Various Agencies Finding 2024 ¬– 015: ALN 10.565, 10.568, 10.569 – Food Distribution Cluster ALN 15.252 – Abandoned Mine Land Reclamation (AMLR) ALN 21.027 – COVID 19 – Coronavirus State and Local Fiscal Recovery Funds ALN 84.425C – COVID 19 – Education Stabilization Fund – GEER Fund ALN 84.425D – COVID 19 – Education Stabilization Fund – ESSER Fund ALN 84.425R – COVID 19 – Education Stabilization Fund – CRRSA EANS Program ALN 84.425U – COVID 19 – Education Stabilization Fund – ARP ESSER ALN 84.425V – COVID 19 – Education Stabilization Fund – ARP EANS Program ALN 84.425W – COVID 19 – Education Stabilization Fund – ARP ESSER HCY ALN 93.044, 93.045, 93.053 – Aging Cluster (including COVID-19) ALN 93.558 – Temporary Assistance for Needy Families ALN 93.667 – Social Services Block Grant A Material Weakness and Material Noncompliance Exist in the Commonwealth’s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2023-024) Federal Grant Number(s) and Year(s): 228PA100I1003 (6/13/2022 – 6/30/2025), 231PA445Q2204 (10/01/2022 – 9/30/2023), 231PA825Y8005 (10/01/2022 – 9/30/2023), 231PA825Y8105 (10/01/2022 – 9/30/2023), 241PA825Y8005 (10/01/2023 – 9/30/2024), 241PA825Y8105 (10/01/2023 – 9/30/2024), S18AF20004 (11/01/2017 – 10/31/2025), S19AF20004 (12/01/2018 – 11/30/2025), S21AF10015 (1/01/2021 – 12/31/2023), S22AF00017 (1/01/2022 – 12/31/2024), S23AF00002 (11/01/2022 – 10/31/2027), TN75GJE1S7G3 (3/03/2021 – 12/31/2024), S425W210039 (4/23/2021 – 9/30/2024), S425U210028 (3/24/2021– 9/30/2024), S425D210028 (1/05/2021 – 9/30/2024), S425C200013 (5/18/2020 – 4/01/2024), S425R210037 (3/13/2020 – 9/30/2024), S425V210037 (11/16/2021 – 9/30/2024), S425C210013 (3/13/2020 – 9/30/2024), 2101PACMC6 (4/01/2021 – 9/30/2024), 2101PAHDC6 (4/01/2021 – 9/30/2024), 2101PAPHC6 (4/01/2021 – 9/30/2024), 2101PASSC6 (4/01/2021 – 9/30/2024), 2201PAOASS (10/01/2021 – 9/30/2023), 2201PASTPH (1/01/2022 – 9/30/2024), 2301PAOACM (10/01/2022 – 9/30/2024), 2301PAOAHD (10/01/2022 – 9/30/2024), 2301PAOANS (10/01/2022 – 9/30/2024), 2301PAOASS (10/01/2022 – 9/30/2024), 2401PAOACM (10/01/2023 – 9/30/2025), 2401PAOAHD (10/01/2023 – 9/30/2025), 2401PAOANS (10/01/2023 – 9/30/2025), 2401PAOASS (10/01/2023 – 9/30/2025), 2101PATANF (10/01/2020 – 9/30/2021), 2201PATANF (10/01/2021 – 9/30/2022), 2301PATANF (10/01/2022 – 9/30/2023), 2401PATANF (10/01/2023 – 9/30/2024), 2301PASOSR (10/01/2022 – 9/30/2024), 2401PASOSR (10/01/2023 – 9/30/2025), 2301PATANF (10/01/2022 – 9/30/2024), 2401PATANF (10/01/2023 – 9/30/2025) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters for Abandoned Mine Land Reclamation (AMLR), Temporary Assistance for Needy Families, Coronavirus State and Local Fiscal Recovery Funds, and Social Services Block Grant Material Weakness in Internal Control over Compliance, Material Noncompliance for Food Distribution Cluster, Education Stabilization Fund, and Aging Cluster Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget’s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse’s (FAC) Acceptance date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance Finding 2024 ¬– 015: (continued) audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2024 audit of the Commonwealth’s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth’s fiscal year ended June 30, 2023 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2024. We also evaluated the Commonwealth’s review of 45 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies’ tracking lists during the fiscal year ended June 30, 2024 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies’ review of subrecipient audit reports: • Pennsylvania Department of Aging (PDOA): Our testing disclosed that PDOA did not have procedures in place to track audit reports including having an audit tracking list. The time period for making a management decision on findings was approximately 17.6 months to over 18 months after the FAC Acceptance date for two out of two audit reports with findings. There was also a delay in PDOA’s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. • Department of Agriculture (PDA): Our testing disclosed that PDA did not have procedures in place to track audit reports including having an audit tracking list. The time period for making a management decision on findings was approximately 8.7 months to over 16 months after the FAC Acceptance date for four out of four audit reports with findings. • Department of Education (PDE): The time period for making a management decision on findings was approximately 7.8 months to over 12 months after the FAC Acceptance date for seven out of 22 audit reports with findings. There were additional audit reports with findings listed on PDE’s audit tracking list where management decisions were not made timely. • Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 11.6 months to over 12 months after the FAC Acceptance date for two out of two audit reports with findings. Our testing disclosed for the two late audit reports, DEP made management decisions timely. However, DEP did not notify the subrecipients of the management decisions within the required six month time period after the audit reports FAC Acceptance date. • Department of Human Services (DHS): The time period for making a management decision on findings was approximately 7.2 months after the FAC Acceptance date for one out of two audit reports with findings. Our testing disclosed for the one late audit report DHS made a management decision timely. However, DHS did not notify the subrecipient of the management decision within the required six month time period after the audit reports FAC Acceptance date. Criteria: 2 CFR §200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: Finding 2024 ¬– 015: (continued) (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient’s audit, on-site review, 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 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR §200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. 2 CFR §200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR §200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in §200.339 [Remedies for noncompliance]. 2 CFR §200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in §200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. Finding 2024 ¬– 015: (continued) (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended – Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program… (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth’s reliance on an acceptable audit and prompt resolution as evidence of the recipient’s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Finding 2024 ¬– 015: (continued) Management Directive 325.09, Amended – Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (2) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (5) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR §200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (6) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended – Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office’s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, and untimely review of the SEFA or alternate procedures be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. PDOA Response: PDOA agrees with the finding. PDA Response: PDA agrees with the finding. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. Finding 2024 ¬– 015: (continued) DHS Response: DHS agrees that there was an exception where human error caused a management decision on one single audit report to be issued untimely; in this instance, the decision itself was made timely but was not communicated in a timely manner. DHS disagrees that an isolated incident due to human error signifies a weakness in internal controls. This was not a systemic issue and therefore should not have been considered a significant deficiency in internal controls, and DHS should not have been included in this finding. Auditors’ Conclusion: The agency responses from PDOA, PDA, PDE, and DEP indicate agreement with the finding. DHS agrees that an error occurred resulting in untimely submission of one management decision, DHS disagrees that the error represents a significant deficiency. We acknowledge the error occurred due to an oversight and is not a systemic error, however, the error resulted in noncompliance with one of two audit reports that required timely management decisions. We will evaluate corrective action in the subsequent audit. The finding remains as stated. Questioned Costs: The amount of questioned costs cannot be determined.
