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient’s unique entity identifier (UEI). Condition and Context: ALA reviewed five broadband infrastructure projects totaling $39,789,080, from a total of 20 broadband infrastructure projects totaling $127,227,854, and noted the grant awards had been issued to internet service providers (ISPs) with a unique entity identifier; however, the ISP was not always the entity that would construct and own the broadband network. Several of these ISPs were wholly owned subsidiaries of electric cooperatives, which have a different unique entity identifier. ALA reviewed 247 invoices associated with 15 reimbursement requests and noted 173 invoices totaling $10,793,988 in which the expenses submitted for reimbursement were incurred and paid by the electric cooperative instead of the ISP. ALA also noted 6 instances totaling $3,364,595 in which the reimbursement payments related to these invoices were made to the electric cooperative instead of the ISP. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: The Arkansas State Broadband Office (ASBO) did not execute the grant agreements with the party that would have ownership of the broadband network when the project was complete. Effect: Failure to ensure grant agreements are executed with the appropriate subrecipient could lead to the submission of expenses and payments that are improper. Recommendation: ALA staff recommend the Agency ensure the subrecipient in the grant agreement is the party that will construct and own the broadband network when it is complete. Doing so will ensure the subrecipient is able to submit and be reimbursed for expenses incurred and place the liability for completion of the project with the appropriate party. Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding the execution of subaward agreements with ISP entities that are wholly owned subsidiaries of electric cooperatives and the related affiliate payment structure. Subaward agreements were executed with legally distinct ISP entities holding unique entity identifiers (UEIs) and responsible for performance under the Capital Projects Fund (CPF) award. In certain instances, affiliated parent entities processed invoice payments as part of established intercompany accounting practices. These arrangements reflected corporate structure and operational efficiencies rather than an intent to shift accountability or bypass program requirements. ASBO notes that no questioned costs were identified and that project deliverables were completed in accordance with the terms of the award. The ISP entities remained responsible for reporting, certification, and compliance under the executed agreements. ASBO recognizes, however, that clearer documentation of intercompany payment flows would strengthen audit traceability and reduce ambiguity regarding which legal entity incurred and paid specific costs. To enhance documentation clarity, ASBO will require subrecipients with affiliated entities to maintain documented intercompany reconciliations where applicable and will update subaward templates to further clarify entity-level responsibility for payment, ownership, and record retention. Internal review procedures will also be reinforced to ensure alignment between invoicing practices and designated subrecipient entities. Anticipated Completion Date: June 30, 2026 Contact Person: Glen Howie State Broadband Director Arkansas State Broadband Office 1 Commerce Way Little Rock, AR 72202 (501) 683-6000 broadband@arkansas.gov
Finding Number: 2025-014 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not applicable AL Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Federal Awarding Agency: U.S. Department of the Treasury Federal Award Number(s): CPFFN0186 Federal Award Year(s): 2022 Compliance Requirement(s) Affected: Matching, Level of Effort, and Earmarking Type of Finding: Noncompliance Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.332(b)(2), a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and conditions of the federal award. Arkansas State Broadband Office (ASBO) procedures also require any special conditions to be disclosed in the grant agreement. Condition and Context: Federal guidelines do not require cost sharing or matching funds; however, ASBO procedures require a minimum match of 25%. The specific amount of matching required above can vary with each project. A proposed matching amount is submitted by each applicant for a project and evaluated as part of the award process. ASBO did not include the final required matching amount in the grant agreement. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: ASBO management did not include required matching amounts in the grant agreement. Effect: Failure to include all significant terms in the grant agreement could result in a subrecipient’s noncompliance due to lack of knowledge and understanding of required responsibilities. Recommendation: ALA staff recommend the Agency include all significant terms (including required matching amounts) in the grant agreement. Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding the inclusion of required matching amounts in the executed grant agreements. The Capital Projects Fund (CPF) program does not require cost sharing or matching funds under federal guidance. However, the Arkansas State Broadband Office (ASBO) incorporated a minimum match expectation as part of its state-level program design and evaluation process. Proposed match commitments were submitted by applicants and evaluated during the award process. ASBO recognizes that the final required match amount was not expressly stated in the executed grant agreement. While match expectations were documented during application review and award evaluation, ASBO agrees that explicitly including the finalized match requirement in the executed agreement would provide greater clarity and reduce ambiguity. ASBO notes that no questioned costs were identified in connection with this finding. ASBO will update its grant agreement templates to ensure that any state-imposed matching requirements are explicitly incorporated into the final executed agreement. This enhancement will ensure alignment between program evaluation criteria and formal award documentation going forward. Anticipated Completion Date: June 30, 2026 Contact Person: Glen Howie State Broadband Director Arkansas State Broadband Office 1 Commerce Way Little Rock, AR 72202 (501) 683-6000 broadband@arkansas.gov
Finding Number: 2025-016 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not applicable AL Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Federal Awarding Agency: U.S. Department of the Treasury Federal Award Number(s): CPFFN0186 Federal Award Year(s): 2022 Compliance Requirement(s) Affected: Subrecipient Monitoring Type of Finding: Noncompliance Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.332(e), a pass-through entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with federal statutes, regulations, and the terms and conditions of the subaward. As outlined in the Uniform Guidance at 2 CFR Part 200, Subpart E regarding Cost Principles, allowable costs must meet the following criteria: (1) be necessary, reasonable, and allocable for the performance of the federal award, (2) be accorded consistent treatment as either a direct cost or indirect cost, and (3) be adequately documented. Condition and Context: The broadband infrastructure grants are for the construction and deployment of broadband infrastructure projects designed to deliver, upon project completion, service that reliably meets or exceeds symmetrical download and upload speeds of 100 Mbps. When construction and deployment are completed, the subrecipient notifies the Arkansas State Broadband Office (ASBO) in writing. ASBO has contracted with a third-party vendor to perform a technical close-out, which involves field visits and the issuance of a letter to confirm the work has been completed in accordance with the grant agreement. ALA reviewed 5 of 20 projects and noted that 1 project reviewed was not properly closed out. The project was completed in October 2024, and a technical close-out letter was issued in December 2024. In October 2025, the subrecipient requested permission to perform equipment upgrades to the network, and the third-party contractor rescinded the close-out letter, allowing additional expenses of $2,096,990 to be submitted for reimbursement. As indicated in the technical close-out letter issued in December 2024, these upgrades were not necessary for completion of the network in accordance with the grant agreement. Once the network has been completed, any further costs incurred are considered maintenance costs and are the responsibility of the subrecipient. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: $2,096,990 Cause: ASBO management did not ensure that only expenses necessary for performance of the federal award were included as allowable costs. Effect: Failure to properly close-out grants in compliance with Agency procedures could result in reimbursement of expenses that are unallowable. Recommendation: ALA staff recommend the Agency follow close-out procedures and ensure maintenance expenses incurred after the completion of the project are not included as allowable costs. Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding the sequencing of the technical close-out letter and subsequent expenditures for one project. ASBO respectfully clarifies that a Technical Close-Out Letter reflects that the primary network infrastructure has been constructed and service capability established. It does not necessarily signify final project completion for all eligible cost components under the grant agreement. Project completion for reporting purposes occurs upon final reporting to the U.S. Department of the Treasury. In October 2025, the subrecipient requested approval to perform additional network equipment upgrades using remaining grant funds. ASBO obtained written confirmation from the U.S. Department of the Treasury Senior Federal Program Officer that the identified OLT upgrade constituted an eligible network component necessary to deliver service and was not maintenance. No additional grant funds were awarded for this work; the proposal involved remaining grant balances. It should be noted that as of the date of audit review, no expenses had been incurred related to the proposed upgrade. As such, ASBO does not concur that the identified $2,096,990 represents ongoing maintenance costs or unallowable expenditures. In fact, all reimbursements to date include eligible network build-out costs incurred prior to “technical closeout” but financially processed after that date, or fiber-to-the-home (FTTH) drops. FTTH drops have been an allowable expense in the Arkansas CPF Program following technical closeout yet prior to reporting the project complete to U.S. Treasury. The misclassification of these costs as maintenance appears to stem from an assumption that they were related to the proposed network upgrade, when in actuality, they were not. To avoid ambiguity in future projects, ASBO will formalize procedures clarifying the distinction between technical close-out, formal project completion, and eligible use of remaining funds. Any Treasury-approved scope clarifications or post-close-out adjustments will be formally documented prior to reimbursement to ensure alignment between technical certification and financial reporting. Anticipated Completion Date: June 30, 2026 Contact Person: Glen Howie State Broadband Director Arkansas State Broadband Office 1 Commerce Way Little Rock, AR 72202 (501) 683-6000 broadband@arkansas.gov