Various Agencies Finding 2024 –¬ 014: ALN 10.565, 10.568, 10.569 – Food Distribution Cluster ALN 93.044, 93.045, 93.053 – Aging Cluster (including COVID-19) ALN 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases (including COVID-19) ALN 93.558 – Temporary Assistance for Needy Families ALN 93.667 – Social Services Block Grant ALN 93.788 – Opioid STR State Agencies Did Not Identify the Federal Award Information and Applicable Requirements at the Time of the Subaward and Did Not Evaluate Each Subrecipient’s Risk of Noncompliance as Required by the Uniform Grant Guidance (A Similar Condition Was Noted in Prior Year Finding 2023-023) Federal Grant Number(s) and Year(s): 231PA825Y8005 (10/01/2022 – 9/30/2023), 231PA825Y8105 (10/01/2022 – 9/30/2023), 231PA445Q2204 (10/01/2022 – 9/30/2023), 241PA825Y8005 (10/01/2023 – 9/30/2024), 241PA825Y8105 (10/01/2023 – 9/30/2024), 228PA100I1003 (6/13/2022 – 6/30/2025), 238PA000I1003 (5/25/2023 – 6/30/2025), 2101PACMC6 (4/01/2021 – 9/30/2024), 2101PAHDC6 (4/01/2021 – 9/30/2024), 2101PAPHC6 (4/01/2021 – 9/30/2024), 2101PASSC6 (4/01/2021 – 9/30/2024), 2201PAOASS (10/01/2021 – 9/30/2023), 2201PASTPH (1/01/2022 – 9/30/2024), 2301PAOACM (10/01/2022 – 9/30/2024), 2301PAOAHD (10/01/2022 – 9/30/2024), 2301PAOANS (10/01/2022 – 9/30/2024), 2301PAOASS (10/01/2022 – 9/30/2024), 2401PAOACM (10/01/2023 – 9/30/2025), 2401PAOAHD (10/01/2023 – 9/30/2025), 2401PAOANS (10/01/2023 – 9/30/2025), 2401PAOASS (10/01/2023 – 9/30/2025), NU50CK000527 (8/01/2019 – 7/31/2026), 2401PATANF (10/01/2023 – 9/30/2024), 2301PATANF (10/01/2022 – 9/30/2023), 2201PATANF (10/01/2021-9/30/2022), 2101PATANF (10/01/2020 – 9/30/2021), 2301PASOSR (10/01/2022 – 9/30/2024), 2401PASOSR (10/01/2023 – 9/30/2025), H79TI083297 (9/30/2021 – 9/29/2023), H79TI085783 (9/30/2022 – 9/29/2024) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Compliance Requirement: Subrecipient Monitoring Condition: The Uniform Guidance in 2 CFR Section 200 applies to the major programs listed above for the fiscal year ended June 30, 2024. Our testing disclosed that the Pennsylvania Department of Human Services (DHS), the Pennsylvania Department of Drug and Alcohol Programs (DDAP), and the Pennsylvania Department of Labor and Industry (L&I) did not identify the federal award information and applicable requirements in subrecipient award documents. Additionally, the Pennsylvania Department of Agriculture (PDA), Pennsylvania Department of Aging (PDOA), Pennsylvania Department of Health (DOH), and DHS did not adequately evaluate each subrecipient’s risk of noncompliance for the purpose of determining the appropriate subrecipient monitoring related to the subaward. This represents an internal control weakness which could cause subrecipients to be improperly informed of federal award information and may result in inadequate monitoring by the state agencies. Also, it could cause the omission or improper identification of program expenditures on subrecipients’ Schedules of Expenditures of Federal Awards (SEFAs). The following chart shows which federal award information required by 2 CFR Section 200 was omitted (as indicated by “No”) from the subrecipient award documents at the time of the subaward and which major programs did not have a state agency evaluation of each subrecipient’s risk of noncompliance. Finding 2024 –¬ 014: (continued) SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE (The cells with a hyphen in the table indicate that the federal award information was included in the subrecipient award documents or was not applicable for the respective major program.) Criteria: 2 CFR Section 200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: Finding 2024 –¬ 014: (continued) (1) Federal Award Identification. (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal Award date in section 200.1) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (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; (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; (6) Appropriate terms and conditions concerning closeout of the subaward. (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F [Audit Requirements] of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency) Management Directive 325.12, Amended – Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office’s Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should identify, analyze, and respond to risks related to achieving the defined objectives. Management should identify, analyze, and respond to significant changes that could impact the internal control system. Cause: In general, DHS’s, L&I’s, and DDAP’s processes for subrecipient award monitoring did not identify the omission of required elements from the grant awards. In addition, the risk assessments performed by PDA, PDOA, DOH, and DHS were not properly documented or not performed. Effect: Excluding the 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 SEFAs in their Single Audit reports submitted to the Commonwealth, and federal funds may not be properly audited at the subrecipient level in accordance with the Single Audit Act and Uniform Guidance. Not evaluating each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward may result in subrecipients using the subaward for unauthorized purposes or in violation of the terms and conditions of the subaward, and state agency monitoring would not detect this noncompliance and ensure it is corrected in a timely manner. Finding 2024 –¬ 014: (continued) Recommendation: DHS, L&I, and DDAP should develop policies and reporting mechanisms to ensure all required federal award information is disseminated to all subrecipients at the time of the subaward to ensure subrecipient compliance with the Uniform Guidance in 2 CFR Section 200 and other applicable federal regulations. In addition, DHS, DDAP, and L&I should correspond with applicable subrecipients to ensure they are aware of the correct federal award information and review applicable subaward documents prior to issuance to ensure federal information is complete and accurate. PDA, PDOA, DOH, and DHS should implement procedures to adequately document their evaluation of each subrecipient’s risk of noncompliance as cited in 2 CFR Section 200.332 for purposes of determining the appropriate subrecipient monitoring related to the subaward. DHS Response: DHS agrees with the finding. DOH Response: DOH agrees with the finding. PDA Response: PDA agrees with the finding. PDOA Response: PDOA agrees with the finding. DDAP Response: DDAP agrees with the concern indicated in this finding regarding not identifying the federal award information and applicable requirements in subrecipient award documents. The Department contracts with 47 Single County Authorities (SCAs) through 5-year grant agreements. These grant agreements may not have all of the required federal award information pursuant to 2 CFR 200.332 when the agreement is executed. DDAP understands the need to develop policies to ensure all required federal award information is disseminated to all subrecipients. Going forward, the Department will send a separate notification to all subrecipients once all federal award information has been identified to ensure subrecipient compliance with the Uniform Guidance in 2 CFR Section 200 and other applicable federal regulations. L&I Response: L&I considered the required elements outlined in 2 CFR Section 200.332 when designing the template for its subaward documents. The template included a specific section to list the Federal Awarding Agency; however, upon execution of the TANF subaward documents, L&I inadvertently entered incorrect data into this field. The result was that while a Federal Agency was listed in the contract, it was not the Federal Awarding Agency that provided the TANF funding. Upon being made aware of the error, L&I immediately corrected and disseminated the corrected information to the sub-recipients through the Commonwealth Workforce Development System. L&I agrees that at the time of award the name of the Federal Awarding Agency that provided the TANF funding was not included in the subaward documents. Questioned Costs: The amount of questioned costs cannot be determined.
Various Agencies Finding 2024 ¬– 015: ALN 10.565, 10.568, 10.569 – Food Distribution Cluster ALN 15.252 – Abandoned Mine Land Reclamation (AMLR) ALN 21.027 – COVID 19 – Coronavirus State and Local Fiscal Recovery Funds ALN 84.425C – COVID 19 – Education Stabilization Fund – GEER Fund ALN 84.425D – COVID 19 – Education Stabilization Fund – ESSER Fund ALN 84.425R – COVID 19 – Education Stabilization Fund – CRRSA EANS Program ALN 84.425U – COVID 19 – Education Stabilization Fund – ARP ESSER ALN 84.425V – COVID 19 – Education Stabilization Fund – ARP EANS Program ALN 84.425W – COVID 19 – Education Stabilization Fund – ARP ESSER HCY ALN 93.044, 93.045, 93.053 – Aging Cluster (including COVID-19) ALN 93.558 – Temporary Assistance for Needy Families ALN 93.667 – Social Services Block Grant A Material Weakness and Material Noncompliance Exist in the Commonwealth’s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2023-024) Federal Grant Number(s) and Year(s): 228PA100I1003 (6/13/2022 – 6/30/2025), 231PA445Q2204 (10/01/2022 – 9/30/2023), 231PA825Y8005 (10/01/2022 – 9/30/2023), 231PA825Y8105 (10/01/2022 – 9/30/2023), 241PA825Y8005 (10/01/2023 – 9/30/2024), 241PA825Y8105 (10/01/2023 – 9/30/2024), S18AF20004 (11/01/2017 – 10/31/2025), S19AF20004 (12/01/2018 – 11/30/2025), S21AF10015 (1/01/2021 – 12/31/2023), S22AF00017 (1/01/2022 – 12/31/2024), S23AF00002 (11/01/2022 – 10/31/2027), TN75GJE1S7G3 (3/03/2021 – 12/31/2024), S425W210039 (4/23/2021 – 9/30/2024), S425U210028 (3/24/2021– 9/30/2024), S425D210028 (1/05/2021 – 9/30/2024), S425C200013 (5/18/2020 – 4/01/2024), S425R210037 (3/13/2020 – 9/30/2024), S425V210037 (11/16/2021 – 9/30/2024), S425C210013 (3/13/2020 – 9/30/2024), 2101PACMC6 (4/01/2021 – 9/30/2024), 2101PAHDC6 (4/01/2021 – 9/30/2024), 2101PAPHC6 (4/01/2021 – 9/30/2024), 2101PASSC6 (4/01/2021 – 9/30/2024), 2201PAOASS (10/01/2021 – 9/30/2023), 2201PASTPH (1/01/2022 – 9/30/2024), 2301PAOACM (10/01/2022 – 9/30/2024), 2301PAOAHD (10/01/2022 – 9/30/2024), 2301PAOANS (10/01/2022 – 9/30/2024), 2301PAOASS (10/01/2022 – 9/30/2024), 2401PAOACM (10/01/2023 – 9/30/2025), 2401PAOAHD (10/01/2023 – 9/30/2025), 2401PAOANS (10/01/2023 – 9/30/2025), 2401PAOASS (10/01/2023 – 9/30/2025), 2101PATANF (10/01/2020 – 9/30/2021), 2201PATANF (10/01/2021 – 9/30/2022), 2301PATANF (10/01/2022 – 9/30/2023), 2401PATANF (10/01/2023 – 9/30/2024), 2301PASOSR (10/01/2022 – 9/30/2024), 2401PASOSR (10/01/2023 – 9/30/2025), 2301PATANF (10/01/2022 – 9/30/2024), 2401PATANF (10/01/2023 – 9/30/2025) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters for Abandoned Mine Land Reclamation (AMLR), Temporary Assistance for Needy Families, Coronavirus State and Local Fiscal Recovery Funds, and Social Services Block Grant Material Weakness in Internal Control over Compliance, Material Noncompliance for Food Distribution Cluster, Education Stabilization Fund, and Aging Cluster Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget’s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse’s (FAC) Acceptance date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance Finding 2024 ¬– 015: (continued) audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2024 audit of the Commonwealth’s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth’s fiscal year ended June 30, 2023 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2024. We also evaluated the Commonwealth’s review of 45 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies’ tracking lists during the fiscal year ended June 30, 2024 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies’ review of subrecipient audit reports: • Pennsylvania Department of Aging (PDOA): Our testing disclosed that PDOA did not have procedures in place to track audit reports including having an audit tracking list. The time period for making a management decision on findings was approximately 17.6 months to over 18 months after the FAC Acceptance date for two out of two audit reports with findings. There was also a delay in PDOA’s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. • Department of Agriculture (PDA): Our testing disclosed that PDA did not have procedures in place to track audit reports including having an audit tracking list. The time period for making a management decision on findings was approximately 8.7 months to over 16 months after the FAC Acceptance date for four out of four audit reports with findings. • Department of Education (PDE): The time period for making a management decision on findings was approximately 7.8 months to over 12 months after the FAC Acceptance date for seven out of 22 audit reports with findings. There were additional audit reports with findings listed on PDE’s audit tracking list where management decisions were not made timely. • Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 11.6 months to over 12 months after the FAC Acceptance date for two out of two audit reports with findings. Our testing disclosed for the two late audit reports, DEP made management decisions timely. However, DEP did not notify the subrecipients of the management decisions within the required six month time period after the audit reports FAC Acceptance date. • Department of Human Services (DHS): The time period for making a management decision on findings was approximately 7.2 months after the FAC Acceptance date for one out of two audit reports with findings. Our testing disclosed for the one late audit report DHS made a management decision timely. However, DHS did not notify the subrecipient of the management decision within the required six month time period after the audit reports FAC Acceptance date. Criteria: 2 CFR §200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: Finding 2024 ¬– 015: (continued) (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient’s audit, on-site review, 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 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR §200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. 2 CFR §200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR §200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in §200.339 [Remedies for noncompliance]. 2 CFR §200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in §200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. Finding 2024 ¬– 015: (continued) (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended – Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program… (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth’s reliance on an acceptable audit and prompt resolution as evidence of the recipient’s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Finding 2024 ¬– 015: (continued) Management Directive 325.09, Amended – Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (2) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (5) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR §200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (6) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended – Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office’s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, and untimely review of the SEFA or alternate procedures be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. PDOA Response: PDOA agrees with the finding. PDA Response: PDA agrees with the finding. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. Finding 2024 ¬– 015: (continued) DHS Response: DHS agrees that there was an exception where human error caused a management decision on one single audit report to be issued untimely; in this instance, the decision itself was made timely but was not communicated in a timely manner. DHS disagrees that an isolated incident due to human error signifies a weakness in internal controls. This was not a systemic issue and therefore should not have been considered a significant deficiency in internal controls, and DHS should not have been included in this finding. Auditors’ Conclusion: The agency responses from PDOA, PDA, PDE, and DEP indicate agreement with the finding. DHS agrees that an error occurred resulting in untimely submission of one management decision, DHS disagrees that the error represents a significant deficiency. We acknowledge the error occurred due to an oversight and is not a systemic error, however, the error resulted in noncompliance with one of two audit reports that required timely management decisions. We will evaluate corrective action in the subsequent audit. The finding remains as stated. Questioned Costs: The amount of questioned costs cannot be determined.
Various Agencies Finding 2024 –¬ 014: ALN 10.565, 10.568, 10.569 – Food Distribution Cluster ALN 93.044, 93.045, 93.053 – Aging Cluster (including COVID-19) ALN 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases (including COVID-19) ALN 93.558 – Temporary Assistance for Needy Families ALN 93.667 – Social Services Block Grant ALN 93.788 – Opioid STR State Agencies Did Not Identify the Federal Award Information and Applicable Requirements at the Time of the Subaward and Did Not Evaluate Each Subrecipient’s Risk of Noncompliance as Required by the Uniform Grant Guidance (A Similar Condition Was Noted in Prior Year Finding 2023-023) Federal Grant Number(s) and Year(s): 231PA825Y8005 (10/01/2022 – 9/30/2023), 231PA825Y8105 (10/01/2022 – 9/30/2023), 231PA445Q2204 (10/01/2022 – 9/30/2023), 241PA825Y8005 (10/01/2023 – 9/30/2024), 241PA825Y8105 (10/01/2023 – 9/30/2024), 228PA100I1003 (6/13/2022 – 6/30/2025), 238PA000I1003 (5/25/2023 – 6/30/2025), 2101PACMC6 (4/01/2021 – 9/30/2024), 2101PAHDC6 (4/01/2021 – 9/30/2024), 2101PAPHC6 (4/01/2021 – 9/30/2024), 2101PASSC6 (4/01/2021 – 9/30/2024), 2201PAOASS (10/01/2021 – 9/30/2023), 2201PASTPH (1/01/2022 – 9/30/2024), 2301PAOACM (10/01/2022 – 9/30/2024), 2301PAOAHD (10/01/2022 – 9/30/2024), 2301PAOANS (10/01/2022 – 9/30/2024), 2301PAOASS (10/01/2022 – 9/30/2024), 2401PAOACM (10/01/2023 – 9/30/2025), 2401PAOAHD (10/01/2023 – 9/30/2025), 2401PAOANS (10/01/2023 – 9/30/2025), 2401PAOASS (10/01/2023 – 9/30/2025), NU50CK000527 (8/01/2019 – 7/31/2026), 2401PATANF (10/01/2023 – 9/30/2024), 2301PATANF (10/01/2022 – 9/30/2023), 2201PATANF (10/01/2021-9/30/2022), 2101PATANF (10/01/2020 – 9/30/2021), 2301PASOSR (10/01/2022 – 9/30/2024), 2401PASOSR (10/01/2023 – 9/30/2025), H79TI083297 (9/30/2021 – 9/29/2023), H79TI085783 (9/30/2022 – 9/29/2024) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Compliance Requirement: Subrecipient Monitoring Condition: The Uniform Guidance in 2 CFR Section 200 applies to the major programs listed above for the fiscal year ended June 30, 2024. Our testing disclosed that the Pennsylvania Department of Human Services (DHS), the Pennsylvania Department of Drug and Alcohol Programs (DDAP), and the Pennsylvania Department of Labor and Industry (L&I) did not identify the federal award information and applicable requirements in subrecipient award documents. Additionally, the Pennsylvania Department of Agriculture (PDA), Pennsylvania Department of Aging (PDOA), Pennsylvania Department of Health (DOH), and DHS did not adequately evaluate each subrecipient’s risk of noncompliance for the purpose of determining the appropriate subrecipient monitoring related to the subaward. This represents an internal control weakness which could cause subrecipients to be improperly informed of federal award information and may result in inadequate monitoring by the state agencies. Also, it could cause the omission or improper identification of program expenditures on subrecipients’ Schedules of Expenditures of Federal Awards (SEFAs). The following chart shows which federal award information required by 2 CFR Section 200 was omitted (as indicated by “No”) from the subrecipient award documents at the time of the subaward and which major programs did not have a state agency evaluation of each subrecipient’s risk of noncompliance. Finding 2024 –¬ 014: (continued) SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE (The cells with a hyphen in the table indicate that the federal award information was included in the subrecipient award documents or was not applicable for the respective major program.) Criteria: 2 CFR Section 200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: Finding 2024 –¬ 014: (continued) (1) Federal Award Identification. (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal Award date in section 200.1) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (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; (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; (6) Appropriate terms and conditions concerning closeout of the subaward. (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F [Audit Requirements] of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency) Management Directive 325.12, Amended – Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office’s Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should identify, analyze, and respond to risks related to achieving the defined objectives. Management should identify, analyze, and respond to significant changes that could impact the internal control system. Cause: In general, DHS’s, L&I’s, and DDAP’s processes for subrecipient award monitoring did not identify the omission of required elements from the grant awards. In addition, the risk assessments performed by PDA, PDOA, DOH, and DHS were not properly documented or not performed. Effect: Excluding the 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 SEFAs in their Single Audit reports submitted to the Commonwealth, and federal funds may not be properly audited at the subrecipient level in accordance with the Single Audit Act and Uniform Guidance. Not evaluating each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward may result in subrecipients using the subaward for unauthorized purposes or in violation of the terms and conditions of the subaward, and state agency monitoring would not detect this noncompliance and ensure it is corrected in a timely manner. Finding 2024 –¬ 014: (continued) Recommendation: DHS, L&I, and DDAP should develop policies and reporting mechanisms to ensure all required federal award information is disseminated to all subrecipients at the time of the subaward to ensure subrecipient compliance with the Uniform Guidance in 2 CFR Section 200 and other applicable federal regulations. In addition, DHS, DDAP, and L&I should correspond with applicable subrecipients to ensure they are aware of the correct federal award information and review applicable subaward documents prior to issuance to ensure federal information is complete and accurate. PDA, PDOA, DOH, and DHS should implement procedures to adequately document their evaluation of each subrecipient’s risk of noncompliance as cited in 2 CFR Section 200.332 for purposes of determining the appropriate subrecipient monitoring related to the subaward. DHS Response: DHS agrees with the finding. DOH Response: DOH agrees with the finding. PDA Response: PDA agrees with the finding. PDOA Response: PDOA agrees with the finding. DDAP Response: DDAP agrees with the concern indicated in this finding regarding not identifying the federal award information and applicable requirements in subrecipient award documents. The Department contracts with 47 Single County Authorities (SCAs) through 5-year grant agreements. These grant agreements may not have all of the required federal award information pursuant to 2 CFR 200.332 when the agreement is executed. DDAP understands the need to develop policies to ensure all required federal award information is disseminated to all subrecipients. Going forward, the Department will send a separate notification to all subrecipients once all federal award information has been identified to ensure subrecipient compliance with the Uniform Guidance in 2 CFR Section 200 and other applicable federal regulations. L&I Response: L&I considered the required elements outlined in 2 CFR Section 200.332 when designing the template for its subaward documents. The template included a specific section to list the Federal Awarding Agency; however, upon execution of the TANF subaward documents, L&I inadvertently entered incorrect data into this field. The result was that while a Federal Agency was listed in the contract, it was not the Federal Awarding Agency that provided the TANF funding. Upon being made aware of the error, L&I immediately corrected and disseminated the corrected information to the sub-recipients through the Commonwealth Workforce Development System. L&I agrees that at the time of award the name of the Federal Awarding Agency that provided the TANF funding was not included in the subaward documents. Questioned Costs: The amount of questioned costs cannot be determined.