Finding Number: 2025-017 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not applicable AL Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Federal Awarding Agency: U.S. Department of the Treasury Federal Award Number(s): CPFFN0186 Federal Award Year(s): 2022 Compliance Requirement(s) Affected: Subrecipient Monitoring Type of Finding: Noncompliance Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.332(e), a pass-through entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with federal statutes, regulations, and the terms and conditions of the subaward. Condition and Context: Arkansas State Broadband Office (ASBO) procedures require subrecipients to maintain an irrevocable standby letter of credit equal to 100% of the grant award amount disbursed. The irrevocable standby letter of credit must be accompanied by an opinion letter from the subrecipient’s legal counsel stating the letter of credit and its proceeds will not be subject to a Chapter 11 bankruptcy proceeding. The letter of credit must remain in place until the project is completed. In lieu of a letter of credit, the subrecipient may furnish a performance bond in an amount equal to the grant award. ALA reviewed 5 of 20 projects to determine if the letter of credit or performance bond for the appropriate amount was properly maintained by the subrecipient. ALA noted that a letter of credit was not maintained for the required amount for 1 of the 5 projects reviewed. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: ASBO management did not adequately monitor subrecipients to ensure compliance with letter of credit requirements. Effect: Failure to properly monitor subrecipients could result in noncompliance with federal laws and regulations. Recommendation: ALA staff recommend the Agency ensure subrecipients maintain a letter of credit in accordance with ASBO requirements. Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation that, for one project reviewed, the required irrevocable standby letter of credit was not maintained at the full amount required under ASBO procedures. ASBO recognizes that ongoing monitoring of letter of credit requirements is an important safeguard to ensure subrecipient compliance and protect program funds. No questioned costs were identified in connection with this matter. ASBO has implemented enhanced monitoring procedures to verify and document that required letters of credit or performance bonds are maintained at the appropriate level throughout the project period. This includes periodic verification and documented review to ensure continued compliance with program requirements. Anticipated Completion Date: June 30, 2026 Contact Person: Glen Howie State Broadband Director Arkansas State Broadband Office 1 Commerce Way Little Rock, AR 72202 (501) 683-6000 broadband@arkansas.gov
Finding 2025-005: CDBG Subrecipient Monitoring At Metro Government’s Office of Housing and Community Development (“OHCD”) Needs Improvement Federal Program: ALN 14.218 Community Development Block/Entitlement Grants Name of Federal Agency: U.S. Department of Housing and Urban Development Award Identification Number and Year: B-21-MC-21-0008, B-22-MC-21-0008, B-20-MC-21-0008, B-18-MC-0008, B-23-MC-21-0008, and B-24-MC-211-008 Name of pass-through entity: N/A COVID Identification: No Amount of Questioned Costs: N/A Compliance Requirement: Subrecipient monitoring Criteria:The Metro Government Subrecipient Management Policy Manual states, “Title 2 CFR 200.332 requires all pass-through entities to evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward to determine the appropriate monitoring needed to ensure Federal funds are used properly. Passthrough entities are not required to complete a risk assessment on contractors. Metro agencies must complete risk assessments on all subrecipients no less than annually.” 2 CFR 200.332(c) states, “Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient’s risk, a pass-through entity should consider the following: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also received Federal awards directly from the Federal agency).” Condition: During FY 2025, a total of $9,780,961 in CDBG funds were distributed to 21 subrecipients by Metro Government. Monitoring these subrecipients was conducted by two offices. The Office of Social Services (“OSS”) monitored 11 subrecipients totaling $5,306,082. The Office of Housing and Community Development (“OHCD”) was responsible for monitoring 10 subrecipients totaling $4,474,879. OSS is responsible for monitoring the subrecipients that have subawards for CDBG operating and service projects. OSS completes the following procedures when monitoring their subrecipients: completing a risk assessment spreadsheet, maintaining a historic log documenting the dates of when each subrecipient was monitored, and desk reviews and/or site visits. High risk subrecipients are monitored more frequently compared to those assessed at a lower risk. Subrecipients are required to be monitored at least once every three years. The OHCD is responsible for monitoring subrecipients that have subawards for CDBG capital projects. OHCD conducts informal, undocumented risk assessments of subrecipients. No site visits were conducted in fiscal year 2025. Effect: The OHCD did not adequately monitor its subrecipients during fiscal year 2025. Cause: The OHCD did not have a designated individual responsible for subrecipient monitoring during fiscal year 2025. Recommendation: We recommend the OHCD adopt the procedures and documentation practices established by OSS. Specifically, this includes conducting site visits, assessing each subrecipient’s risk of noncompliance, performing desk reviews and site visits, and maintaining comprehensive documentation of risk assessment and monitoring activities.
Finding #2025-001: #84.048 -Career and Technical Education - Basic Grants to States Federal Grantor Agency: U.S. Department of Education Compliance Requirement: Subrecipient Monitoring Condition: During our audit procedures, we noted that the District does not have formal, written procedures governing subrecipient monitoring. Although the District reviews supporting documentation—such as invoices—submitted by subrecipient schools prior to submitting claims to the Department of Public Instruction (DPI), these practices are not documented in an established policy or procedure. Criteria: Uniform Guidance (2 CFR 200.331–200.332) requires pass-through entities to establish and implement written procedures for monitoring subrecipients to ensure compliance with federal program requirements and achievement of performance goals. Cause: The District has not developed or implemented formal written policies and procedures for subrecipient monitoring. Effect: In the absence of formalized procedures, the District’s monitoring practices may be applied inconsistently, increasing the risk of unallowable costs, noncompliance with federal requirements, or misunderstandings between the District and its subrecipients. This could lead to questioned costs or administrative issues during oversight by DPI or other regulatory bodies. Recommendation: We recommend that the District develop and adopt formal written procedures outlining its subrecipient monitoring activities. These procedures should clearly describe monitoring responsibilities, required documentation, review steps, communication expectations, and follow-up actions. Implementing a formalized process will help ensure consistent oversight and compliance with federal regulations. Grantee Response: The District will develop and implement written procedures that outline the required monitoring steps, documentation standards, communication protocols, and follow-up expectations for subrecipient oversight. These procedures will align with the requirements of Uniform Guidance and DPI expectations.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Home Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: M24-MC-51-0001, 2024 Award Period: 10/1/2023 to 9/30/2033 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control, Other Matter Criteria or Specific Requirement: Internal Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintaineffective 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 theterms and conditions of the Federal award. These internal controls should comply with guidance in“Standards for Internal Control in the Federal Government” issued by the Comptroller General of theUnited States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: 2 CFR §200.332(a) - Requirements for Pass-Through Entities states, in part, that all passthrough entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward: (i) Subrecipient's name (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 in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with § 200.414). Condition: The City did not furnish the information below to subrecipients at the time the subawards were issued: a. Federal Award Identification Number (FAIN) b. Subaward Budget Period Start and End Date c. Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) d. Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity e. Assistance Listings title and number f. the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement g. Identification of whether the Federal award is for research and development. Questioned Costs: None Context: The City failed to include the required information as noted above in the subrecipient agreements. Cause: The City failed to include all required information in the subrecipient agreements. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about program-specific regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in subrecipients’ Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Repeat Finding: No Recommendation: The City should review and enhance its internal controls and procedures to ensure that all required information is included in subawards at the time of issuance and maintained in subsequent modifications. Views of Responsible Officials: There is no disagreement with the audit finding and the City will undertake additional training for departments in FY 2026, to include providing departments with a grants responsibility checklist.
2025-004-Subrecipient Monitoring Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: During our testing over subrecipient monitoring, the County was unable to provide subrecipient monitoring support. Questioned Costs: None Context: We selected a sample of 7 subrecipients as part of our testing over Subrecipient Monitoring. Of the 7 subrecipients selected, the County was unable to provide adequate support for the subrecipients selected. Cause: The County has policies that require departments to conduct subrecipient monitoring to ensure compliance with grant requirements. However, the policy does not include documentation of these monitoring activities, such as site visits, financial reviews, or performance evaluations. This lack of documentation results in an inability to verify that subrecipient monitoring is being performed effectively and consistently. Effect: Without proper oversight, subrecipients may fail to achieve program goals and objectives, leading to poor performance and outcomes for the funded programs. Repeat Finding: Yes Recommendation: We recommend that the County implement procedures to ensure that federal guidance is followed related to subrecipient monitoring and provide training on these procedures, including maintaining documentation of the review performed by the County. View of Responsible Officials: There is no disagreement with the audit finding.
2025-001 Subrecipient Monitoring Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Number 93.912 Rural Health Care Services Outreach, Rural Health Network Development, and Small Health Care Provider Quality Improvement Award Numbers GA1RH33517, G28RH46280 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 U.S. Code of Federal Regulations (CFR) 200.332 requires that passthrough entities monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with federal statutes, regulations, and the terms and conditions of the subaward. Pass-through entities must review financial and performance reports, to ensure the goals and objectives of the awards are achieved and are required to verify that subrecipients are audited as required by Uniform Guidance, when applicable. Condition During our testing of subrecipient monitoring, we noted that the Network does not have any documented policies and procedures regarding the monitoring of subrecipients. Monitoring activities performed were not sufficient to ensure subrecipient compliance with federal statutes, regulations, and the terms and conditions of the subawards. This finding appears to be a systemic problem. Cause Management does not have a documented policy for monitoring its subrecipients and ensuring the requirements for pass-through entities are met. Effect Without a documented policy to monitor subrecipients, there is an increased risk that noncompliance or performance issues at subrecipients may not be timely identified, addressed, or documented. This may result in the Network being noncompliant with Uniform Guidance and could result in questioned costs and adversely impact the Network’s federal funding. Questioned Costs None noted. Context In a sample of 2 out of 7 subrecipients, we noted that the Network’s monitoring procedures were limited to the review and approval of expenditures based on subrecipient invoice submissions and quarterly performance reports provided by the subrecipients. Recommendation We recommend that the Network develop and implement formal written policies for monitoring subrecipients. These policies should specify both financial and programmatic monitoring procedures, including annual risk assessments for all subrecipients. Based on the assessed level of risk, the Network should perform additional monitoring activities as appropriate, such as trainings, site visits, or enhanced oversight. In addition, we recommend that the Network establish procedures to track, document, and follow up on all monitoring activities, including audit findings and related corrective actions. Views of responsible officials and planned corrective action Management agrees with 2025-001 Subrecipient Monitoring on the schedule of findings and questioned costs. KCHN did not consistently perform and/or document required subrecipient monitoring activities.