CONDITION The State Treasurer's Office did not make subrecipients aware of all required grant award information for the Mineral Leasing Act. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were included in the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT There were 40 awards during the audit period of 7/1/2022 - 6/30/2024. There were 8 awards tested with 8 errors noted. The following criteria were missing: - (ii) Subrecipient's unique entity identifier; - (iii) Federal Award Identification Number (FAIN); - (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. - (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the pass-through entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimus indirect cost rate. (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with § 200.405(d). - (6) Appropriate terms and conditions concerning closeout of the subaward. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the State Treasurer's Office update its grant award templates to ensure that subrecipients are made award of all required grant award information. STATE TREASURER’S OFFICE RESPONSE The Office of the State Treasurer does agree with finding that our grant award template did not make subrecipients aware of all required grant award information for the Mineral Leasing Act as required. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION The Department of Public Instruction did not make subrecipients aware of all required grant award information for the Special Education Cluster, Title 1, Supporting Effective Instruction, Child and Adult Care Food Program, and Education Stabilization Fund. CRITERIA 2 CFR 200.332 requires pass-through entities to communicate specific required information to subrecipients. Required information includes: - Subrecipients name (Must match the name associated with its unique entity identifier) - Subrecipients unique entity identifier - Federal award identification number (FAIN) - Federal award date - Subaward period of performance start and end date - Amount of Federal funds obligated in the subaward - Total amount of Federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation - Total amount of the Federal award committed to the subrecipient by the pass-through entity - Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) - Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity - 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 - Identification of whether the Federal award is for research and development - Indirect cost rate for the Federal award (including if the de minimis rate is used) - All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and condition of the Federal award 2 CFR 200.303 requires non-Federal entities, in part, to 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. CAUSE Not all grant agreement requirements were entered into the grant award template. EFFECT Subrecipients may not have been aware of all necessary grant information and requirements. CONTEXT The number of grant agreements during the audit period is listed below. A. Special Education Cluster - 134 awards - 14 tested with 10 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity B. Title I program - 276 awards - 25 tested with 16 errors noted The following criteria were missing or incorrect: - Total amount of the Federal award committed to the subrecipient by the pass-through entity C. Supporting Effective Instruction - 278 awards - 25 tested with 21 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - Federal award date - Federal award Identification Number (FAIN) - Total amount of the Federal award committed to the subrecipient by the pass-through entity D. Child and Adult Care Food Program - 134 awards - 14 tested with 2 errors noted The following criteria were missing or incorrect: - Subrecipients unique entity identifier - 1 subrecipient did not have a grant contract E. Education Stabilization Fund - 641 awards - 40 tested with 10 errors noted The following criteria were missing or incorrect: - Subrecipient name (1 sample did not have the correct subrecipient name on the grant award) - Subrecipients unique entity identifier (2 did not match the Subrecipient name on grant award) - Federal award date (8 awards did not have this) - Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity (6 awards did not include Name of Federal Awarding Agency (Dept of Education) on grant award) Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-024 was reported in the immediate prior year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Instruction update its grant award templates to ensure that subrecipients are made award of all required grant award information DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION Career and Technical Education is not verifying every subrecipient is audited and reviewing audit findings as required by 2 CFR 200, Subpart F. Subsequently, by not verifying every subrecipient is audited, Career and Technical Education is not ensuring their responsibilities for issuing management decisions are performed, if any findings are identified in the audits. CRITERIA All pass-through entities must: • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and terms and conditions of the subaward, and that the subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include, in part, following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward; issuing a management decision for applicable audit findings pertaining only to the federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521; and ensuring audit findings specifically related to the subaward are resolved (2 CFR 200.332(d)). • Verify that every subrecipient is audited as required by 2 CFR 200, Subpart F, when it is expected that the subrecipient's Federal award expended during the respective fiscal year equaled or exceeded the $750,000 threshold set forth in 2 CFR 200.501 (2 CFR 200.332(f). Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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. CAUSE Career and Technical Education has not established processes to identify which subrecipients are subject to required audits or to obtain and review Uniform Guidance Single Audit reports. In addition, Career and Technical Education has not developed a tracking system to ensure timely submission of required audit reports and to ensure timely and appropriate corrective action is taken on all deficiencies. EFFECT Subrecipient noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, including audit findings pertaining to the Federal award, may go undetected and unresolved. CONTEXT Career and Technical Education awarded subawards, individually up to $10 million, to 13 subrecipients totaling $74.6 million for 19 different multi-purpose community facility projects. Career and Technical Education has had prior experience with these subrecipients. Projects were included in the state’s program plan that was reviewed and approved by U.S. Treasury. Career and Technical Education imposed specific subaward conditions upon each subrecipient requiring payments as reimbursements rather than advance payments. Career and Technical Education performs ongoing monitoring procedures through review and approval of subrecipient requests for reimbursements, which includes reviewing invoices and contractor progress billings for unallowable expenses, prior to disbursing Capital Project Funds. Lastly, Career and Technical Education conducts annual on-site visits of started projects until completed to visually inspect projects are being completed as planned. Where sampling was performed, the audit used a non-statistical sampling method. This finding, in combination with the finding regarding required communication of award information to the subrecipients (Finding 2024-04), results in a modified opinion for the subrecipient monitoring compliance requirement. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend Career and Technical Education establish processes to identify which subrecipients are subject to required audits and to obtain and review Uniform Guidance Single Audit reports, including developing a tracking system to ensure timely submission of required audit reports and timely and appropriate corrective action is taken on all deficiencies. We also recommend Career and Technical Education verify every subrecipient is audited as required by 2 CFR 200, Subpart F; follow-up and ensure that subrecipients take timely and appropriate action on all deficiencies of the Federal award; and issue management decisions and ensure audit findings have been resolved. CAREER AND TECHNICAL EDUCATION RESPONSE The Department agrees with this recommendation See “Management’s Response and Corrective Action” section of this report.