Finding Number: 2025-002 Program: Housing Opportunities for Persons with AIDS (HOPWA) ALN #: 14.241 Pass-through Entity: N/A- Direct Award Federal Agency: Department of Housing and Urban Development Federal Award Year: July 1, 2024 – June 30, 2025 Compliance Requirement: Subrecipient Monitoring Type of finding: Material weakness and material noncompliance Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of 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). Condition The City has not implemented the designed controls and procedures to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated and level of monitoring is determined. • Appropriate monitoring and review of the subrecipient based on their risk of noncompliance. • Ensure that subrecipients are not suspended or debarred prior to entering into a contract with the City. Cause The City does not have formal written policies, procedures, and internal controls in place to ensure that all required subrecipient monitoring procedures are performed.Proper perspective During our audit, we noted that four of the four subrecipients selected for testing did not have a completed risk assessment to determine their risk of noncompliance. As such, we were unable to determine that the proper level of monitoring was completed throughout the fiscal year over the contracted subrecipient. Additionally, there was no evidence that the City ensured the subrecipient was not suspended or debarred from working under a federal engagement prior to entering into the contract. Possible asserted effect Lack of effective controls over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned costs None Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat finding Yes, 2024-003 Recommendation We recommend the City establish a checklist or formal documentation to assess each subrecipient and their risk of non compliance prior to entering into a formal contract. The City should then use this risk assessment to determine the level of monitoring that is required throughout the term of the contract. Views of responsible officials and corrective actions The City has established a Risk Assessment tool that rates each HOPWA subrecipient across nine factors: 1) award amount, 2) timeliness of reporting, 3) timeliness of invoicing, 4) quality of reporting, 5) program complexity, 6) staff capacity, 7) staff turnover, 8) management changes, and 9) grantee history. The City will use this tool to determine the appropriate level and frequency of monitoring for each subrecipient.
Finding Number: 2025-005 Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Pass-through Entity: N/A- Direct Award Federal Agency: U.S. Department of Treasury Federal Award Year: July 1, 2024–June 30, 2025 Compliance Requirement: Subrecipient Monitoring Type of finding: Material weakness and material noncompliance Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of 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). Condition The City does not have effective controls in place to ensure compliance with the following requirements: • Each subrecipients risk of noncompliance is appropriately evaluated and level of monitoring is determined. • Verification and review that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. • All required elements of the subrecipient contracts are included during execution. Cause The City’s lack of effective internal controls which caused the following noncompliance and control exceptions.Proper perspective During the audit, we noted that six of the nine subrecipient selections did not contain all the required elements of the contract. Additionally, for nine of the nine selections, the City did not complete a risk assessment or conclude on the subrecipient's risk of noncompliance. We also noted that for two of the subrecipients that required a single audit, there was no evidence to support the nature and extent of the City's review of those audit reports. Therefore, we were unable to determine, based on the subrecipient's risk assessment and single audit reports, the proper level of monitoring procedures to be performed. Possible asserted effect Lack of effective controls over subrecipient monitoring could result in the City’s noncompliance with program requirements. Questioned costs None Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, 2024-009 Recommendation We recommend the City establish a checklist or formal documentation requirements for both risk assessments and review of single audit report procedures. Employees can complete these checklists when obtaining and reviewing the documentation. The City should then conclude on and document the subrecipient’s risk of noncompliance based on the checklist to ensure the proper level of monitoring occurs throughout the year. Views of responsible officials and corrective actions The city already established a well-designed internal control manual of policies and procedures over the ARPA grant's full cycle grant management, as well as various templates to evaluate the subrecipients' risks and monitoring their performances. In FY26, the city will implement its internal control by conducting timely subrecipient monitoring activities with signed documents
Finding No. 2025-043 Federal Awarding Agency: USDOC Impact: Significant Deficiency, Noncompliance AL Number and Title: 11.438 PCSRT Federal Award Number: NA24NMFX438G0056 Applicable Compliance Requirement: Subrecipient Monitoring Condition: A review of six FY 25 PCSRT subrecipients’ subaward agreements found that one did not include an accurate unique entity identifier (UEI) that matched the subrecipient’s name. Context: All federal award recipients are required to have a UEI. DFG enters into awards with subrecipients using a subaward agreement. The subaward agreement lists the federal requirements that pertain to the subaward and must identify the subrecipient’s UEI. The audit reviewed six subaward agreements, and found that one contained an incorrect UEI. Cause: The finding was caused by human error. In preparing the subaward agreement, staff copied and pasted the UEI from a different subrecipient’s information. Supervisory review procedures were insufficient to detect and correct the error. Criteria: Title 2 CFR 200.332 requires pass-through entities to ensure that every subaward includes the required information at the time of the subaward. Required information includes the subrecipient’s name, which must match the name associated with the subrecipient’s UEI. Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Effect: Not providing the correct UEI number hampers subaward reporting and may limit federal oversight of the PCSRT program. Questioned Costs: None Recommendation: DFG’s Commercial Fisheries Division director should strengthen supervisory review procedures to ensure federally required information is accurately identified in PCSRT subaward agreements. Views of Responsible Officials: ADFG disagrees with this finding. During the audit, it was noted that the UEI listed in the subaward agreement contained a copy-and-paste error. This discrepancy was promptly corrected once identified. Under 2 CFR 170, the official compliance requirement for subaward reporting is the Federal Funding Accountability and Transparency Act (FFATA) submission through SAM.gov. In this case: The correct UEI was verified in SAM.gov. The FFATA report contained the correct UEI and was submitted timely. The correct subrecipient was paid, and supporting documentation confirmed the subrecipient’ s identity. These facts demonstrate that the federal reporting requirement was met and that the error was limited to the internal agreement. The issue did not result in improper payments, misreporting to federal systems, or a breakdown in internal controls. This was an isolated clerical error that was promptly corrected during the audit. It does not represent a significant deficiency or material weakness. This seems more appropriately categorized as a minor observation or management comment regarding document review processes. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. DFG management asserts the unique entity identifier number incorrectly recorded in the subaward agreement was correctly reported to sam.gov. However, the reporting of the subaward to sam.gov is a reporting requirement. DFG management is responsible for complying with federalsubrecipient monitoring requirements. We reaffirm the finding.
Finding No. 2025-031 Prior Audit Finding: 2024-037 Federal Awarding Agency: USDHS Impact: Material Weakness, Material Noncompliance AL Number and Title: 97.036 Disaster Grants 97.036 Disaster Grants – COVID-19 Federal Award Number: 4533DRAKP00000001, 4730DRAKP00000001 Applicable Compliance Requirement: Subrecipient Monitoring Condition: A review of 21 FY 25 Disaster Grants subrecipient obligating award documents (OAD) found that three did not include an accurate unique entity identifier (UEI) that matched the subrecipient’s name and one did not provide a UEI. Context: DMVA enters into awards with subrecipients using the OAD as the subgrant agreement. The subrecipient’s name and UEI are recorded on the OAD. An assurances and agreement form accompanies the OAD that includes additional federal requirements not included in the OAD. Subrecipients sign the OAD and the assurances and agreement forms certifying and agreeing to the federal requirements. According to DHSEM management, due to the high number of State disasters and a lack of staff resources, contractors were hired to help evaluate applicant eligibility, make subawards, conduct risk assessments, and monitor accordingly. The audit reviewed a random sample of 20 of 100 subrecipient OADs and one judgmentally selected OAD, including assurances and agreement forms, and found two OADs for one subrecipient in which the subrecipient’s name did not match the name associated with the UEI number provided; one OAD reported a UEI number that did not match the name and address when verified with the federal reporting website; and one OAD did not include a UEI number. Cause: According to DHSEM management, due to competing priorities and inadequate supervisory review procedures, DHSEM staff and contractors did not ensure subrecipient’s OADs included a UEI number or an accurate UEI number. Criteria: Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards. Title 2 CFR 200.332 requires pass-through entities ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the required information at the time of the subaward. Required information includes the subrecipient’s name, which must match the name associated with the subrecipient’s UEI. Effect: Not providing the UEI number or correct UEI number hampers subaward reporting and may impact federal oversight of the Disaster Grants program. Questioned Costs: None Recommendation: DMVA’s DHSEM director should strengthen review procedures to adequately monitor contractors to ensure subrecipient information in award documents is accurate. Views of Responsible Officials: Management agrees with this finding.
Finding No. 2025-033 Federal Awarding Agency: USDHS Impact: Material Weakness, Material Noncompliance AL Number and Title: 97.036 Disaster Grants 97.036 Disaster Grants – COVID-19 Federal Award Number: 4533DRAKP00000001, 4730DRAKP00000001 Applicable Compliance Requirement: Subrecipient Monitoring Condition: DMVA staff did not document a risk assessment for two Disaster Grants subrecipients. Context: DMVA receives funding applications from state, local, tribal, and private not-for-profit entities once a disaster has been presidentially declared. Prior to entering into an agreement with an applicant, DHSEM staff perform a risk assessment of the applicant to determine the extent of subrecipient monitoring. DHSEM staff evaluate the applicant by completing a risk assessment checklist, and apply safeguards if the subrecipient is considered high risk. DHSEM staff also complete a payment request checklist, prior to making subrecipient payments to confirm that risk assessments have been performed. According to DHSEM management, due to the high number of State disasters and a lack of staff resources, contractors were hired to help evaluate applicant eligibility, make subawards, conduct risk assessments, and monitor accordingly. The audit reviewed a random sample of eight of 47 subrecipients. One of the eight subrecipients did not have a risk assessment. During allowable cost testing, one additional subrecipient was identified that did not have risk assessment performed. Cause: Due to competing priorities and inadequate supervisory review procedures, DHSEM staff and contractors did not consistently obtain risk assessments and DHSEM management did not adequately monitor contractors to ensure risk assessments were performed. Criteria: Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards. Title 2 CFR 200.332(c) requires the State to assess each subrecipient’s risk of noncompliance to determine the appropriate subrecipient monitoring. Effect: The lack of risk assessments may lead to inadequate monitoring of subrecipients increasing the risk of unallowable use of federal funds. Questioned Costs: None Recommendation: DMVA’s DHSEM director should strengthen supervisory review procedures to adequately monitor contractors and ensure risk assessments are performed. Views of Responsible Officials: Management agrees with this finding.
FINDING 2025-015 Federal Program Information: Research and Development Cluster (various ALN #’s) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management - per 2 CFR Part 200.305(b)(3), when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the federal agency or pass-through entity reasonably believes the request to be improper. M. Subrecipient Monitoring – per 2 CFR Part 200.332(e)(1), a pass-through entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must review financial and performance reports. Additionally, in accordance with 2 CFR 200.332(g), a pass-through entity must verify that a subrecipient is audited as required by Subpart F of Part 200. Condition: The University’s procedures failed to minimize the time elapsing between the transfer of federal funds to the subrecipient and the disbursement of such funds for program purposes by the subrecipient. The University was unable to provide documentation evidencing appropriate, annual review of its subrecipients’ Single Audit reports. Cause: Administrative oversight and insufficient internal controls. Effect or Potential Effect: The University was not in compliance with the requirements for pass-through entities. Questioned Costs: None. Context: • For 3 of 23 subrecipient payments tested, the University was unable to provide documentation evidencing appropriate review by the principal investigator. • For 6 of 23 subrecipients payments tested, payment was not made within the required timeframe. • For 7 of 7 subrecipients tested, the University was unable to evidence its verification of whether an audit had been performed. Identification as a Repeat Finding: This is a repeat of prior year finding 2024-013. Recommendation We recommend that the University enhance subrecipient monitoring controls by implementing documented invoice review protocols and enforcing annual audit verification procedures for all subrecipients. Management should define responsibilities for these reviews, document oversight activities performed, and implement monitoring controls to ensure compliance with federal subrecipient monitoring requirements. Views of Responsible Officials: In response to the auditor’s recommendation to enhance internal controls and ensure timely review of invoice protocols and subrecipient monitoring, Howard University is implementing the following: • The University is currently piloting a new Supplier Invoice Portal, launched jointly by the Sponsored Programs Office and the Office of Procurement, to improve invoicing efficiency and compliance. Under this new process, subrecipients will be required to submit invoices electronically in accordance with the terms and conditions of their subawards. The portal will support a streamlined review and approval process, with invoices routed through an automated workflow to ensure timely review and disbursement. • To support completion of the University’s annual audit verification requirements for subrecipients, oversight will occur at multiple stages throughout the subaward lifecycle. This includes reviewing audit reports at the proposal development stage, during which subrecipients are required to complete a Subrecipient Commitment Form (implemented September 2025) prior to proposal submission. • At the award stage, refreshed due diligence will be conducted, including a re-review of the subrecipient’s Single Audit and/or financial statements. Finally, the Post Award Compliance team will perform an annual review of subrecipients’ audit reports and complete audit follow up procedures as necessary.
Reference Number: 2025-019 Prior Year Finding: 2024-014 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-38535-22-55-A-25 (4/1/2022 – 6/30/2025) 23A55AY000020 (4/2/2023 – 6/30/2026) 23A55AT000036 (7/1/2023 – 6/30/2026) 23A55AW000048 (7/1/2023 – 6/30/2026) 24A55AY000057 (4/1/2024 – 6/30/2027) 24A55AT000067 (7/1/2024 – 6/30/2027) 24A55AW000097 (7/1/2024 – 6/30/2027) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.332(a) - Requirements for Pass-Through Entities states, in part, that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (Department) omitted required federal award information from subawards it issued to their subrecipients. Context: For six of six subawards selected for testing, the subaward agreement did not include the federal award date for when the Federal agency awarded the funds to the prime recipient. Cause: The Department’s procedures and internal controls were not sufficient to ensure that subawards included all required information in accordance with 2 CFR section 200.332. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program information and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required information is included in its subawards. In its FY 2024 corrective action plan, the Department indicated that it had revised its documented internal controls and procedures to correct the prior year finding. We recommend that the Department revisit its procedures and controls and update as needed to ensure that the federal award date is included in all subaward agreements. Views of responsible officials: There is no disagreement with the finding.
Reference Number: 2025-023 Prior Year Finding: 2024-018 Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Aging and Independence Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101MASSC6 (4/1/2021 - 9/30/2024) 2101MAHDC6 (4/1/2021 - 9/30/2024) 2101MACMC6 (4/1/2021 - 9/30/2024) 2201MAOASS (10/1/2021 - 9/30/2024) 2201MAOAPH (10/1/2021 - 9/30/2024) 2201MAOAHD (10/1/2021 - 9/30/2024) 2201MAOANS (10/1/2021 - 9/30/2024) 2201MAOACM (10/1/2021 - 9/30/2024) 2301MAOACM (10/1/2022 - 9/30/2024) 2301MAOAHD (10/1/2022 - 9/30/2024) 2301MAOAPH (10/1/2022 - 9/30/2025) 2301MAOASS (10/1/2022 - 9/30/2024) 2401MAOANS (10/1/2023 - 9/30/2025) 2401MAOASS (10/1/2023 - 9/30/2025) 2401MAOACM (10/1/2023 - 9/30/2025) 2401MAOAHD (10/1/2023 - 9/30/2025) 2501MAOANS (10/1/2024 - 9/30/2026) 2501MAOASS (10/1/2024 - 9/30/2026) 2501MAOACM (10/1/2024 - 9/30/2026) 2501MAOAHD (10/1/2024 - 9/30/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 2 CFR section 200.332(a) - Requirements for Pass-Through Entities states, in part, that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Per 2 CFR section 200.332(e) and (g), pass-through entities must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must review financial and performance reports, ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward, issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity, resolve audit findings specifically related to the subaward, and verify that a subrecipient is audited as required by Subpart F. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply 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). Condition: The Executive Office of Aging and Independence (Department) issued subawards that did not contain all required federal award information, and it failed to properly monitor subrecipients. Context: Exceptions were found for eight of eight subawards selected for testing. Subawards were missing one or more required federal award identification elements and were not properly monitored. Specifically, we noted the following: • 4 of 8 subawards were missing one or more required award identification elements including the Federal Award Date, the Federal Award Identification Number (FAIN), the name of the Federal agency, the Assistance Listing number (ALN) and the federal award title, the dollar amount made available under each ALN, and the federal award project description as required by the Federal Funding Accountability and Transparency Act (FFATA). • 2 of 8 subrecipients selected for testing were not properly monitored by the Department. The Department was unable to provide documentation that it had proper monitoring procedures in place nor that monitoring procedures were followed for these subrecipients. • For 1 of 8 subrecipients, the Department did not obtain a copy of the subrecipient’s annual single audit report. Therefore, the Department did not verify that its annual single audit had been conducted, nor did it issue a management decision on audit findings. Questioned costs: Undetermined. Cause: The Department’s procedures and internal controls were not sufficient to ensure that the Department provided all required federal information to subrecipients at the time of the subaward nor that subrecipient monitoring was completed in accordance with the requirements of the federal programs. Auditors noted that the Department’s corrective action plan from the prior audit had not been completed. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. There is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Department personnel on a timely basis. Recommendation: We recommend the Department complete implementation of its corrective action plan from the prior year. The Department should review and enhance internal controls and procedures to ensure that it includes all required information in the subaward agreements. We also recommend the Department review and enhance its internal controls and procedures to ensure subrecipient monitoring is performed in compliance with the requirements of the federal programs. Views of responsible officials: There is no disagreement with the finding.
Reference Number: 2025-027 Prior Year Finding: 2024-022 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Public Health Federal Program: Epidemiology and Laboratory Capacity for Infectious Diseases COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases Assistance Listing Number: 93.323 Award Number and Year: 19NU50CK000518 (8/1/2022 – 7/31/2027) 24NU51CK000343 (8/1/2024 – 7/31/2025) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 2 CFR section 200.332(a) - Requirements for Pass-Through Entities states, in part, that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Per 2 CFR section 200.332(e) and (g), pass-through entities must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must review financial and performance reports, ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward, issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity, resolve audit findings specifically related to the subaward, and verify that a subrecipient is audited as required by Subpart F. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply 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). Condition: The Department of Public Health (Department) did not properly monitor subrecipients and the Department omitted required federal award information from subawards. Context: Eight subawards issued to eight subrecipients were selected for testing. Specifically, we noted the following exceptions: • For eight of eight subrecipients selected for testing, the Department did not adequately monitor the subrecipients. It did not obtain a copy of the subrecipients’ annual single audit report. Therefore, the Department did not verify that the annual single audits had been conducted, nor did it issue a management decision on any audit findings. • For eight of eight subawards selected for testing, the Federal Award Identification Number (FAIN) was omitted from the subaward agreements. Cause: The Department’s procedures were not sufficient to ensure that subrecipients were properly monitored, nor that subawards included all required information. Internal controls did not detect or prevent the errors. The Department had not completed implementation of its corrective action plan from the prior year. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. There is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Department personnel on a timely basis. Questioned costs: None. Recommendation: We recommend the Department complete implementation of its corrective action plan from the prior year. We recommend the Department review and enhance its internal controls and procedures to ensure subrecipient monitoring is performed in compliance with the requirements of the federal program. The Department should review and enhance internal controls and procedures to ensure that it includes all required information in the subaward agreements. Views of responsible officials: There is no disagreement with the finding.