CONDITION The Career and Technical Education did not ensure all required information was provided to subrecipients provided Coronavirus Capital Project Funds CPF). In addition, the pass-through entity's internal controls were insufficient to ensure that subrecipients received communication regarding the necessary items. Required information not communicated included: • Subrecipient's name did not always match the name associated with its unique entity identifier obtained from SAM.gov; • Subrecipient's unique entity identifier; • Federal Award Identification Number; • Federal Award date; • Subaward Period of Performance Start and End Date; • Amounts of the Federal Funds obligated, committed, and in total to the subrecipient by the pass-through entity were not clearly identifiable between Coronavirus Capital Projects Fund and Coronavirus State and Local Fiscal Recovery Funds; • Assistance Listing Number; and, • Reference of requirement for auditor access to the subrecipient's records and financial statements. CRITERIA Federal regulation, 2 CFR 200.332(a), requires pass-through entities to communicate specific required information to subrecipients. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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. CAUSE Career and Technical Education worked with the Attorney General's Office to develop a standard template for agreements with subrecipients. However, Career and Technical Education did not ensure all required communications applicable to Federal awards were included in the standard template. EFFECT These required communications are required to help subrecipients meet all their reporting requirements, and to meet all award terms. Subrecipients subject to Single Audits also need this information for their audits. CONTEXT Career and Technical Education awarded Capital Project Fund subawards, individually up to $10 million, to 13 subrecipients totaling $74.6 million for 19 different multi-purpose community facility projects. Four subaward agreements were tested and all did not include the required information identified in the condition of this finding. In addition, three subrecipients received $6,666,667 for the projects from the State and Local Fiscal Recovery Fund. Career and Technical Education only entered into one grant agreement, which commingled Capital Project Funds and State and Local Fiscal Recovery Funds, with three of the 13 subrecipients. One of the three subrecipients that received both Capital Project Funds and State and Local Fiscal Recovery Funds had its fiscal year 2023 Single Audit on the Federal Audit Clearinghouse. This subrecipient incorrectly reported all $10 million as Capital Project Funds (ALN 21.029) on its Schedule of Expenditures of Federal Awards when only $3,333,333 should have been reported under ALN 21.029. Where sampling was performed, the audit used a non-statistical sampling method. This finding, in combination with the finding regarding required audits (Finding 2024-03), results in a modified opinion for the subrecipient monitoring compliance requirement. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend Career and Technical Education: • Communicate all required information of 2 CFR 200.332(b) to subrecipients; • Develop procedures to ensure grant agreement templates are updated and that all Coronavirus Capital Projects Fund award information is communicated to subrecipients; and, • Reissue grant agreements to outline the required information. CAREER AND TECHNICAL EDUCATION RESPONSE The Department agrees with this recommendation See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: 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 receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to 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 statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
Finding 2024-002: Subrecipient Pre-Award Risk Assessment Information on Federal Program: 47.074 Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: As part of our audit, we selected a sample of subawards charged to the major Federal programs. We noted that subaward risk assessments were not available for our inspection for those samples selected. Cause: The Society did not perform subaward risk assessments as required by Federal regulation. Effect or Potential Effect: The Society may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Society executes subaward agreements under US Federal grants. Therefore, the Society is subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of test work completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Society's general ledger (accounting system). There was total population of three subrecipients and our sample size was one. We consider our sample to be representative of the population. Identification of Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Society enhance their pre-award risk assessment policy and monitoring procedures to ensure that their subrecipients have accounting systems in place and adequate internal controls to administer the grant. The Society should also identify and apply appropriate sanctions for subrecipient noncompliance.
Finding 2024-002: Subrecipient Pre-Award Risk Assessment Information on Federal Program: 47.074 Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: As part of our audit, we selected a sample of subawards charged to the major Federal programs. We noted that subaward risk assessments were not available for our inspection for those samples selected. Cause: The Society did not perform subaward risk assessments as required by Federal regulation. Effect or Potential Effect: The Society may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Society executes subaward agreements under US Federal grants. Therefore, the Society is subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of test work completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Society's general ledger (accounting system). There was total population of three subrecipients and our sample size was one. We consider our sample to be representative of the population. Identification of Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Society enhance their pre-award risk assessment policy and monitoring procedures to ensure that their subrecipients have accounting systems in place and adequate internal controls to administer the grant. The Society should also identify and apply appropriate sanctions for subrecipient noncompliance.
Finding 2024-002: Subrecipient Pre-Award Risk Assessment Information on Federal Program: 47.074 Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: As part of our audit, we selected a sample of subawards charged to the major Federal programs. We noted that subaward risk assessments were not available for our inspection for those samples selected. Cause: The Society did not perform subaward risk assessments as required by Federal regulation. Effect or Potential Effect: The Society may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Society executes subaward agreements under US Federal grants. Therefore, the Society is subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of test work completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Society's general ledger (accounting system). There was total population of three subrecipients and our sample size was one. We consider our sample to be representative of the population. Identification of Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Society enhance their pre-award risk assessment policy and monitoring procedures to ensure that their subrecipients have accounting systems in place and adequate internal controls to administer the grant. The Society should also identify and apply appropriate sanctions for subrecipient noncompliance.
Finding 2024-002: Subrecipient Pre-Award Risk Assessment Information on Federal Program: 47.074 Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: As part of our audit, we selected a sample of subawards charged to the major Federal programs. We noted that subaward risk assessments were not available for our inspection for those samples selected. Cause: The Society did not perform subaward risk assessments as required by Federal regulation. Effect or Potential Effect: The Society may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Society executes subaward agreements under US Federal grants. Therefore, the Society is subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of test work completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Society's general ledger (accounting system). There was total population of three subrecipients and our sample size was one. We consider our sample to be representative of the population. Identification of Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Society enhance their pre-award risk assessment policy and monitoring procedures to ensure that their subrecipients have accounting systems in place and adequate internal controls to administer the grant. The Society should also identify and apply appropriate sanctions for subrecipient noncompliance.
Finding 2024-002: Subrecipient Pre-Award Risk Assessment Information on Federal Program: 47.074 Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: As part of our audit, we selected a sample of subawards charged to the major Federal programs. We noted that subaward risk assessments were not available for our inspection for those samples selected. Cause: The Society did not perform subaward risk assessments as required by Federal regulation. Effect or Potential Effect: The Society may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Society executes subaward agreements under US Federal grants. Therefore, the Society is subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of test work completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Society's general ledger (accounting system). There was total population of three subrecipients and our sample size was one. We consider our sample to be representative of the population. Identification of Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Society enhance their pre-award risk assessment policy and monitoring procedures to ensure that their subrecipients have accounting systems in place and adequate internal controls to administer the grant. The Society should also identify and apply appropriate sanctions for subrecipient noncompliance.
Finding 2024-002: Subrecipient Pre-Award Risk Assessment Information on Federal Program: 47.074 Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: As part of our audit, we selected a sample of subawards charged to the major Federal programs. We noted that subaward risk assessments were not available for our inspection for those samples selected. Cause: The Society did not perform subaward risk assessments as required by Federal regulation. Effect or Potential Effect: The Society may have inadvertently failed to perform monitoring procedures appropriate for a subrecipient’s assessed level of risk. Questioned Costs: N/A Context: The Society executes subaward agreements under US Federal grants. Therefore, the Society is subject to CFR § 200.332 "Requirements for pass-through entities". Our audit procedures consisted of test work completed on subawards and individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from the Society's general ledger (accounting system). There was total population of three subrecipients and our sample size was one. We consider our sample to be representative of the population. Identification of Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Society enhance their pre-award risk assessment policy and monitoring procedures to ensure that their subrecipients have accounting systems in place and adequate internal controls to administer the grant. The Society should also identify and apply appropriate sanctions for subrecipient noncompliance.
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding 2023-004. Statement of Condition In our reporting test, we found that the Municipality did not submit the corresponding reports for the fiscal year ended on June 30, 2024. Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process. § 200.332 Requirements for pass-through entities. (1) 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. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Cause of Condition The Municipality does not have the necessary personnel assigned to prepare and present reports in a timely manner. Effect of Condition The program is not in compliance with the reporting requirements as established in the contract agreement. Recommendation We recommend that the Municipality maintain constant monitoring to improve program controls. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with the reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement. Questioned Cost None. Prior Year Finding Yes. This finding is similar to prior-year finding 2023-004. Views of Responsible Officials and Planned Corrective Action The Municipality appointed a person to work on all the required reports and instructed them on the deadlines that apply. We were able to submit all past reports on January 2025. And subsequently we are complying with the reporting requirements. Implementation Date: June 30, 2025 Responsible Person: Carmen I. López Interim Finance Director
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding 2023-004. Statement of Condition In our reporting test, we found that the Municipality did not submit the corresponding reports for the fiscal year ended on June 30, 2024. Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process. § 200.332 Requirements for pass-through entities. (1) 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. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Cause of Condition The Municipality does not have the necessary personnel assigned to prepare and present reports in a timely manner. Effect of Condition The program is not in compliance with the reporting requirements as established in the contract agreement. Recommendation We recommend that the Municipality maintain constant monitoring to improve program controls. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with the reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement. Questioned Cost None. Prior Year Finding Yes. This finding is similar to prior-year finding 2023-004. Views of Responsible Officials and Planned Corrective Action The Municipality appointed a person to work on all the required reports and instructed them on the deadlines that apply. We were able to submit all past reports on January 2025. And subsequently we are complying with the reporting requirements. Implementation Date: June 30, 2025 Responsible Person: Carmen I. López Interim Finance Director
Program: AL 97.036 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) – Subrecipient Monitoring Grant Number & Year: 4616-DR-NE, declared September 6, 2021; 4420-DR-NE, declared March 21, 2019; 4641-DR-NE, declared February 23, 2022; 4662-DR-NE, declared July 27, 2022; 4521-DR-NE, declared April 4, 2020 Federal Grantor Agency: U.S. Department of Homeland Security Criteria: 2 CFR § 200.332 (January 1, 2024) states, in relevant part, the following: All pass-through entities must: * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501. 2 CFR § 200.501(b) (January 1, 2024) states, in relevant part, the following, “A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514 . . . .” A good internal control plan includes procedures to ensure subrecipient audits are reviewed timely. Condition: The Agency did not ensure subrecipients obtained Single audits. A similar finding was noted in the prior audit. Repeat Finding: 2023-063 Questioned Costs: None Statistical Sample: No Context: We selected three subrecipients for testing that would have required a Single audit based on the amount of funds received from the Agency during the subrecipient’s previous fiscal year. One of the three subrecipients received $12,604,747 in disaster grant funds passed through the Agency during the subrecipient’s fiscal year 2023, but did not submit a Single audit and the Agency had not followed up with the subrecipient. Cause: Employee oversight. The subrecipient returned a certification stating that they did not require a Single audit, and the Agency failed to verify the certification was proper. Effect: Without adequate monitoring procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency implement procedures to ensure subrecipient audits are obtained and reviewed timely. Management Response: Military (NEMA) agrees with the finding and has implemented the corrective action plan.
Program: AL 15.611 – Wildlife Restoration and Basic Hunter Education and Safety – Allowability & Subrecipient Monitoring Grant Number & Year: F22AF01344-00, July 1, 2022, through June 30, 2025 Federal Grantor Agency: U.S. Department of the Interior Criteria: For the Wildlife Restoration program, Title 50 CFR § 80.50(a)(6)(iii) (October 1, 2023) states, in part, “Grantees and subgrantees must follow the requirements at 2 CFR part 200 when acquiring equipment, goods, and services under an award[.]” 2 CFR § 200.332(d) (January 1, 2024) requires a pass-through entity to do the following: 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[.] 2 CFR § 200.403 (January 1, 2024) requires costs to be necessary, reasonable, and adequately documented. 2 CFR § 200.430(i) (January 1, 2024) provides the following, in relevant part: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE’s definition of IBS); * * * * (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: * * * * (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR § 200.431(b) (January 1, 2024) states, in relevant part: The cost of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave, and other similar benefits, are allowable if all of the following criteria are met: (1) They are provided under established written leave policies; (2) The costs are equitably allocated to all related activities, including Federal awards; and, (3) The accounting basis (cash or accrual) selected for costing each type of leave is consistently followed by the non-Federal entity or specified grouping of employees. (i) When a non-Federal entity uses the cash basis of accounting, the cost of leave is recognized in the period that the leave is taken and paid for. Payments for unused leave when an employee retires or terminates employment are allowable in the year of payment. (ii) The accrual basis may be only used for those types of leave for which a liability as defined by GAAP exists when the leave is earned. When a non-Federal entity uses the accrual basis of accounting, allowable leave costs are the lesser of the amount accrued or funded. 2 CFR § 200.431(c) (January 1, 2024) states the following: The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker’s compensation insurance (except as indicated in §200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity’s accounting practices. A good internal control plan requires procedures to ensure that salaries and wages, as well as other costs charged to subawards, are documented properly. Condition: Adequate documentation was not on file to support a payment to a subrecipient. Repeat Finding: No Questioned Costs: $1,697 known Statistical Sample: No Context: We randomly selected 16 non-payroll documents to test. Our sample population included operating expenditures, capital outlay expenditures, and subrecipient reimbursements. One of 16 documents tested lacked adequate documentation to support that the costs were in accordance with Federal cost principles. The Agency paid $17,268 to a subrecipient that submitted an invoice for lodging and travel costs, payroll, and indirect costs for one employee. The employee’s base rate of $35.82 per hour for 378.5 hours worked on the grant was calculated according to the following: a pay rate of $24.76 per hour; a charge of 18% for paid time off; 22.6% for employer taxes and benefits; and 26.2% for indirect costs. However, the subrecipient provided no documentation, such as payroll records or bank statements, to support the payroll costs, totaling $17,110. After the APA requested support, the Agency provided paystubs and detailed payroll records from the subrecipient’s accounting system; however, based on the support provided, the wages, benefits, taxes, and indirect costs allocable to the grant totaled $15,413. As a result, we questioned the variance of $1,697 between the support provided and the amount charged to the grant for the payroll costs. Federal payment errors noted for the sample tested were $1,697. The total Federal sample tested was $300,860, and the total sample population was $10,649,122. Based on the sample tested, the case error rate was 6.25% (1/16). The dollar error rate was 0.56% ($1,697/$300,860), which estimates the potential dollars at risk for fiscal year 2024 to be $59,635 (dollar error rate multiplied by the population). Cause: Inadequate subrecipient monitoring procedures. Effect: Without adequate subrecipient monitoring procedures and supporting documentation on file, there is an increased risk for not only misuse of Federal funds but also payments not complying with State and Federal requirements. Recommendation: We recommend the Agency improve subrecipient monitoring to ensure both the allowability of costs and adherence to Federal regulations. Management Response: NGPC disagrees with the questioned costs identified by the APA. Our subrecipient policy includes the ability to ask for detailed records for any expense at any time. Accounting records, invoices, and paystubs were provided to substantiate the total invoice amount. The subrecipient has been audited and there were no issues with their financial systems. Explanations and calculations were provided to include the benefits and taxes paid out by the subrecipient, which matched the accounting records. Per their latest audit, these expenses are allocated on the basis of time and effort which complies with 2 CFR § 200.431(c). Performance reports were received and activity monitored by NGPC staff. NGPC works closely with the subrecipient which is considered a low-risk entity as demonstrated by the information provided for the audit. APA Response: Documentation provided to the auditors was inadequate to support the full amount charged to the grant. Documentation was not provided to support that the paid time off charged to the grant was reasonable, and no support was provided for Federal and State unemployment taxes, workers’ compensation costs, retirement plan fees, and other benefit costs.
Program: AL 20.509 – Formula Grants for Rural Areas – Allowability & Subrecipient Monitoring Grant Number & Year: NE-2021-11-00, Performance End FFY 2024; NE-2023-030-00, Performance End October 30, 2025; NE-2024-006-00, Performance End December 31, 2026 Federal Grantor Agency: U.S. Department of Transportation Criteria: Per 2 CFR § 1201.1 (January 1, 2024), the U.S. Department of Transportation adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements set forth at Title 2 CFR part 200. 2 CFR § 200.403 (January 1, 2024) requires costs to be reasonable, necessary, and adequately documented. A good internal control plan requires procedures to be in place to ensure compliance with Federal and State requirements. 2 CFR § 200.332(d) (January 1, 2024) requires the pass-through entity to do the following: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR § 200.430(i)(1) (January 1, 2024) states the following, in relevant part: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; * * * * (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards . . . . Per 2 CFR § 200.405(a) (January 1, 2024), “A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” 2 CFR § 200.442(a) (January 1, 2024) states the following: Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred to raise capital or obtain contributions, are unallowable. Fund raising costs for the purposes of meeting the Federal program objectives are allowable with the prior written approval of the Federal agency. Condition: The Agency lacked adequate documentation to support that payments were for allowable activities and in accordance with allowable cost principles. A similar finding was noted in the prior audit. Repeat Finding: 2023-065 Questioned Costs: $4,905 known See Schedule of Findings and Questioned Costs for chart/table. Statistical Sample: No Context: During the fiscal year, the Agency paid 64 subrecipients a total of $12,622,391. We selected five payments to subrecipients for testing. The Agency performed financial reviews for subrecipients; however, the reviews tested did not always include all necessary supporting documentation. When additional documentation was needed, we provided the Agency with the opportunity to obtain additional support from the subrecipient; however, adequate support was not always obtained or able to be provided. See Schedule of Findings and Questioned Costs for chart/table. We noted the following: • Two subrecipients tested did not have adequate support for all personnel charges. One individual tested was reimbursed at the non-operating rate but should have been reimbursed at the operating rate. Another individual’s personnel costs were based on budgeted amounts. • Fuel costs for one subrecipient did not agree with invoices. • One subrecipient did not properly report revenues collected, resulting in an overcharge of the Federal reimbursement. • All five subrecipients tested had capital or non-operating costs that were not adequately supported. Costs allocated between programs were not adequately supported, travel costs did not appear reasonable, and fundraising costs of $100 were charged. Cause: Procedures were not adequate to ensure costs were in accordance with Federal requirements. Effect: Increased risk for errors or misuse of funds. Recommendation: We recommend the Agency improve procedures to ensure expenditures are allowable and in accordance with Federal regulations. Management Response: NDOT acknowledges the audit findings related to subrecipient monitoring and cost allowability under the grant funding. We will continue to ensure compliance with regulations and are committed to improving our internal controls to prevent recurrence of similar findings.
Finding Number: 2024-009 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not Applicable ALN Number(s) and Program Title(s): 21.027 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Federal Awarding Agency: U.S. Department of the Treasury Federal Award Number(s): SLFRP3627 Federal Award Year(s): 2021 Compliance Requirement(s) Affected: Subrecipient Monitoring Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: A similar issue was reported in prior-year finding 2023-008. Criteria: In accordance with 2 CFR § 200.332(a)(1), all pass-through 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: i. Subrecipient name (which must match the name associated with its unique entity identifier). ii. Subrecipient's unique entity identifier. iii. Federal Award Identification Number (FAIN). iv. Federal award date. v. Subaward Period of Performance start and end date. vi. Subaward budget period start and end date. vii. Amount of federal funds obligated 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 by 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 title and number (ALN); the pass-through entity must identify the dollar amount made available under each federal award and the ALN at the time of disbursement. xiii. Identification of whether the federal award is research and development. xiv. Indirect cost rate for the federal award (including if the de minimis rate is used in accordance with § 200.414). In addition, 2 CFR § 200.332(a)(4) requires an approved, federally recognized indirect cost rate between the subrecipient and the federal awarding agency. Condition and Context: ALA staff reviewed seven executed grant agreements, totaling $42,681,880, to determine if they met the Uniform Guidance criteria. Five of these grant agreements were selected randomly, and the remaining two were selected based upon concerns communicated to ALA by the Agency. The following deficiencies were noted in the two grant agreements selected based upon Agency concerns: • The agreements, which totaled $6,549,322, did not include all required terms, specifically items ii, iii, v, xii, xiii, and xiv from the criteria noted above. • The agreements did not include indirect cost rate agreements. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: The Agency did not ensure staff were trained and knowledgeable regarding Uniform Guidance requirements for subrecipients. Effect: Without a proper grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements, and the Agency risks noncompliance with subrecipient monitoring requirements. Recommendation: ALA staff recommend the Agency provide training to appropriate staff to ensure adherence to Uniform Guidance regarding subrecipient monitoring. Views of Responsible Officials and Planned Corrective Action: In 2023, ASBO sent out Amendment #1 for all SLFRF subgrants. This amendment was a one-page sheet providing information for all the requirements listed in 2 CFR § 200.332(a)(1). The subrecipient listed in this finding, Extreme Broadband, did not acknowledge or return their amendment. We will begin to request acknowledgement from this provider on a continuous quarterly basis. Anticipated Completion Date: March 4, 2025 Contact Person: Glen Howie, Jr. Director, Ark State Broadband Office Department of Commerce 1 Commerce Way Little Rock, AR 72202 (501) 682-1123 Glen.Howie@Arkansas.gov
Finding Number: 2024-010 State/Educational Agency(s): Arkansas Department of Agriculture – Natural Resources Division Pass-Through Entity: Not Applicable ALN Number(s) and Program Title(s): 21.027 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Federal Awarding Agency: U.S. Department of the Treasury Federal Award Number(s): SLFRP3627 Federal Award Year(s): 2021 Compliance Requirement(s) Affected: Subrecipient Monitoring Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.332(a)(1), all pass-through 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: i. Subrecipient name (which must match the name associated with its unique entity identifier). ii. Subrecipient's unique entity identifier. iii. Federal Award Identification Number (FAIN). iv. Federal award date. v. Subaward Period of Performance start and end date. vi. Subaward budget period start and end date. vii. Amount of federal funds obligated 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 federal agency, pass-through entity, and contact information for awarding official of the pass-through entity. xii. Assistance listings title and number (ALN); the pass-through entity must identify the dollar amount made available under each federal award and the ALN at the time of disbursement. xiii. Identification of whether the federal award is research and development. xiv. Indirect cost rate for the federal award (including if the de minimis rate is used in accordance with § 200.414). In addition, 2 CFR § 200.332(a)(4) requires an approved, federally recognized indirect cost rate between the subrecipient and the federal awarding agency. Condition and Context: ALA staff reviewed 13 executed grant agreements, totaling $29,342,709, to determine if they met the Uniform Guidance criteria. The following deficiencies were noted: • The 13 grant agreements did not include all required terms, specifically items ii, iii, v, vi, xi, xii, xiii, and xiv from the criteria noted above. • An indirect cost rate agreement could not be provided. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: The Agency did not ensure staff were trained and knowledgeable regarding Uniform Guidance requirements for subrecipients. Effect: Without a proper grant agreement, subrecipients may be unaware that their award is subject to federal compliance requirements, and the Agency risks noncompliance with subrecipient monitoring requirements. Recommendation: ALA staff recommend the Agency provide training to appropriate staff to ensure adherence to Uniform Guidance regarding subrecipient monitoring. Views of Responsible Officials and Planned Corrective Action: The Department will execute an amendment to the grant agreements for all ARPA funding not disbursed as of 7/1/2024 to include the missing data as detailed in the finding. Staff will be trained on Uniform Guidance requirements. Anticipated Completion Date: June 30, 2025 Contact Person: Debby Dickson Water Development Division Manager Arkansas Department of Agriculture-Natural Resources Division 1 Natural Resources Drive Little Rock, AR 72205 (501) 225-1598 Debra.Dickson@agriculture.arkansas.gov
Finding Number: 2024-011 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 21.027 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Federal Awarding Agency: U.S. Department of the Treasury Federal Award Number(s): SLFRP3627 Federal Award Year(s): 2021 Compliance Requirement(s) Affected: Subrecipient Monitoring Type of Finding: Material Weakness Repeat Finding: A similar issue was reported in prior-year finding 2023-008. Criteria: In accordance with 2 CFR § 200.332(c), pass-through entities must evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine appropriate subrecipient monitoring. Section 8(C)(7) of the Arkansas Rural Connect (ARC) rules require applicant Internet Service Providers (ISPs) to submit financial statements for the three most recent years, including an audited financial statement for the most recent year, for grant requests exceeding $2 million. Section 9(G) of the ARC rules state that within 45 days after grant approval, the ISP should submit the project plans to a licensed Professional Engineer (PE) for a technical adequacy confirmation. Once received, the ISP should submit the PE approval stamp to the Arkansas State Broadband Office (ASBO). Condition and Context: ALA staff reviewed eight executed subaward agreements, totaling $42,681,880, to determine if they met the Uniform Guidance criteria, as well as relevant ARC rules. The following deficiencies were noted: • For six of the eight agreements tested, the ASBO did not receive and review the applicants’ financial statements for the three previous years prior to executing a grant agreement. • Discussion with management indicated that the pass-through entity did not have documentation indicating that a PE reviewed the technical adequacy of any of the eight broadband projects ALA reviewed. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: Discussion with management indicated the ASBO was understaffed during the time these agreements were executed, and it did not ensure that training included requirements of Uniform Guidance or ARC rules. Effect: Without proper review of contractor financial statements, the Agency could award federal funds to a high-risk entity and fail to adjust the methods of monitoring accordingly. Without approval of a licensed PE, project plans may fail to meet technical adequacy required for the project. Recommendation: ALA staff recommend the Agency strengthen controls by providing training on established ARC rules and procedures, which include a review of the financial statements of contractors as well as the technical adequacy of projects to ensure adherence to Uniform Guidance and ARC rules regarding subrecipient monitoring. Views of Responsible Officials and Planned Corrective Action: Current staff believes the 3 requirements listed above were not performed in the past. For remaining active SLFRF subgrants, ASBO will establish a fraud/risk/noncompliance rating and set appropriate monitoring standards. Should any new applications for SLFRF funding be procured, ASBO will require financial statements and a PE Stamp prior to grant agreement execution. ASBO will provide 2 CFR 200 training and ARC rules training to our staff and contractors. Anticipated Completion Date: April 1, 2025 Contact Person: Glen Howie, Jr. Director, Ark State Broadband Office Department of Commerce 1 Commerce Way Little Rock, AR 72202 (501) 682-1123 Glen.Howie@Arkansas.gov
Reference Number: 2024-011 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Award Number and Year: FFY2023 – FFY2024 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, the following requirements are imposed on pass-through entities: (a) 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. Required information includes: (1) (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in § 200.425. 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 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 Vermont Agency of Transportation (VTrans) omitted required federal award information from subawards it issued in the program and did not adequately monitor subrecipients. Context: Nineteen subawards were selected for testing and the following exceptions were noted: • For 16 of 19 subawards selected for testing, the federal award date was not included on the subaward agreement. • For 1 of 19 subawards selected for testing, the last on-site subrecipient monitoring visit was performed in FY 2019 and the next on-site monitoring did not take place until FY 2024. Per the VTrans subrecipient monitoring plan, on-site monitoring must be performed no less than every three years. Cause: Procedures and internal controls were not sufficient to ensure that subawards included all required federal information. Although VTrans subsequently modified its subaward issuance process, controls in effect during the audit period were not sufficient to ensure that subawards included all required information. Procedures and internal controls were also not sufficient to ensure that timely on-site monitoring visits were performed in accordance with its monitoring plan. Effect: Excluding the required federal grant award information at the time of subaward issuance 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. Failure to conduct adequate subrecipient monitoring may result in a failure of VTrans to detect that subawards are used for unauthorized purposes, are managed in violation of the terms and conditions of the subawards, or that subaward performance goals are 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 VTrans personnel on a timely basis. Questioned costs: Undetermined. Recommendation: VTrans should review and enhance internal controls and procedures to ensure that all required federal award information is included in subawards and that on-site subrecipient monitoring is conducted timely per the terms of its subrecipient monitoring plan. Views of responsible officials: Management agrees with the finding.
Finding 2024-002 Material Weakness: Subrecipient Monitoring – Compliance and Control Finding ALN 21.027: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-through Entity: Illinois State Board of Education Criteria Or Specific Requirement: 2 CFR 200.332(a)(1) mandates that the Project inform subrecipients of specific federal award identifiers, including the award date, period of performance, federal awarding agency, Assistance Listing Number, and program name. Furthermore, 2 CFR 200.332(d) requires the Project to review subrecipient financial and performance reports, including single audit reports. Accurate award information allows subrecipients to fulfill their reporting obligations correctly and ensures that federal funds are used appropriately and for the intended purposes. Condition: The audit revealed that management did not provide subrecipients with accurate award information in all instances. Additionally, the review of subrecipient single audit reports was not included in the Project's established monitoring procedures. Cause: Management does not have an internal control process in place to ensure proper subrecipient monitoring. Effect: Failure to communicate all required federal award identifiers to subrecipients may result in their non-compliance with the federal program requirements. Questioned Costs: None Context: A review of a sample of 8 subrecipient awards and correspondence revealed that one subrecipient submitted a filing to the Federal Audit Clearinghouse with an incorrect Assistance Listing Number recorded on their data collection form. Additionally, all 16 subrecipients received grant agreements with an incorrect Assistance Listing Number. Identification As A Repeat Finding: 2023-003 Recommendation: We recommend that all subrecipient grant agreements are updated to include appropriate grant information set forth by 2 CFR 200.332(a)(1) and 2 CFR 200.332(d). Views Of Responsible Officials And Planned Corrective Action: An adequate subrecipient risk assessment policy will be put in place to evaluate and monitor subrecipients. Southwest Organizing Project will provide subrecipients with all required Federal awards identifiers. Edith Robles will ensure that Federal award identifiers are included in subrecipients' Grant Agreements.
Finding 2024 - 001 Lack of Subrecipient Monitoring Procedures – Verification of Audits Information on the Federal Programs: 19.511 Criteria: Per 2 CFR § 200.332(f), pass-through entities must ensure that subrecipients expending $750,000 or more in Federal awards during the subrecipient’s fiscal year undergo a single or program-specific audit as required by 2 CFR § 200.501. Additionally, per 2 CFR § 200.332(d), passthrough entities must monitor subrecipients to ensure compliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: During the audit, it was noted that the entity does not have a formalized process in place to verify whether subrecipients required to undergo a single audit have completed and submitted the audit as required. Specifically, there was no documented evidence that the entity reviewed audit reports or followed up on subrecipient audit compliance. Cause: The entity has not established or implemented adequate policies and procedures to monitor subrecipient compliance with audit requirements under the Uniform Guidance. Effect or Potential Effect: Failure to verify and review subrecipient audit reports increases the risk that noncompliance, questioned costs, or internal control deficiencies at the subrecipient level go undetected, potentially resulting in unallowable costs or noncompliance with Federal regulations. Questioned Costs: None noted at this time; however, the lack of monitoring increases the risk of unallowable costs in Federal programs. Context: BRAC USA has one primary subrecipient for which a single audit was not performed prior to our audit fieldwork. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the entity develop and implement formal written procedures to ensure subrecipient audit requirements are met. These procedures should include: Identifying subrecipients required to undergo a single audit. Requiring subrecipients to submit audit reports and management letters annually. Reviewing subrecipient audit reports to identify findings that may impact the entity. Establishing follow-up procedures to address and resolve subrecipient audit findings. Maintaining documentation of audit verification and any corrective actions taken.
Finding: 2024-001 Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number 16.738 Criteria: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Condition: As part of our audit, we selected a sample of subawards charged to the major Federal program. We noted that the pre-award risk assessments were not performed until November 2024, subsequent to the subawards being signed with the subawardees. Based on our discussions with management, the process for performing pre-award risk assessments for subrecipients and determining and documenting the appropriate level of ongoing monitoring for subrecipients was implemented in November 2024. Cause: The Association did not perform pre-award risk assessments on its subrecipients as required by Federal regulation. Effect: The Association could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None noted. Context: Our audit procedures in this area consisted of substantive testwork over a sample of subrecipient expenditures that were selected based on a defined threshold. We consider our sample to be representative of the populations, and thus, is a statistically valid sample. The issue is deemed to be systemic. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Association strictly adhere to its current subaward policy and ensure the risk assessment procedures over all of its subrecipients are performed and documented prior to engagement. Based on these risk assessments, the Association should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels.
2024-003 Subrecipient Monitoring Federal Agency: Department of Labor Federal Programs: 17.258/17.259/17.278 Workforce Innovation Opportunity Act (WIOA) Cluster (Passed through MassHire Department of Career Services (MDCS)) Condition: The Organization did not perform any monitoring of its subrecipient in fiscal year 2024. Criteria: 2 CFR 200.332 of the Uniform Guidance requires pass-through entities to: • Identify the award and applicable requirements of the funding source to its subrecipients. • Evaluate each subrecipient’s risk of noncompliance with the regulations of the federal funds. • 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. Cause: Although the Organization has policies and procedures in place surrounding the subrecipient monitoring requirements, there were delays in the subrecipient providing financial and other records needed for the Organization to complete its annual monitoring requirements. Effect: The Organization cannot ensure the costs of goods and services charged to the federal program are allowable and charged in accordance with the applicable regulations. Context: Total expenditures for the WIOA Cluster were $1,223,337 for the year ended June 30, 2024, which included $373,352 of expenditures to subrecipients. Questioned Costs: Unknown Recommendation: We recommend that management review its policies and procedures to ensure subrecipients are monitored for program compliance at least annually. Management Response: Management agrees with the finding. See management’s attached corrective action plan.
2024-003 Subrecipient Monitoring Federal Agency: Department of Labor Federal Programs: 17.258/17.259/17.278 Workforce Innovation Opportunity Act (WIOA) Cluster (Passed through MassHire Department of Career Services (MDCS)) Condition: The Organization did not perform any monitoring of its subrecipient in fiscal year 2024. Criteria: 2 CFR 200.332 of the Uniform Guidance requires pass-through entities to: • Identify the award and applicable requirements of the funding source to its subrecipients. • Evaluate each subrecipient’s risk of noncompliance with the regulations of the federal funds. • 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. Cause: Although the Organization has policies and procedures in place surrounding the subrecipient monitoring requirements, there were delays in the subrecipient providing financial and other records needed for the Organization to complete its annual monitoring requirements. Effect: The Organization cannot ensure the costs of goods and services charged to the federal program are allowable and charged in accordance with the applicable regulations. Context: Total expenditures for the WIOA Cluster were $1,223,337 for the year ended June 30, 2024, which included $373,352 of expenditures to subrecipients. Questioned Costs: Unknown Recommendation: We recommend that management review its policies and procedures to ensure subrecipients are monitored for program compliance at least annually. Management Response: Management agrees with the finding. See management’s attached corrective action plan.
2024-003 Subrecipient Monitoring Federal Agency: Department of Labor Federal Programs: 17.258/17.259/17.278 Workforce Innovation Opportunity Act (WIOA) Cluster (Passed through MassHire Department of Career Services (MDCS)) Condition: The Organization did not perform any monitoring of its subrecipient in fiscal year 2024. Criteria: 2 CFR 200.332 of the Uniform Guidance requires pass-through entities to: • Identify the award and applicable requirements of the funding source to its subrecipients. • Evaluate each subrecipient’s risk of noncompliance with the regulations of the federal funds. • 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. Cause: Although the Organization has policies and procedures in place surrounding the subrecipient monitoring requirements, there were delays in the subrecipient providing financial and other records needed for the Organization to complete its annual monitoring requirements. Effect: The Organization cannot ensure the costs of goods and services charged to the federal program are allowable and charged in accordance with the applicable regulations. Context: Total expenditures for the WIOA Cluster were $1,223,337 for the year ended June 30, 2024, which included $373,352 of expenditures to subrecipients. Questioned Costs: Unknown Recommendation: We recommend that management review its policies and procedures to ensure subrecipients are monitored for program compliance at least annually. Management Response: Management agrees with the finding. See management’s attached corrective action plan.