Reference Number: 2025-035 Prior Year Finding: 2024-036 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Public Health (DPH) Federal Program: Opioid-STR Assistance Listing Number: 93.788 Award Number and Year: 1H79TI085778 (9/30/2021 – 9/29/2024) 5H79TI085778 (9/30/2022 – 9/29/2024) 6H79TI085778 (9/30/2023 – 9/30/2025) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.332(a) - Requirements for Pass-Through Entities states, in part, that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Per 2 CFR section 200.332(e) and (g), pass-through entities must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must review financial and performance reports, ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward, issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity, resolve audit findings specifically related to the subaward, and verify that a subrecipient is audited as required by Subpart F. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply 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). Condition: The Department of Public Health (Department) did not properly monitor subrecipients and the Department omitted required federal award information from subawards. Context: Thirteen subawards issued to thirteen subrecipients were selected for testing. Specifically, we noted the following exceptions: • 1 of 13 subawards was missing the Federal Award Identification Number (FAIN). • For 2 of 13 subrecipients selected for testing, the Department did not adequately monitor the subrecipients. The Department did not obtain a copy of the subrecipients’ annual single audit report. Therefore, the Department did not verify that the annual single audits had been conducted, nor did it issue a management decision on audit findings. Cause: The Department had not yet fully implemented its corrective action plan from the prior year. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program requirements and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to conduct adequate subrecipient monitoring may result in a failure of the Department to detect that subawards were used for unauthorized purposes, were managed in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. There is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Department personnel on a timely basis. Questioned costs: None. Recommendation: We recommend the Department complete its corrective action plan from the prior year. The Department should verify that its internal controls and procedures are sufficient to ensure subrecipient monitoring is performed in compliance with the requirements of the federal program and that all required information is included in subaward agreements. Views of responsible officials: There is no disagreement with the finding.
Finding 2025-007: Pre-Award Risk Assessment for Sub-Recipient (Significant Deficiency) Federal Agency: National Institute of Health Federal Program: All of Us Research Program Assistance Listing Number: 93.368 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Condition: During our testing performed over subrecipient expenditures, we were unable to obtain evidence that pre-award risk assessment procedures were performed over subrecipients, consistent with 2 CFR §200.332(b). As such, the Foundation did not adequately determine appropriate monitoring procedures over the sub-recipients. Cause: The Foundation does not have established internal controls or policies regarding subrecipients. Effect or Potential Effect: The Organization could inadvertently be engaged in relationships with subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted as this compliance requirement is a administrative reporting requirement that does not impact cost eligibility. Context: Our audit procedures consisted of substantive testwork over a sample of subrecipients. We consider our sample to be representative of the population. The samples were made using statistical sampling and we believe the condition appeared to be systematic in nature. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend the Foundation formalize internal control procedures and policies with respect to sub-recipient pre-award risk assessment. The risk assessments should be conducted in order to establish appropriate monitoring procedures.
Subrecipient Monitoring Program Name: Crime Victim Assistance (Assistance Listing 16.575) Federal Award Agency: Department of Justice Award Years: Federal Fiscal Years 2021, 2022, and 2023 Federal Award Numbers: 15POVC-21-GG-00615-ASSI, 15POVC-22-GG-00715-ASSI, and 15 POVC-23-GG-00433-ASSI Background The Crime Victim Assistance program provides financial support and various services and resources to crime victims, including crisis counseling, criminal justice support and advocacy, shelter, and therapy. The Judicial Branch provides grants to subrecipients to provide these services. Title 28 U.S Code of Federal Regulations (CFR) Part 94.118 provides that subrecipients shall contribute not less than 20% of the total cost of each project. Subrecipients shall derive these contributions from non-federal sources. Each subrecipient shall maintain records that clearly show the source and amount of the matching contributions.Criteria Title 2 CFR Part 200.303 requires the non-federal entity to establish and maintain effective internal control over federal awards that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 CFR Part 200.332(e) provides that the pass-through entity shall monitor subrecipient activities as necessary to ensure that they comply with federal statutes, regulations, and the terms and conditions of the subaward. Title 28 CFR Part 94.106 provides that the state administering agency shall conduct regular desk monitoring of all subrecipients as well as on-site monitoring of all subrecipients at least once every two years during the award period. The state shall maintain a copy of site visit results and other documents related to compliance. Title 2 CFR Part 200.306(b) provides that the pass-through entity must accept any cost sharing funds as part of the subrecipient’s contributions to a program when the funds are verifiable in the subrecipient’s records. Condition The Judicial Branch did not perform regular subrecipient desk reviews or site visits at least once every two years during the award period as required by federal regulations. The branch does not complete reviews until the award period ends. As a result, it did not promptly examine subrecipients’ underlying documentation such as invoices, timesheets, or support for expenditures or matching contributions. The branch’s monitoring process was limited to monthly reviews of budget-to-actual summaries. Context During the fiscal year ended June 30, 2025, the branch made $8,759,482 in reimbursements to 40 subrecipients.Questioned Costs $0Effect The Judicial Branch has limited assurance that subrecipients used federal funds for allowable activities and met the mandatory matching requirements. This could potentially lead to future disallowed costs and federal repayment obligations.Cause Due to a lack of adequate staffing, the Judicial Branch prioritized reviewing supporting documentation for prior award periods rather than the current period. Prior Audit Finding We have not previously reported this finding.Recommendation The Judicial Branch should strengthen internal controls to ensure it complies with federal subrecipient monitoring requirements for the Crime Victim Assistance program. Views of Responsible Officials “The Judicial Branch Office of Victim Services (OVS) agrees to strengthen its internal controls as described below to comply with federal subrecipient monitoring requirements for the Victims of Crime Act Assistance (VOCA) Program. In 2025, OVS performed site visits for four VOCA-funded programs and completed financial-desk reviews of monthly or quarterly financial reports for all programs. That year, OVS experienced personnel turnover in its three-employee Fiscal Services Unit, notably the separation from state service of a Program Manager and a Court Planner, who together performed OVS’ programmatic site visits of VOCA-funded programs. Also, there was a significant increase in workload resulting from OVS’ contributions to the 2024-2025 VOCA request-for-proposal process. In response, staff outside the unit contributed while managing other assigned duties, a Program Manager and Grants and Contract Specialist were hired to restore the unit to its three-employee configuration, the new employees received training on subrecipient monitoring policies and procedures, and a revised subrecipient site visit plan was developed and has begun being implemented. To strengthen internal controls, OVS has developed a revised site visit plan for the remaining VOCA-funded programs scheduled to receive site visits in 2025. April 15, 2026, is the anticipated date for OVS to complete the site visits. OVS has completed sending letters to the subrecipients operating the VOCA-funded programs. The letters request supporting documentation, which is programmatic and financial in nature, in accordance with OVS administrative policy and procedure. Also, the letters inform subrecipients that site visits will commence in accordance with a revised site visit plan.”
Subrecipient Monitoring Program Name: Temporary Assistance for Needy Families (TANF) (Assistance Listing 93.558) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTTANF and 2501CTTANF Background The Department of Social Services (DSS) is the designated single state agency to administer Temporary Assistance for Needy Families (TANF) in accordance with Title 45 U.S. Code of Federal Regulations (CFR) Part 205.100. Connecticut administers certain aspects of TANF through several state agencies including the Department of Children and Families (DCF). DSS and DCF have a memorandum of understanding (MOU) which specifies each agency's responsibilities for administering programs in the TANF State Plan. DSS claims the state's use of federal TANF funds for home and community-based services provided to DCF's TANF-eligible clients. DCF enters into agreements with these subrecipients and pays them quarterly advances. DCF makes payments to Youth Service Bureaus claimed under the TANF program. Criteria Title 2 CFR Part 200.332(g) requires the pass-through entity to verify that subrecipients met their audit requirements for the fiscal year. Condition Our review of subrecipient monitoring over ten subrecipients that received $6,672,958 in TANF funds disclosed that DCF did not complete four annual fiscal reviews to ensure that subrecipients met their audit requirements for the fiscal year. Two of the ten subrecipients and two of the four exceptions were Youth Service Bureaus. Further review disclosed that DCF lacked procedures to perform annual reviews for Youth Service Bureau subrecipients. Context During the fiscal year ended June 30, 2025, DSS claimed $52,557,463 in DCF expenditures for various home and community-based services provided to 132 subrecipients, including $3,785,630 in expenditures for 102 Youth Service Bureau subrecipients. The sample was not statistically valid. Questioned Costs $0 Effect DSS and DCF have limited assurance that federal funds were used for allowable activities. Cause DCF experienced staffing limitations and competing priorities. DCF lacked management oversight over Youth Service Bureau subrecipients. Prior Audit Finding We previously reported this as finding 2024-024 and in two prior audits. Recommendation The Department of Children and Families should develop procedures to monitor payments to Youth Service Bureaus and strengthen internal controls to ensure compliance with the federal regulations for monitoring subrecipients of the Temporary Assistance for Needy Families program. As the lead agency for TANF, the Department of Social Services should strengthen procedures to ensure that supporting state agencies fulfill their responsibilities in their memorandum of understanding and comply with all federal TANF requirements. Views of Responsible Officials Response provided by the Department of Children and Families: “DCF agrees with this finding and will improve its internal review process to include Youth Services Bureaus and capture all subrecipients' federal single audits.” Response provided by the Department of Social Services: “The Department agrees with this finding. As the lead agency for TANF, DSS will strengthen procedures by requiring DCF to complete and share activities that verify subrecipients meet their audit requirements each fiscal year. DSS worked with an outside agency to review and enhance its subrecipient monitoring procedures. The outcome of this collaboration included training for DSS staff on subrecipient monitoring requirements, communicating expectations to subrecipients about monitoring expectations, a standardized data request, and the creation of a subrecipient monitoring toolkit to be utilized by DSS and its partners.”
Subrecipient Monitoring Program Name: Low-Income Home Energy Assistance Program (LIHEAP) (Assistance Listing 93.568) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2023, 2024, and 2025 Federal Award Numbers: 2301CTLIEA, 2301CTLIEE, 2401CTLIEA, 2401CTLIEI, 2501CTLIEA, and 2501CTLIEI Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.332 provides that the pass-through entity shall monitor subrecipient activities as necessary to ensure that they comply with federal statutes, regulations, and the subaward’s terms and conditions and ensure that they achieve performance goals and objectives. This includes a review of a pass-through entity’s required financial and performance reports. Condition Our review of subrecipient monitoring over nine Low-Income Home Energy Assistance Program (LIHEAP) subrecipients disclosed that the Department of Social Services (DSS) did not conduct annual fiscal reviews for one subrecipient. Context During the fiscal year ended June 30, 2025, DSS provided nine subrecipients with $75,417,156 of LIHEAP funds to administer the program. Questioned Costs $0 Effect DSS has limited assurance that federal funds were used for allowable activities. Cause Low staffing levels hindered the department. DSS lacks proper subrecipient monitoring procedures. Prior Audit Finding We previously reported this as finding 2024-022 and in one prior audit. Recommendation The Department of Social Services should strengthen internal controls to ensure it complies with federal subrecipient monitoring requirements for the Low-Income Home Energy Assistance Program. Views of Responsible Officials “The Department agrees with this finding and is in the process of hiring an additional staff member to assist with subrecipient monitoring. The LIHEAP unit is developing collaboration and cross-training by incorporating program liaisons to monitor portions of the financial requirements which coincide with program fuel slip monitoring reviews. The Department is creating a financial review tool to ensure consistency in the review of data to document in the financial report output.”
Subrecipient Monitoring Program Name: HIV Care Formula Grants (Ryan White HIV/AIDS Program Part B) (Assistance Listing 93.917) Federal Award Agency: United States Department of Health and Human Services Award Year: Federal Fiscal Year 2024 Federal Award Numbers: 5 X07HA00022-33-00 and 6 X07HA00022-34-01 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.332(e) provides that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subrecipient used the subaward for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and ensure that they achieve performance goals. This includes reviewing financial and performance reports required by the pass-through entity. The Ryan White HIV/AIDS Program Part B Manual requires an annual on-site financial review of all subrecipients to ensure compliance with federal and state requirements and the terms and conditions of the department’s contract. Condition Our review of the Department of Public Health (DPH) monitoring procedures for six not-for-profit and one for-profit subrecipients disclosed that the department did not conduct annual on-site financial review visits for any of the six not-for-profit subrecipients. Context During the fiscal year ended June 30, 2024, DPH provided $4,262,325 to six not-for-profit subrecipients and $21,633,283 to a for-profit subrecipient for AIDS health care and support services. We selected all seven fiscal year 2024 subrecipients for review as DPH had not completed the monitoring site visits for fiscal year 2025 funds. During the fiscal year 2025, the department provided $13,216,793 to subrecipients. Questioned Costs $0 Effect DPH had reduced assurance that its subrecipients used federal funds for allowable activities. Cause The department did not complete the financial reviews for fiscal year 2024 because staff lacked proper training, which was necessary due to new federal compliance requirements and DPH’s recent implementation of new audit software. Prior Audit Finding We previously reported this as finding 2024-201 and in one prior audit. Recommendation The Department of Public Health should strengthen internal controls to ensure compliance with federal requirements for monitoring subrecipients of the Ryan White HIV/AIDS Program Part B. Views of Responsible Officials “We agree with this finding. With the implementation of the new auditing software, Management Assurance will create a comprehensive, trackable financial review program and will ensure the reviews are completed in accordance with Federal guidance. We anticipate having the software fully implemented and the financial review program operational by March 01, 2026; the financial reviewer will be trained on the software and the program requirements no later than May 01, 2026. The financial reviews will begin as soon as possible after the reviewer completes their training; we intend to have a completed financial review for all Ryan White regional leads by year-end 2026.”
Finding 2025-003 (Material Weakness) Program: Housing Opportunities for Persons with AIDS Federal Agency: United States Department of Housing and Urban Development (HUD) AL #: 14.241 Federal Award Identification Number and Year: Various – See SEFA Pass-through Entity: N/A Type of Compliance Finding: M) Subrecipient Monitoring Criteria Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition The City did not provide evidence supporting compliance with this requirement. Cause The City failed to 1) evaluate the results of subrecipient’s previous audits including whether or not the subrecipient received a single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward was audited as a major program; and 2) have the Subrecipient address the identified findings in the contract monitoring report according to the response timeframe outlined in the report; to ensure quality programming that benefits the clients. Effect The City may not be compliant with HUD, which could result in the City not receiving federal assistance or repayment of grant funds. Questioned Costs None Context N/A Is the finding a repeat finding No Recommendations We recommend the City ensure Subrecipients respond to all corrective action plans by the required timeframes outlined and ensure all subrecipients are monitored as stated in the Federal regulations and City’s policy. Views of Responsible Officials / Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization’s letterhead.
Assistance Listing Numbers: 21.027 Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Maricopa County Pass-Through Grantor Identifying Number: None Award Year: November 1, 2021 through September 30, 2026 Compliance Requirement: Subrecipient Monitoring Criteria: In accordance with 2 CFR 200.332 (e) & (g) - pass-through entities must monitor subrecipient activity through reviewing financial and performance reports, verifying that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. Condition: While AACHC performed several of the required subrecipient monitoring tasks, AACHC's system of internal controls did not include a process to monitor the subrecipients' financial and performance reports by verifying that subrecipients are audited if they meet the single audit criteria and ensure that subrecipients take corrective action on single audit findings. Questioned Costs: N/A Context: In a population of five subrecipients, we noted that for all five subrecipients, while AACHC performed several of the required subrecipient monitoring tasks, AACHC did not monitor subrecipient activity through reviewing financial and performance reports, verify that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. This is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly designed to include a process to review financial and performance reports, verifying that subrecipients are audited if the meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. Cause: AACHC was not aware of the requirements within the Uniform Guidance for pass-through entities to monitor subrecipient activity through reviewing financial and performance reports, verifying that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. Identification of Repeat Finding: Not a repeat finding. Recommendation: AACHC should update their subrecipient monitoring policies and procedures to specifically include a process to monitor subrecipient activity through reviewing financial and performance reports, verifying that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. We also recommend AACHC regularly attend trainings on the Uniform Guidance to ensure they are knowledgeable of the required compliance procedures. Views of Responsible Officials and Planned Corrective Actions: Management of AACHC concurs with the finding. See Corrective Action Plan.
Assistance Listing Numbers: 93.332 Program: Cooperative Agreement to Support Navigators in Federally-Facilitated Exchanges Federal Agency: Department of Health and Human Services Pass-Through Agencies: N/A Pass-Through Grantor Identifying Number: NN/A Award Year: August 27, 2021 through August 26, 2024; August 27, 2024 through August 26, 2027 Compliance Requirement: Subrecipient Monitoring Criteria: In accordance with 2 CFR 200.332 (e) & (g) - pass-through entities must monitor subrecipient activity through reviewing financial and performance reports, verifying that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. Condition: While AACHC performed several of the required subrecipient monitoring tasks, AACHC's system of internal controls did not include a process to monitor the subrecipients' financial and performance reports by verifying that subrecipients are audited if they meet the single audit criteria and ensure that subrecipients take corrective action on single audit findings. Questioned Costs: N/A Context: In a population of twelve subrecipients, we noted that for all twelve subrecipients, while AACHC performed several of the required subrecipient monitoring tasks, AACHC did not monitor subrecipient activity through reviewing financial and performance reports, verify that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. This is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly designed to include a process to review financial and performance reports, verifying that subrecipients are audited if the meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. Cause: AACHC was not aware of the requirements within the Uniform Guidance for pass-through entities to monitor subrecipient activity through reviewing financial and performance reports, verifying that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. Identification of Repeat Finding: Not a repeat finding. Recommendation: AACHC should update their subrecipient monitoring policies and procedures to specifically include a process to monitor subrecipient activity through reviewing financial and performance reports, verifying that subrecipients are audited if they meet the single audit criteria, and ensure that subrecipients take corrective action on single audit findings. We also recommend AACHC regularly attend trainings on the Uniform Guidance to ensure they are knowledgeable of the required compliance procedures. Views of Responsible Officials and Planned Corrective Actions: Management of AACHC concurs with the finding. See Corrective Action Plan.
2025-001 - Internal Control over Compliance and Compliance with Subrecipient Monitoring Requirements Information on the Federal Program: United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Fund Pass-Through Entity: Prince George’s Country Maryland Pass-Through Entity Number: 52-6000-998 Award Period: February 28, 2024 through June 30, 2025 Criteria– In accordance with §200.303(a), Internal Controls, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. In accordance with 2 CFR §180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with §180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under §180.135. 2 CFR §200.332(b), Requirements for pass-through entities, indicates that pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and that the subaward document includes the best available information provided within 2 CFR §200.332(b)(1). Condition – During our testing of the two subrecipients under this program, we noted that management did not determine whether the subrecipients were suspended or debarred prior to entering into the agreement with the subrecipients or when the subaward agreements were amended. Additionally, the agreements between The Community Foundation and the subrecipients did not contain certain key information, such as the assistance listing number, as required by 2 CFR §200.332(b)(1). Context – During our review of The Community Foundation’s compliance with the Uniform Guidance requirements, we noted that there were two subrecipients under the applicable federal program. Both subrecipients were selected for testing, resulting in a 100% examination rather than a sample-based approach. Upon identification of compliance errors, management subsequently verified the status of the subrecipients in the System for Award Management (“SAM”) to confirm that neither was suspended nor debarred. We reviewed supporting documentation from SAM and confirmed that both subrecipients were not suspended or debarred. Following the audit procedures, which identified missing data elements required by 2 CFR §200.332(b)(1), management issued communications to each subrecipient, providing the relevant information that had initially been omitted from the subaward agreements. Cause - The Community Foundation’s policies include requirements to determine whether vendors/subrecipients are suspended are debarred when working on Federal programs. The individuals executing the agreements between The Community Foundation and the two subrecipients did not properly follow the procurement policy with respect to checks for suspension and debarment. In addition, the individuals executing the agreements with the two subrecipients did not properly review the regulations and did not identify the need to include the information in 2 CFR §200.332(b)(1). Effect or Potential Effect - The lack of adherence to the established internal control policies and procedures can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements which could ultimately lead to disallowed costs for the major federal program. Questioned Costs - There are no questioned costs. Repeat Finding - This is not a repeat finding from prior year. Recommendation - We recommend that The Community Foundation ensure consistent adherence to its policies and procedures. Given that federal funding is not received on a recurring basis, certain policies and procedures may become outdated. We further recommend that, upon receipt of federal funding in the future, management designate an individual with appropriate knowledge and experience to review applicable federal regulations and update policies and procedures as necessary to maintain compliance. Views of Responsible Officials – Management agrees with the finding and has implemented corrective actions, including verifying subrecipients’ eligibility in SAM.gov before awarding or amending federal subawards, updating subaward templates to meet federal requirements, and revising procurement and cash management policies for compliance. The Controller will act as Compliance Coordinator for future federal funding, overseeing regulation review, staff training, and quarterly compliance checks, with any deficiencies reported to the CFO for prompt resolution. These measures aim to ensure ongoing adherence to federal grant requirements.
2024-001 Significant Deficiency in Internal Controls over Compliance and Compliance, Other Matter – Procurement (suspension and debarment) Agency: U.S. Department of the Interior Program(s) and Federal Award Listing Number(s): Partners for Fish and Wildlife ALN: 15.631 FAIN: FA22AC02756, FA23AC02476 New or Repeat: New Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Per 2 CFR Part 180, as referenced in 2 CFR Part 1400, for any contract expected to total $25,000 or more, a recipient of federal funds must confirm that the contractor is not suspended or debarred from receiving federal funds. Per 2 CFR 200.332, a pass-through entity must verify that the subrecipient is not suspended, debarred, or otherwise excluded from receiving federal funds in accordance with 2 CFR 180.300. Condition: SAWC was not able to provide supporting documentation indicating that it had verified that contractors and subrecipients were not suspended or debarred prior to contracting with, or making a subaward to, the entities. Cause: Internal controls were designed, but not sufficiently implemented to ensure that documentation of the check for suspension and debarment was retained. Effect: SAWC could have contracted with, or made a subaward to, an entity that was suspended or debarred. Context: We tested 100% of the procurement population. For three of the three contractors/subrecipients tested, we were not able to verify that SAWC confirmed the contractor/subrecipient was not suspended or debarred prior to entering into the transaction. Questioned costs: There are no questioned costs associated with this finding. Recommendation: We recommend SAWC consider either collecting a certification regarding suspension and debarment from contractors/subrecipients or adding a suspension and debarment clause or condition to contracts and subawards. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-001 Significant Deficiency in Internal Controls over Compliance and Compliance, Other Matter – Procurement (suspension and debarment) Agency: U.S. Department of the Interior Program(s) and Federal Award Listing Number(s): Partners for Fish and Wildlife ALN: 15.631 FAIN: FA22AC02756, FA23AC02476 New or Repeat: New Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Per 2 CFR Part 180, as referenced in 2 CFR Part 1400, for any contract expected to total $25,000 or more, a recipient of federal funds must confirm that the contractor is not suspended or debarred from receiving federal funds. Per 2 CFR 200.332, a pass-through entity must verify that the subrecipient is not suspended, debarred, or otherwise excluded from receiving federal funds in accordance with 2 CFR 180.300. Condition: SAWC was not able to provide supporting documentation indicating that it had verified that contractors and subrecipients were not suspended or debarred prior to contracting with, or making a subaward to, the entities. Cause: Internal controls were designed, but not sufficiently implemented to ensure that documentation of the check for suspension and debarment was retained. Effect: SAWC could have contracted with, or made a subaward to, an entity that was suspended or debarred. Context: We tested 100% of the procurement population. For three of the three contractors/subrecipients tested, we were not able to verify that SAWC confirmed the contractor/subrecipient was not suspended or debarred prior to entering into the transaction. Questioned costs: There are no questioned costs associated with this finding. Recommendation: We recommend SAWC consider either collecting a certification regarding suspension and debarment from contractors/subrecipients or adding a suspension and debarment clause or condition to contracts and subawards. View of responsible officials: Management concurs with this finding, see corrective action plan.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
Lack of Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Housing and Urban Development - Home Investment Partnerships Program (ALN 14.239); Direct award and Pass-through: Michigan State Housing Development Authority; All project numbers. Criteria. Under 2 CFR Part 200.332(e), the pass through-entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition. The County performed financial monitoring procedures during the year and obtained and reviewed subrecipient single audit reports from those subrecipients who were required to have single audits performed under 2 CFR 200 Subpart F. However, the County could not provide evidence that programmatic or performance monitoring to ensure that the stated goals and objectives of the subaward program were achieved during the year, and as such did not comply with all necessary subrecipient monitoring requirements during the year as required in 2 CFR Part 200.332(e). Cause. The County does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. The County did not follow all federal requirements for subrecipient monitoring and as a result has not completed all monitoring requirements for pass-through entities. Questioned Costs. None. Recommendation. We recommend that the County review its procedures for subrecipient monitoring to ensure compliance with Uniform Guidance. In the past, the County has had established procedures which included desk reviews and documented program monitoring of subrecipient programs, and it appears that not all of those procedures have remained in place due to staff turnover. The County should review, update, and implement procedures to ensure that those required elements of internal control are carried out by the responsible County department.
2024-001 Research and Development Cluster – Education Innovation and Research (formerly Investing in Innovation (i3) Fund – Validation Grants) Assistance Listing No. 84.411A Criteria: 2 CFR 200.332 notes, “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; …” Condition: For both subawards selected for testing, the identification of the contact information for the awarding agency was incorrect. The contact information was Education Analytics, Inc., the Organization’s grantor, but should have been Future Forward, Inc. Further, one of the two subawards selected for testing had information missing from the subaward including all requirements for the award to be used in accordance with Federal statutes, regulations and terms and conditions of the Federal award. We consider this condition to be an instance of noncompliance relating to the Subrecipient Monitoring compliance requirement. Statistical sampling was not used in making sample selections. Questioned Costs: N/A Cause and Effect: Without communication of the required information, subrecipients may overspend award amounts or incur unallowable expenses towards the grant as well as report the incorrect grantor on their schedule of expenditures of federal awards. Recommendation: We recommend the Organization evaluates policies and procedures to ensure all required information is communicated with the subrecipient. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
2024-002 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Internal controls and other compliance knowledge should provide adequate subrecipient monitoring under federal awards. Per 2 CFR 200.332(d), pass-through entities should "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." This would include site monitoring visits during the grant's period of performance. Condition The Organization provided funds to subrecipients under its direct award from the Department of Treasury. Payments to subrecipients are made on a reimbursement basis. Context During our subrecipient monitoring testing, we noted one of the three subrecipients tested did not receive a site visit during the grant agreement period. Per our discussion with management, the Organization was unable to schedule a monitoring visit during the grant agreement period. The Organization was also unable to provide sufficient documentation that supported adequate monitoring activities were in place during the grant agreement period. Cause The error was caused by the Organization's negligence to conduct any monitoring activity during the grant agreement period. Effect Unallowable activities or cost principles could be charged to the Department of Treasury. Repeat Finding No.Auditor's Recommendation It is recommended that the Organization reevaluates its internal controls over subrecipient monitoring to ensure that proper monitoring is occurring during the grant agreement period. The Organization should also consider who is responsible for the monitoring activity, and if necessary, assign those responsibilities to an employee who has a more flexible schedule that can accommodate the scheduled monitoring visits.
2024-002 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Internal controls and other compliance knowledge should provide adequate subrecipient monitoring under federal awards. Per 2 CFR 200.332(d), pass-through entities should "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." This would include site monitoring visits during the grant's period of performance. Condition The Organization provided funds to subrecipients under its direct award from the Department of Treasury. Payments to subrecipients are made on a reimbursement basis. Context During our subrecipient monitoring testing, we noted one of the three subrecipients tested did not receive a site visit during the grant agreement period. Per our discussion with management, the Organization was unable to schedule a monitoring visit during the grant agreement period. The Organization was also unable to provide sufficient documentation that supported adequate monitoring activities were in place during the grant agreement period. Cause The error was caused by the Organization's negligence to conduct any monitoring activity during the grant agreement period. Effect Unallowable activities or cost principles could be charged to the Department of Treasury. Repeat Finding No.Auditor's Recommendation It is recommended that the Organization reevaluates its internal controls over subrecipient monitoring to ensure that proper monitoring is occurring during the grant agreement period. The Organization should also consider who is responsible for the monitoring activity, and if necessary, assign those responsibilities to an employee who has a more flexible schedule that can accommodate the scheduled monitoring visits.
2024-002 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Internal controls and other compliance knowledge should provide adequate subrecipient monitoring under federal awards. Per 2 CFR 200.332(d), pass-through entities should "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." This would include site monitoring visits during the grant's period of performance. Condition The Organization provided funds to subrecipients under its direct award from the Department of Treasury. Payments to subrecipients are made on a reimbursement basis. Context During our subrecipient monitoring testing, we noted one of the three subrecipients tested did not receive a site visit during the grant agreement period. Per our discussion with management, the Organization was unable to schedule a monitoring visit during the grant agreement period. The Organization was also unable to provide sufficient documentation that supported adequate monitoring activities were in place during the grant agreement period. Cause The error was caused by the Organization's negligence to conduct any monitoring activity during the grant agreement period. Effect Unallowable activities or cost principles could be charged to the Department of Treasury. Repeat Finding No.Auditor's Recommendation It is recommended that the Organization reevaluates its internal controls over subrecipient monitoring to ensure that proper monitoring is occurring during the grant agreement period. The Organization should also consider who is responsible for the monitoring activity, and if necessary, assign those responsibilities to an employee who has a more flexible schedule that can accommodate the scheduled monitoring visits.
2024-002 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Internal controls and other compliance knowledge should provide adequate subrecipient monitoring under federal awards. Per 2 CFR 200.332(d), pass-through entities should "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." This would include site monitoring visits during the grant's period of performance. Condition The Organization provided funds to subrecipients under its direct award from the Department of Treasury. Payments to subrecipients are made on a reimbursement basis. Context During our subrecipient monitoring testing, we noted one of the three subrecipients tested did not receive a site visit during the grant agreement period. Per our discussion with management, the Organization was unable to schedule a monitoring visit during the grant agreement period. The Organization was also unable to provide sufficient documentation that supported adequate monitoring activities were in place during the grant agreement period. Cause The error was caused by the Organization's negligence to conduct any monitoring activity during the grant agreement period. Effect Unallowable activities or cost principles could be charged to the Department of Treasury. Repeat Finding No.Auditor's Recommendation It is recommended that the Organization reevaluates its internal controls over subrecipient monitoring to ensure that proper monitoring is occurring during the grant agreement period. The Organization should also consider who is responsible for the monitoring activity, and if necessary, assign those responsibilities to an employee who has a more flexible schedule that can accommodate the scheduled monitoring visits.
2024-002 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Criteria Internal controls and other compliance knowledge should provide adequate subrecipient monitoring under federal awards. Per 2 CFR 200.332(d), pass-through entities should "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." This would include site monitoring visits during the grant's period of performance. Condition The Organization provided funds to subrecipients under its direct award from the Department of Treasury. Payments to subrecipients are made on a reimbursement basis. Context During our subrecipient monitoring testing, we noted one of the three subrecipients tested did not receive a site visit during the grant agreement period. Per our discussion with management, the Organization was unable to schedule a monitoring visit during the grant agreement period. The Organization was also unable to provide sufficient documentation that supported adequate monitoring activities were in place during the grant agreement period. Cause The error was caused by the Organization's negligence to conduct any monitoring activity during the grant agreement period. Effect Unallowable activities or cost principles could be charged to the Department of Treasury. Repeat Finding No.Auditor's Recommendation It is recommended that the Organization reevaluates its internal controls over subrecipient monitoring to ensure that proper monitoring is occurring during the grant agreement period. The Organization should also consider who is responsible for the monitoring activity, and if necessary, assign those responsibilities to an employee who has a more flexible schedule that can accommodate the scheduled monitoring visits.
Subrecipient Monitoring Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.332 includes requirements such as evaluating the subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the award. Condition: The City did not have documentation of risk assessment procedures performed for two of the four subrecipients tested. Questioned Costs: None. Context: The City of Minneapolis has documented the subaward and subrecipient procedures that its staff are expected to follow. These procedures include the completion of a pre-award risk assessment form and for the form to be maintained in the contract file of the subrecipient. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City is not in compliance with federal regulations. Cause: City staff were not aware of the requirement to perform pre-award risk assessments with subrecipients. Recommendation: We recommend the City ensure that the City’s employees follow its procedures for completing risk assessments when contracting with subrecipients. View of Responsible Official: Concur
Criteria: 2 CFR 200.332 establishes requirements for pass-through entities. Included in these requirements is to monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The City did have procedures in place to monitor allowable costs and activities of its subrecipients. However, while conducting a review of expenditures through the monitoring of the Appalachia Community Grant (ACG), the Ohio Department of Development (ODOD), noted that a subrecipient of the City had made unallowable expenditures for the grant. This demonstrates a control weakness in the subrecipient monitoring controls conducted by the City. Context: The City, ODOD, and the subrecipient are working on a way to recover any questioned costs associated with this and these do not represent questioned costs of the City. Effect: There is a significant deficiency in the subrecipient monitoring controls of the City that could allow future unallowable costs or activities at subrecipients, if not improved. Recommendation: We recommend that the City implement stronger monitoring controls including vendor verification and review of invoices for the draw down requests that they receive from their subrecipients.
FINDING 2024-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County received an allocation of the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) from the U.S. Department of the Treasury to support its response and recovery from the novel coronavirus. A portion of the County's allocation was then used to subaward funds to another entity (i.e., the subrecipient) to carry out an eligible use. The subaward was provided to the subrecipient via two different subaward agreements. Both subaward agreements were selected for testing. The County, as the pass-through entity, is to clearly identify the subaward and the terms and conditions of the award in the agreement with the subrecipient. During review of the two subaward agreements, it was determined that the Assistance Listings Number (ALN) and Federal Award Identification Number (FAIN) were not included as required. Additionally, the County as the pass-through entity, is to monitor the activities of the subrecipient to ensure that the subaward is used for authorized purposes in compliance with federal statutes, regulations, and terms and conditions of the subaward and that performance goals are achieved. Part of the monitoring requirements include verifying the subrecipient received an audit as required so as to be able to issue management decisions on any findings, as applicable. The County did not have a process in place to obtain and review audits received by the subrecipient. Therefore, the County would not have been able to issue management decisions or ensure timely and appropriate action by the subrecipient. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: "(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); INDIANA STATE BOARD OF ACCOUNTS 14 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date . . . of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the 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 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 used charged) per § 200.414. . . . (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations." Cause The County did not have adequate processes or procedures in place to ensure all of the proper information about the grant was provided to the subrecipient and all required monitoring activities were being conducted. Effect Not providing award identification information to subrecipients could result in the subrecipient not properly reporting the grant on their Schedule of Expenditures of Federal Awards. Furthermore, due to the absence of policies and procedures to monitor the activities of subrecipients, subrecipients could be spending federal funds for unauthorized purposes without the County's knowledge. As such, the County cannot ensure proper accountability and compliance with the program requirements. INDIANA STATE BOARD OF ACCOUNTS 15 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County strengthen its system of internal controls to ensure that the County verifies that all subrecipients of federal awards receive an audit and that the County receives and reviews any audit reports of the subrecipients. Additionally, we recommended that the County strengthen its system of internal controls to ensure that subaward agreements include all required information that should be known to the subrecipient. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria or specific requirement: Per 2 CFR 200.303(a), the County must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the ”Standards for Internal Control in the Federal Government” issued by the Comptroller General of the Untied States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Under Uniform Grant Guidance, the County must: • Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain required information including but not limited to: Federal and subaward information, indirect cost rate, and the subrecipient’s unique entity identifier (UEI). (2 CFR 200.332 (b)) • Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring. (2 CFR 200.332 (c)) • Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. (2 CFR 200.332 (e)) • Verify that a subrecipient is audited as required by 2 CFR 200.501. (2 CFR 200.332 (g))Condition: Subaward agreement was expired and did not include all required information, nor did the subrecipient have the required UEI. Subaward requirements were not communicated to the subrecipient; therefore, monitoring activities were not effective. Documentation of subrecipient risk assessment or audit verification not available for audit.Questioned Costs: None noted.Context: Audit procedures included testing of the one subrecipient who received a subaward during the year. There were no other subrecipients.Cause: The County’s procedures were not sufficient to ensure the subawards were issued or monitored in compliance with Federal requirements. Internal controls did not prevent or detect the errors.Effect: Failure to properly document required contract information, perform the necessary risk assessments, and document the review of the subrecipient’s single audit may result in noncompliance with grant terms and conditions. Subrecipients may have incomplete Schedules of Expenditures of Federal Awards, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance.