2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with subrecipients Award Name: Various - All R&D Cluster awards with subrecipients Award Year: FY2023 Pass-through entities and ID Number: Various - All R&D Cluster awards with subrecipients Assistance Listing Number: Various – All R&D Cluster awards with subrecipients Condition While the University has a detailed pre-award risk assessment process prior to entering into a subrecipient relationship, which includes review of subrecipient Uniform Guidance reports, subsequent review of Uniform Guidance reports for monitoring purposes is not consistently completed. Subsequent review of Uniform Guidance reports for monitoring purposes is completed at the time of a subaward amendment, or no less frequently than an annual basis per University policy, however, for 4 out of 25 subaward selections, the subawards were not amended within a year. As such, over a year passed since a Uniform Guidance report was reviewed for these subrecipients for monitoring purposes. Additionally, given the risk assessments are used to cover certain post-award subrecipient monitoring requirements, we noted the following: • 4 out of 25 selections did not have clear documentation as to which Uniform Guidance report had been specifically reviewed • 3 out of 25 subrecipients had findings/deficiencies in their Uniform Guidance reports and there was no documentation for how the University concluded these were not relevant to their subawards • 1 out of 5 subrecipients without Uniform Guidance reports did not have notations on alternative support that was reviewed in lieu of Uniform Guidance reports, as required by University policy. Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • 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. Additionally, 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Cause Review of Uniform Guidance reports for post-award monitoring purposes is dependent upon a subaward amendment being executed. If an annual amendment is not executed, there is a gap in the monitoring process as the latest Uniform Guidance reports did not get reviewed. While the University expected all subrecipients to have a subaward amendment processed within a year, the testing noted above identified instances where no amendment was processed, and as such, a Uniform Guidance report was not reviewed within that period of time. Additionally, in regard to the completeness of documentation within the risk assessments, while individuals executing the subaward agreements are required to review the risk assessment form in conjunction with the agreement, there is no formal secondary review required to be evidenced and as such, certain elements were overlooked. Effect The lack of an annual review of subrecipient Uniform Guidance reports may result in potential compliance issues not being identified and management not addressing findings and issuing a management decision, as required under the Uniform Guidance. In addition, the lack of review of the risk assessment form may result in missing information not being identified. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the University review their policies and procedures specific to reviewing Uniform Guidance reports of subrecipients for post-award monitoring purposes to ensure all subrecipient reports are reviewed annually. Additionally, we recommend a formal secondary sign-off be included on the risk assessment form to ensure completeness and agreement with conclusions reached. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings
U.S. Department of Health and Human Services, California Department of Social Services Federal Financial Assistance Listing/CFDA Number 93.575 Award Year 2022/23 Child Care and Development Fund Cluster Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control and Material Instance of Non-Compliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR 200.332(a) - Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information at 2 CFR 200.332(a)(1) through (6) at the time of the subaward and if any of those data elements change, include the changes in subsequent subaward modification. • 2 CFR 200.332(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 the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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. Condition: The information required in accordance with 2 CFR 200.332(a)(1) through (6) was not provided at the time of the subaward. The information was provided to the subrecipients subsequent to the start date of the subaward. The Commission was responsible for the monitoring of the subrecipients to ensure that the subawards were used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. During our testing, we noted the Commission did not perform the risk assessment for 3 of 3 subrecipients. Due to the timing of the notifications of subaward to the subrecipients, the Commission was not able to verify whether subrecipients had reported the subawards within their financial statements as federal awards. Cause: During the current fiscal year, the Commission was implementing policies and procedures for subrecipient monitoring. However, the subrecipient monitoring procedures were not fully implemented as of year-end. Effect: The Commission had not fully complied with subrecipient monitoring requirements. Questioned Costs: None reported. Context: A nonstatistical sample of three (3) of three (3) subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Year: Yes – 2022-002 Recommendation: We recommend that the Commission adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
U.S. Department of Health and Human Services, California Department of Social Services Federal Financial Assistance Listing/CFDA Number 93.575 Award Year 2022/23 Child Care and Development Fund Cluster Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control and Material Instance of Non-Compliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR 200.332(a) - Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information at 2 CFR 200.332(a)(1) through (6) at the time of the subaward and if any of those data elements change, include the changes in subsequent subaward modification. • 2 CFR 200.332(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 the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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. Condition: The information required in accordance with 2 CFR 200.332(a)(1) through (6) was not provided at the time of the subaward. The information was provided to the subrecipients subsequent to the start date of the subaward. The Commission was responsible for the monitoring of the subrecipients to ensure that the subawards were used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. During our testing, we noted the Commission did not perform the risk assessment for 3 of 3 subrecipients. Due to the timing of the notifications of subaward to the subrecipients, the Commission was not able to verify whether subrecipients had reported the subawards within their financial statements as federal awards. Cause: During the current fiscal year, the Commission was implementing policies and procedures for subrecipient monitoring. However, the subrecipient monitoring procedures were not fully implemented as of year-end. Effect: The Commission had not fully complied with subrecipient monitoring requirements. Questioned Costs: None reported. Context: A nonstatistical sample of three (3) of three (3) subrecipients were selected for subrecipient monitoring testing. Repeat Finding from Prior Year: Yes – 2022-002 Recommendation: We recommend that the Commission adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program Information Research and Development Cluster: ALN 47.076 NSF Robert Noyce Teacher Scholarship Program, ALN 93.213 Research and Training in Complementary and Alternative Medicine Federal Award Year: July 1, 2022 – June 30, 2023 Criteria or Requirement Title 2, U.S. Code of Federal Regulations Part 200 (2 CFR 200.332), Requirements for pass-through entities requires that all pass-through entities must verify that every subrecipient is audited (as required by 2 CFR Part 200 Subpart F) when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Title 200 part 2 CFR 200.303 states that the Institution, as a federal grant recipient, must “establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding For 3 subrecipients selected for testing, evidence of controls to ensure that subrecipients had been audited in accordance with by 2 CFR Part 200 Subpart F, or were not subject to audit, was not available. Cause and Possible Asserted Effect The University did not have sufficient controls over collection and review of audit reports of subrecipients under 2 CFR Part 200 Subpart F. Identification of questioned costs and how they were computed None Sample statistically valid The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding from prior year The audit finding is not a repeat finding. Recommendation We recommend that the University strengthen its controls over monitoring of subrecipients, in order to ensure that audit reports of subrecipients under 2 CFR Part 200 Subpart F are obtained and timely reviewed. Views on responsible officials Pacific University acknowledges the importance of an effective control environment and closely monitors activities of subrecipients under federal awards. Pacific was able to demonstrate that the selected subrecipients had appropriate audits under Subpart F (or were not subject to such audits). However, the University will enhance controls related to tracking such compliance.
Program Information Research and Development Cluster: ALN 47.076 NSF Robert Noyce Teacher Scholarship Program, ALN 93.213 Research and Training in Complementary and Alternative Medicine Federal Award Year: July 1, 2022 – June 30, 2023 Criteria or Requirement Title 2, U.S. Code of Federal Regulations Part 200 (2 CFR 200.332), Requirements for pass-through entities requires that all pass-through entities must verify that every subrecipient is audited (as required by 2 CFR Part 200 Subpart F) when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. Title 200 part 2 CFR 200.303 states that the Institution, as a federal grant recipient, must “establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding For 3 subrecipients selected for testing, evidence of controls to ensure that subrecipients had been audited in accordance with by 2 CFR Part 200 Subpart F, or were not subject to audit, was not available. Cause and Possible Asserted Effect The University did not have sufficient controls over collection and review of audit reports of subrecipients under 2 CFR Part 200 Subpart F. Identification of questioned costs and how they were computed None Sample statistically valid The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding from prior year The audit finding is not a repeat finding. Recommendation We recommend that the University strengthen its controls over monitoring of subrecipients, in order to ensure that audit reports of subrecipients under 2 CFR Part 200 Subpart F are obtained and timely reviewed. Views on responsible officials Pacific University acknowledges the importance of an effective control environment and closely monitors activities of subrecipients under federal awards. Pacific was able to demonstrate that the selected subrecipients had appropriate audits under Subpart F (or were not subject to such audits). However, the University will enhance controls related to tracking such compliance.
2023–047 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Health and Human Services Low-Income Home Energy Assistance 93.568/COVID-19 93.568, Grant Award G-2101WVE5C6, Grant Award G-2201WVLIEA, Grant Award G-2201WVLIEI, Grant Award G-2301WVLIEE, Grant Award G-2301WVLIEA, Grant Award G-2301WVLIEI Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that the non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per 2 CFR 200.332(f), “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: During our testing of subrecipient monitoring for subrecipients subject to Uniform Guidance Audit Requirements, it was noted that for the five subrecipients selected that were subject to audit requirements, the management of the West Virginia Community Advancement and Development (WV CAD) was unable to provide supporting documentation that verified the agency performed due diligence to ensure that the subrecipients were properly audited in accordance with the provisions of 2 CFR 200.332(f). Cause: There was lack of supporting documentation provided to properly determine whether the WV CAD management properly verified whether all subrecipients had been audited that were required to be under the requirements of 2 CFR 200.332(f). Effect or Potential Effect: The WV CAD does not have proper internal controls in place to ensure policies and procedures surrounding subrecipient monitoring compliance requirements are in effect. The WV CAD does not have evidence to support that all subrecipients that were required to be audited were done so properly; therefore, this could result in subrecipients required to be audited not having an audit completed. Questioned Costs: N/A Context: Total expenditures and total subrecipient expenditures for the Low-Income Home Energy Assistance program for the year ended June 30, 2023, were $78,229,389 and $17,209,504, respectively. There were 16 total subrecipients and all 5 selected for testing were unable to provide information to support due diligence procedures over subrecipients. Identification as a Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the WV CAD management review policies and procedures for sufficiency and commit appropriate personnel to subrecipient monitoring to ensure they are in compliance with all federal requirements. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
2023–047 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Health and Human Services Low-Income Home Energy Assistance 93.568/COVID-19 93.568, Grant Award G-2101WVE5C6, Grant Award G-2201WVLIEA, Grant Award G-2201WVLIEI, Grant Award G-2301WVLIEE, Grant Award G-2301WVLIEA, Grant Award G-2301WVLIEI Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that the non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per 2 CFR 200.332(f), “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition: During our testing of subrecipient monitoring for subrecipients subject to Uniform Guidance Audit Requirements, it was noted that for the five subrecipients selected that were subject to audit requirements, the management of the West Virginia Community Advancement and Development (WV CAD) was unable to provide supporting documentation that verified the agency performed due diligence to ensure that the subrecipients were properly audited in accordance with the provisions of 2 CFR 200.332(f). Cause: There was lack of supporting documentation provided to properly determine whether the WV CAD management properly verified whether all subrecipients had been audited that were required to be under the requirements of 2 CFR 200.332(f). Effect or Potential Effect: The WV CAD does not have proper internal controls in place to ensure policies and procedures surrounding subrecipient monitoring compliance requirements are in effect. The WV CAD does not have evidence to support that all subrecipients that were required to be audited were done so properly; therefore, this could result in subrecipients required to be audited not having an audit completed. Questioned Costs: N/A Context: Total expenditures and total subrecipient expenditures for the Low-Income Home Energy Assistance program for the year ended June 30, 2023, were $78,229,389 and $17,209,504, respectively. There were 16 total subrecipients and all 5 selected for testing were unable to provide information to support due diligence procedures over subrecipients. Identification as a Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the WV CAD management review policies and procedures for sufficiency and commit appropriate personnel to subrecipient monitoring to ensure they are in compliance with all federal requirements. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
2023–055 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Homeland Security Disaster Grants – Public Assistance (Presidentially Declared Disasters) 97.036, Grant Award FEMA–4273-DR–WV, Grant Award FEMA–4331-DR–WV, Grant Award FEMA–4359-DR–WV, Grant Award FEMA–4378-DR–WV, Grant Award FEMA–4455-DR–WV, Grant Award FEMA–4517-DR–WV, Grant Award FEMA–4603-DR–WV, Grant Award FEMA–4605-DR–WV Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that the West Virginia Division of Emergency Management (DEM) must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.332(b) requires that all pass-through entities must: (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F 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). 2 CFR 200.332(f) required that all pass-through entities must “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 Section 200.501.” Condition: The School Building Authority (SBA) did not perform subrecipient risk assessments. Additionally, SBA did not verify if subrecipients subject to be audited per 2 CFR 200.332(f) were audited as required. Cause: SBA does not have proper policies and procedures in place surrounding the subrecipient monitoring compliance requirements. Effect or Potential Effect: SBA is not in compliance with the subrecipient monitoring compliance requirements. Questioned Costs: Unknown Context: Total federal expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were $123,949,127 for the year ended June 30, 2023. SBA had two subrecipients with subrecipient expenditures totaling $45,615,370 for the year ended June 30, 2023. Identification as a Repeat Finding: Prior Year Finding 2022–043 Recommendation: We recommend that SBA implement policies and procedures surrounding subrecipient monitoring to ensure they are in compliance with the subrecipient monitoring compliance requirements. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
2023–055 SUBRECIPIENT MONITORING Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Homeland Security Disaster Grants – Public Assistance (Presidentially Declared Disasters) 97.036, Grant Award FEMA–4273-DR–WV, Grant Award FEMA–4331-DR–WV, Grant Award FEMA–4359-DR–WV, Grant Award FEMA–4378-DR–WV, Grant Award FEMA–4455-DR–WV, Grant Award FEMA–4517-DR–WV, Grant Award FEMA–4603-DR–WV, Grant Award FEMA–4605-DR–WV Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that the West Virginia Division of Emergency Management (DEM) must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.332(b) requires that all pass-through entities must: (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F 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). 2 CFR 200.332(f) required that all pass-through entities must “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 Section 200.501.” Condition: The School Building Authority (SBA) did not perform subrecipient risk assessments. Additionally, SBA did not verify if subrecipients subject to be audited per 2 CFR 200.332(f) were audited as required. Cause: SBA does not have proper policies and procedures in place surrounding the subrecipient monitoring compliance requirements. Effect or Potential Effect: SBA is not in compliance with the subrecipient monitoring compliance requirements. Questioned Costs: Unknown Context: Total federal expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were $123,949,127 for the year ended June 30, 2023. SBA had two subrecipients with subrecipient expenditures totaling $45,615,370 for the year ended June 30, 2023. Identification as a Repeat Finding: Prior Year Finding 2022–043 Recommendation: We recommend that SBA implement policies and procedures surrounding subrecipient monitoring to ensure they are in compliance with the subrecipient monitoring compliance requirements. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Emergency Rental Assistance Program Assistance Listing Number: 21.027 and 21.023 Federal Award Identification Numberand Year: ALN 21.027 -Pub. L. No. 117-2 2021 ALN 21.023 -ERA0335 2021 Award Period: ALN 21.027 - 5/10/2021 - 12/31/2026 ALN 21.023 - 1/20/2021 - 9/30/2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to§ 200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.331 Subrecipient and contractor determinations of 2 CFR Part 200, a pass-through entity must make case-by case determinations whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. According to § 200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must: • Evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. • 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. • Verify that every subrecipient is audited as required by Subpart F ohhis 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. • Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. According to the City's subrecipient monitoring policies and procedures, monitoring of subrecipients shall be conducted as often as may be required at the discretion of the Community Development Division or at least once per program year. An annual Risk Assessment will be completed to determine a ranking for the activity. The Risk Assessment ranking score will determine whether a monitoring review will occur. According to the City's Sub-recipient Agreement, the Sub-recipient will provide to the Department of Family and Community Services cumulative quarterly program performance reports covering the Services provided under this Agreement. Reports are due no later than fifteen (15) days after the end of the reporting quarter, and shall be in accordance with City of Albuquerque reporting instructions. Condition: During our testing, it was noted that the City did not follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Management's Progress for Repeat Findings: This is a repeated and modified.finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, we noted the following exceptions related to subrecipient monitoring. ALN 21.027 • For one of the five subrecipients, the City did not utilize the risk assessment tool specific to ARPA which does have a different risk assessment ranking score determining the monitoring of the subrecipient. The City did, however, perform a monitoring visit for the subrecipient. • For one of the five subrecipients, the City was unable to locate the subrecipient/contract determination worksheet. • For one of the five subrecipients, the City was unable to locate the quarterly program performance reports submitted by the subrecipient. ALN 21.023 • For one of the five subrecipients, the most recent annual audit report for the year ended June 30, 2022 was not reviewed by the City nor included in the risk assessment. Cause: The City does not have sufficient internal controls to ensure appropriate risk assessment and subrecipient monitoring. Effect: The auditor noted instances of noncompliance. Recommendation: The City has developed standard City-wide subrecipient management and monitoring policies and procedures effective June 2023. We recommend the City design controls to ensure departments are abiding by the subrecipient management and monitoring policies and procedures including Individual departments that develop their own department specific and/or grant-specific subrecipient management policies and procedures. Management Response: The City agrees with the finding. The City's Grant Administrator will provide training to each City department which currently oversees subrecipients, ensuring that all department staff understand general and ARPA-specific subrecipient requirements. Additionally, the Grant Administrator will review City departments' subrecipient management checklists to ensure all required documentation is obtained from subrecipients and reviewed as required. This will be complete by June 30, 2024. Timeline and Responsible Position: June 2024 - Grants Administrator
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Emergency Rental Assistance Program Assistance Listing Number: 21.027 and 21.023 Federal Award Identification Numberand Year: ALN 21.027 -Pub. L. No. 117-2 2021 ALN 21.023 -ERA0335 2021 Award Period: ALN 21.027 - 5/10/2021 - 12/31/2026 ALN 21.023 - 1/20/2021 - 9/30/2022 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to§ 200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.331 Subrecipient and contractor determinations of 2 CFR Part 200, a pass-through entity must make case-by case determinations whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. According to § 200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must: • Evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. • 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. • Verify that every subrecipient is audited as required by Subpart F ohhis 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. • Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. According to the City's subrecipient monitoring policies and procedures, monitoring of subrecipients shall be conducted as often as may be required at the discretion of the Community Development Division or at least once per program year. An annual Risk Assessment will be completed to determine a ranking for the activity. The Risk Assessment ranking score will determine whether a monitoring review will occur. According to the City's Sub-recipient Agreement, the Sub-recipient will provide to the Department of Family and Community Services cumulative quarterly program performance reports covering the Services provided under this Agreement. Reports are due no later than fifteen (15) days after the end of the reporting quarter, and shall be in accordance with City of Albuquerque reporting instructions. Condition: During our testing, it was noted that the City did not follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Management's Progress for Repeat Findings: This is a repeated and modified.finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, we noted the following exceptions related to subrecipient monitoring. ALN 21.027 • For one of the five subrecipients, the City did not utilize the risk assessment tool specific to ARPA which does have a different risk assessment ranking score determining the monitoring of the subrecipient. The City did, however, perform a monitoring visit for the subrecipient. • For one of the five subrecipients, the City was unable to locate the subrecipient/contract determination worksheet. • For one of the five subrecipients, the City was unable to locate the quarterly program performance reports submitted by the subrecipient. ALN 21.023 • For one of the five subrecipients, the most recent annual audit report for the year ended June 30, 2022 was not reviewed by the City nor included in the risk assessment. Cause: The City does not have sufficient internal controls to ensure appropriate risk assessment and subrecipient monitoring. Effect: The auditor noted instances of noncompliance. Recommendation: The City has developed standard City-wide subrecipient management and monitoring policies and procedures effective June 2023. We recommend the City design controls to ensure departments are abiding by the subrecipient management and monitoring policies and procedures including Individual departments that develop their own department specific and/or grant-specific subrecipient management policies and procedures. Management Response: The City agrees with the finding. The City's Grant Administrator will provide training to each City department which currently oversees subrecipients, ensuring that all department staff understand general and ARPA-specific subrecipient requirements. Additionally, the Grant Administrator will review City departments' subrecipient management checklists to ensure all required documentation is obtained from subrecipients and reviewed as required. This will be complete by June 30, 2024. Timeline and Responsible Position: June 2024 - Grants Administrator
2023-104: Obtain Reasonable Assurance over Contractor Compliance with Program Regulations Applicable to: Department of Social Services Prior Year Finding Number: N/A Type of Finding: Internal Control and Compliance Severity of Deficiency: Material Weakness Information System Security Control Family: N/A ALPT or Cluster Name and ALN: Low-Income Household Water Assistance Program (LIHWAP) - 93.499 Federal Award Number and Year: 2101VALWC1 - 2023 Name of Federal Agency: U.S. Department of Health and Human Services Type of Compliance Requirement - Criteria: Eligibility - 2 CFR § 200.303(a); 2 CFR § 200.501(g) Known Questioned Costs: $0 Social Services cannot provide reasonable assurance that its contractor administered the Low-Income Household Water Assistance Program (LIHWAP) in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Reasonable assurance is a high, but not absolute, level of assurance that the entity and its contractors have complied with federal laws and regulations. The United States Department of Health and Human Services awarded approximately $25 million to Social Services to administer the LIHWAP federal grant program. The objective of the LIHWAP federal grant program is to meet unprecedented water services needs that arose during the COVID-19 pandemic and provide quick intervention to help the people facing high water or wastewater costs compared to their income in resuming and/or maintaining their home water or wastewater services. Social Services partnered with a for-profit contractor to administer the program on its behalf due to resource limitations and the need to provide this assistance to individuals as quickly as possible. Through its contractual agreement, Social Services assumed ultimate responsibility for program compliance and incorporated certain measures into its contractual agreement to maintain compliance with federal laws and regulations. Specifically, Social Services was to agree on performance self-assessment criteria with the contractor within 30 calendar days of the execution of the project start date, then have the contractor prepare a monthly self-assessment to report on such criteria. Social Services then had ten business days, after the receipt of the contractor’s self-assessment, to audit the results of the contractor’s service level obligations and performance requirements and discuss any discrepancies with the contractor to determine if invoice or payment adjustments were necessary. Because of the fast-paced nature of the program and the need to provide the assistance to individuals as quickly as possible, Social Services was unable to agree on the performance criteria with the contractor. As a result, Social Services did not receive the monthly self-assessments from the contractor and audit them in accordance with the contractual agreement. While Social Services did have on-going discussions with the contractor about program compliance and did perform periodic reviews of applicant records, these reviews did not follow a systematic process that provides reasonable assurance over the contractor’s compliance with program regulations. Title 2 CFR § 200.501(g) states that the auditee is responsible for reviewing the contractor’s records to determine program compliance. Additionally, 2 CFR § 200.303(a) states that non-federal entities 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. Since Social Services has not implemented the contractual provisions related to the vendor’s self-assessment reporting and performance auditing, we are unable to audit Social Services' compliance for the LIHWAP federal grant program and must disclaim an opinion on compliance for the program in the Commonwealth's Single Audit report. We also believe this matter represents a material weakness in internal control over compliance because there is a reasonable possibility that material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis. The contract between Social Services and the contractor ends on December 31, 2023. Thereafter, the contractor will transfer program records to Social Services within the subsequent months. Social Services has until June 2024 to close out the LIHWAP federal grant program and should fulfill its responsibilities for auditing the contractor’s records for compliance before it closes the LIHWAP grant with the United States Department of Health and Human Services. Therefore, Social Services should implement an audit process that provides reasonable assurance that the contractor administered the LIHWAP federal grant program in accordance with federal statutes, regulations, and the terms and conditions of the federal award before it closes the grant award. Additionally, Social Services’ Executive Team should oversee the implementation of the audit process. Views of Responsible Officials: Views of responsible officials are in the report related to their agency, which can be found at www.apa.virginia.gov. In summary, the views of responsible officials in the agency report do not express a disagreement with the finding.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Subrecipient Monitoring Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, material noncompliance related to the COVID-19 - Education Stabilization Fund (ESF) funds passed through to subrecipients. The School Corporation received and passed through to subrecipients $420,500 of ESF funds. The School Corporation is to clearly identify the award and applicable requirements to the subrecipients, evaluate the risk of noncompliance related to the subrecipients to determine appropriate monitoring of the subaward, and monitor the activities of the subrecipients to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. The School Corporation did not enter into an agreement with the subrecipients. As such there is no agreement between the School Corporation and the subrecipients that clearly identifies the award as a subaward or includes all the required data elements. In addition, the School Corporation did not have any policies or procedures in place to evaluate the subrecipients' risk of noncompliance or to monitor the activity of the subrecipients. Per inquiry of the School Corporation, it was determined an evaluation of the risk of noncompliance for the subrecipients was not completed, nor did the subrecipients' files support any such evaluation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.332 states: "All pass-through entities must: INDIANA STATE BOARD OF ACCOUNTS 18 WEST LAFAYETTE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and include the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward notification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; INDIANA STATE BOARD OF ACCOUNTS 19 WEST LAFAYETTE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) 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; (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 passthrough entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis 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). (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (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 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. INDIANA STATE BOARD OF ACCOUNTS 20 WEST LAFAYETTE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 programrelated 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. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. INDIANA STATE BOARD OF ACCOUNTS 21 WEST LAFAYETTE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the School Corporation did not properly evaluate the subrecipients risk of noncompliance or adequately monitor the subrecipients. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, including segregation of duties, to evaluate the subrecipients risk of noncompliance and adequately monitor the subrecipients. Additionally, policies and procedures should be implemented to ensure appropriate reviews, approvals, and oversight are taking place, as needed, to evaluate and monitor its subrecipients. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2301CAFOST and 2023, 2201CAFOST and 2022 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. • 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). • 2 CFR 200.332(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 the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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. The California Department of Social Services further clarifies in its County Fiscal Letter No. 22/23-91 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any follow-up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: The Social Services Agency (SSA) did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring or for subrecipient monitoring for the Foster Care program. Additionally, the following information was not provided at the time of the subaward for ten (10) of fourteen (14) subawards selected for testing from the SSA’s for the Foster Care program: • Subrecipient’s unique entity identifier • Federal award identification number • Federal award date of award to recipient by the Federal agency • Subaward period of performance • Amount of federal funds obligated to the subrecipient • Amount of federal funds committed to the subrecipient • Federal award project description • Name of federal awarding agency • CFDA/Assistance Listing number • Identification of whether the award is research and development • Indirect cost rate During our testing, we noted for four (4) of fourteen (14) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County’s policy was to verify the subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA’s procedures did not consistently ensure that the required award information and applicable requires were communicated to the subrecipients. The SSA did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the SSA did not maintain documentation of their verification that every subrecipient is audited, as required. Additionally, the SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Additionally, the County’s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of fourteen (14) out of seventy (70) subrecipients were sampled, which included seven (7) FFA, and seven (7) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2022-002,2022-005 and 2022-006. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. We recommend that the County adhere to their procedures requiring documentation of the SAM clearance prior to entering the contract. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2301CAFOST and 2023, 2201CAFOST and 2022 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. • 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). • 2 CFR 200.332(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 the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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. The California Department of Social Services further clarifies in its County Fiscal Letter No. 22/23-91 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any follow-up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: The Social Services Agency (SSA) did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring or for subrecipient monitoring for the Foster Care program. Additionally, the following information was not provided at the time of the subaward for ten (10) of fourteen (14) subawards selected for testing from the SSA’s for the Foster Care program: • Subrecipient’s unique entity identifier • Federal award identification number • Federal award date of award to recipient by the Federal agency • Subaward period of performance • Amount of federal funds obligated to the subrecipient • Amount of federal funds committed to the subrecipient • Federal award project description • Name of federal awarding agency • CFDA/Assistance Listing number • Identification of whether the award is research and development • Indirect cost rate During our testing, we noted for four (4) of fourteen (14) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County’s policy was to verify the subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA’s procedures did not consistently ensure that the required award information and applicable requires were communicated to the subrecipients. The SSA did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the SSA did not maintain documentation of their verification that every subrecipient is audited, as required. Additionally, the SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Additionally, the County’s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of fourteen (14) out of seventy (70) subrecipients were sampled, which included seven (7) FFA, and seven (7) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2022-002,2022-005 and 2022-006. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. We recommend that the County adhere to their procedures requiring documentation of the SAM clearance prior to entering the contract. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2301CAFOST and 2023, 2201CAFOST and 2022 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. • 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). • 2 CFR 200.332(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 the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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. The California Department of Social Services further clarifies in its County Fiscal Letter No. 22/23-91 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any follow-up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: The Social Services Agency (SSA) did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring or for subrecipient monitoring for the Foster Care program. Additionally, the following information was not provided at the time of the subaward for ten (10) of fourteen (14) subawards selected for testing from the SSA’s for the Foster Care program: • Subrecipient’s unique entity identifier • Federal award identification number • Federal award date of award to recipient by the Federal agency • Subaward period of performance • Amount of federal funds obligated to the subrecipient • Amount of federal funds committed to the subrecipient • Federal award project description • Name of federal awarding agency • CFDA/Assistance Listing number • Identification of whether the award is research and development • Indirect cost rate During our testing, we noted for four (4) of fourteen (14) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County’s policy was to verify the subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA’s procedures did not consistently ensure that the required award information and applicable requires were communicated to the subrecipients. The SSA did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the SSA did not maintain documentation of their verification that every subrecipient is audited, as required. Additionally, the SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Additionally, the County’s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of fourteen (14) out of seventy (70) subrecipients were sampled, which included seven (7) FFA, and seven (7) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2022-002,2022-005 and 2022-006. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. We recommend that the County adhere to their procedures requiring documentation of the SAM clearance prior to entering the contract. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2301CAFOST and 2023, 2201CAFOST and 2022 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. • 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). • 2 CFR 200.332(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 the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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. The California Department of Social Services further clarifies in its County Fiscal Letter No. 22/23-91 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any follow-up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: The Social Services Agency (SSA) did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring or for subrecipient monitoring for the Foster Care program. Additionally, the following information was not provided at the time of the subaward for ten (10) of fourteen (14) subawards selected for testing from the SSA’s for the Foster Care program: • Subrecipient’s unique entity identifier • Federal award identification number • Federal award date of award to recipient by the Federal agency • Subaward period of performance • Amount of federal funds obligated to the subrecipient • Amount of federal funds committed to the subrecipient • Federal award project description • Name of federal awarding agency • CFDA/Assistance Listing number • Identification of whether the award is research and development • Indirect cost rate During our testing, we noted for four (4) of fourteen (14) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County’s policy was to verify the subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA’s procedures did not consistently ensure that the required award information and applicable requires were communicated to the subrecipients. The SSA did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the SSA did not maintain documentation of their verification that every subrecipient is audited, as required. Additionally, the SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Additionally, the County’s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of fourteen (14) out of seventy (70) subrecipients were sampled, which included seven (7) FFA, and seven (7) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2022-002,2022-005 and 2022-006. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. We recommend that the County adhere to their procedures requiring documentation of the SAM clearance prior to entering the contract. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: 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. * * * * (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[.] * * * * (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 § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (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. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: 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. * * * * (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[.] * * * * (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 § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (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. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: 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. * * * * (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[.] * * * * (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 § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (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. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: 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. * * * * (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[.] * * * * (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 § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (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. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: 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. * * * * (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[.] * * * * (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 § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (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. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: AL 97.036 – Disaster Grants - Public Assistance (Presidentially Declared Disasters) – Subrecipient Monitoring Grant Number & Year: All open, including 4420-DR-NE, declared March 21, 2019 Federal Grantor Agency: U.S. Department of Homeland Security Criteria: 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the 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. * * * * (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, 2023) 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 . . .” Per Chapter VII, Section B, of the Agency’s 2023 Annual Administrative Plan for the Public Assistance Program, it is the State’s responsibility to review Single audits completed by subrecipients and to ensure appropriate action is taken for adverse findings. A good internal control plan requires procedures to ensure subrecipient audits are reviewed timely. Condition: The Agency did not ensure subrecipient Single Audits were obtained timely. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The Agency utilizes a spreadsheet to track whether subrecipients obtain Single Audits when required. Additionally, the Agency sends letters to all subrecipients requiring them to respond on whether they were required to obtain a Single Audit. However, the Agency did not complete these processes during fiscal year 2023. We selected six subrecipients for testing that would have required a Single Audit be issued during State fiscal year 2023 based on the amount of funds they received from the Agency. For all six subrecipients tested, the Agency had not verified whether or not the subrecipients obtained Single Audits prior to our inquiry in December 2023. One of the six subrecipients appears to have required a Single Audit because it received $1,261,565 in disaster grant funds passed through the Agency during fiscal year 2022, but it did not obtain one. Cause: According to Agency representatives, the process was not completed due to a severe lack of staffing. 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 reviewed timely. Management Response: Due to the Agency’s extreme staffing shortage which has persisted for two years, NEMA has had to prioritize workload. This has been particularly acute with Federal Aid Administrators to whom the tasks of subrecipient monitoring fall. Several projects slipped the normal timeframes for completion.
Various Agencies Finding 2023 – 024: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 – Child Nutrition Cluster (including COVID-19) ALN 10.565, 10.568, and 10.569 – Food Distribution Cluster ALN 10.557 – WIC Special Supplemental Nutrition Program for Women, Infants, and Children ALN 10.558 – Child and Adult Care Food Program ALN 84.010 – Title I Grants to Local Educational Agencies ALN 84.027 and 84.173¬ – Special Education Cluster (IDEA) (including COVID-19) ALN 84.367 – Supporting Effective Instruction State Grants 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 ALN 84.425U – COVID-19 – Education Stabilization Fund - ARP ESSER ALN 84.425V – COVID-19 – Education Stabilization Fund - ARP EANS ALN 93.044, 93.045, and 93.053 – Aging Cluster (including COVID-19) ALN 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth’s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2022-014) Federal Grant Number(s) and Year(s): 2101PACMC6 (4/01/2021 – 9/30/2024), 2101PAHDC5 (12/27/2020 – 9/30/2023), 2101PAHDC6 (4/01/2021 – 9/30/2024), 2101PAOACM (10/01/2020 – 9/30/2023), 2101PAOAHD (10/01/2020 – 9/30/2023), 2101PAOANS (10/01/2020 – 9/30/2023), 2101PAOASS (10/01/2020 – 9/30/2023), 2101PAPHC6 (4/01/2021 – 9/30/2024), 2101PASSC6 (4/01/2021 – 9/30/2024), 2101PAVAC5 (4/01/2021 – 9/30/2023), 2201PAOACM (10/01/2021 – 9/30/2023), 2201PAOAHD (10/01/2021 – 9/30/2023), 2201PAOANS (10/01/2021 – 9/30/2023), 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), 221PA305N1099 (10/01/2021 – 9/30/2022), 231PA305N1099 (10/01/2022 – 9/30/2023), 221PA365N8903 (1/01/2022 – 9/30/2023), 231PA365N8903 (10/01/2022 – 9/30/2024), 231PA305L1603 (10/01/2022 – 9/30/2023), 221PA305L1603 (10/01/2021 – 9/30/2022), 221PA825Y8005 (10/01/2021 – 9/30/2022), 231PA825Y8005 (10/01/2022 – 9/30/2023), 221PA825Y8105 (10/01/2021 – 9/30/2022), 231PA825Y8105 (10/01/2022 – 9/30/2023), 201PA715W5003 (10/01/2019 – 9/30/2023), 211PA715W5003 (10/01/2020 – 9/30/2024), 221PA705W1003 (10/01/2021 – 9/30/2022), 221PA705W1006 (10/01/2021 – 9/30/2022), 221PA715W5003 (10/01/2021 – 9/30/2024), 231PA705W1003 (10/01/2022 – 9/30/2023), 231PA705W1006 (10/01/2022 – 9/30/2023), 231PA715W5003 (10/01/2022 – 9/30/2025), 221PA305N1099 (10/01/2021 – 9/30/2022), 231PA305N1099 (10/01/2022 – 9/30/2023), 221PA315N1050 (10/01/2021 – 9/30/2023), 231PA315N1050 (10/01/2022 – 9/30/2024), 221PA305N2020 (10/01/2021 – 9/30/2022), 231PA305N2020 (10/01/2022 – 9/30/2023), S010A190038 (7/01/2019 – 9/30/2022), S010A200038 (7/01/2020 – 9/30/2022), S010A210038 (7/01/2021 – 9/30/2022), S010A220038 (7/01/2022 – 9/30/2024), S367A150051 (7/01/2015 – 9/30/2017), S367A190051 (7/01/2019 – 9/30/2021), S367A200051 (7/01/2020 – 9/30/2022), S367A210051 (7/01/2021 – 9/30/2023), S367A220051 (7/01/2022 – 9 /30/2024), H027A200093 (7/01/2020 – 9/30/2022), H027A210093 (7/01/2021 – 9/30/2023), H027A220093 (7/01/2022 – 9/30/2024), H027X210093 (7/01/2021 – 9/30/2023), H173A200090 (7/01/2020 – 9/30/2022), H173A210090 (7/01/2021 – 9/30/2023), H173A220090 (7/01/2022 – 9/30/2024), H173X210090 (7/01/2021 – 9/30/2023), S425W210039 (4/23/2021 – 9/30/2024), S425U210028 (3/24/2021 – 9/30/2023), S425D210028 (1/05/2021 – 9/30/2023), S425C200013 (5/18/2020 – 4/01/2024), S425R210037 (3/13/2020 – 9/30/2023), S425V210037 (11/16/2021 – 9/30/2023), S425C210013 (3/13/2020 – 9/30/2023), S425D200028 (3/13/2020 – 9/30/2022), NU50CK000527 (8/01/2019 – 7/31/2024) Finding 2023 – 024: (continued) Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance 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) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance 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 in order 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, 2023 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, 2022 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2023. We also evaluated the Commonwealth’s review of 44 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, 2023 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 10.5 months after the FAC MDL start date for the one audit report with findings. • 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 12 months to over 18 months after the FAC MDL start date for three out of three audit reports with findings. There was also a delay in PDA’s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Our testing disclosed one audit report submitted to the FAC over nine months late that included $19.4 million in subrecipient expenditures passed through PDA. In addition, our testing disclosed that PDA subgranted federal funds totaling approximately $4.8 million to five subrecipients during the fiscal year ended June 30, 2022, for which Single Audits were not submitted to the FAC as of our January 2024 testing date. This was over 16 or 10 months after the respective, September 30, 2022 or March 31, 2023 due dates. • Department of Education (PDE): The time period for making a management decision on findings was approximately 9.3 to over 16.9 months after the FAC MDL start date for 14 out of 22 audit reports with findings. One of the 14 audit reports was improperly classified on PDE’s audit tracking list as not having federal award findings. There were additional audit reports with findings listed on PDE’s audit tracking list where management decisions were not made timely. • Department of Health (DOH): The time period for making a management decision on findings was over 11 months after the FAC MDL start date for two out of two audit reports with findings. One audit report with the late management decision on findings was excluded from DOH’s tracking list. Finding 2023 – 024: (continued) Criteria: 2 CFR Section 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: (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 Section 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 Section 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 Section 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]. Finding 2023 – 024: (continued) 2 CFR Section 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. (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. Finding 2023 – 024: (continued) (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. 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. (7) 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. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR Section 200.339 and Commonwealth Management Directive 325.08 in order to ensure compliance with federal audit submission requirements. 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 and the late Single Audit report submissions, 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. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Finding 2023 – 024: (continued) Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR Section 200.339 and Commonwealth Management Directive 325.08. DOH Response: DOH agrees with the finding. PDOA Response: PDOA agrees with the finding. PDA Response: PDA agrees with the finding and will be hiring a complement position to ensure compliance in the future. PDE Response: PDE agrees with the finding. Questioned Costs: The amount of questioned costs cannot be determined.
Various Agencies Finding 2023 – 024: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 – Child Nutrition Cluster (including COVID-19) ALN 10.565, 10.568, and 10.569 – Food Distribution Cluster ALN 10.557 – WIC Special Supplemental Nutrition Program for Women, Infants, and Children ALN 10.558 – Child and Adult Care Food Program ALN 84.010 – Title I Grants to Local Educational Agencies ALN 84.027 and 84.173¬ – Special Education Cluster (IDEA) (including COVID-19) ALN 84.367 – Supporting Effective Instruction State Grants 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 ALN 84.425U – COVID-19 – Education Stabilization Fund - ARP ESSER ALN 84.425V – COVID-19 – Education Stabilization Fund - ARP EANS ALN 93.044, 93.045, and 93.053 – Aging Cluster (including COVID-19) ALN 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth’s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2022-014) Federal Grant Number(s) and Year(s): 2101PACMC6 (4/01/2021 – 9/30/2024), 2101PAHDC5 (12/27/2020 – 9/30/2023), 2101PAHDC6 (4/01/2021 – 9/30/2024), 2101PAOACM (10/01/2020 – 9/30/2023), 2101PAOAHD (10/01/2020 – 9/30/2023), 2101PAOANS (10/01/2020 – 9/30/2023), 2101PAOASS (10/01/2020 – 9/30/2023), 2101PAPHC6 (4/01/2021 – 9/30/2024), 2101PASSC6 (4/01/2021 – 9/30/2024), 2101PAVAC5 (4/01/2021 – 9/30/2023), 2201PAOACM (10/01/2021 – 9/30/2023), 2201PAOAHD (10/01/2021 – 9/30/2023), 2201PAOANS (10/01/2021 – 9/30/2023), 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), 221PA305N1099 (10/01/2021 – 9/30/2022), 231PA305N1099 (10/01/2022 – 9/30/2023), 221PA365N8903 (1/01/2022 – 9/30/2023), 231PA365N8903 (10/01/2022 – 9/30/2024), 231PA305L1603 (10/01/2022 – 9/30/2023), 221PA305L1603 (10/01/2021 – 9/30/2022), 221PA825Y8005 (10/01/2021 – 9/30/2022), 231PA825Y8005 (10/01/2022 – 9/30/2023), 221PA825Y8105 (10/01/2021 – 9/30/2022), 231PA825Y8105 (10/01/2022 – 9/30/2023), 201PA715W5003 (10/01/2019 – 9/30/2023), 211PA715W5003 (10/01/2020 – 9/30/2024), 221PA705W1003 (10/01/2021 – 9/30/2022), 221PA705W1006 (10/01/2021 – 9/30/2022), 221PA715W5003 (10/01/2021 – 9/30/2024), 231PA705W1003 (10/01/2022 – 9/30/2023), 231PA705W1006 (10/01/2022 – 9/30/2023), 231PA715W5003 (10/01/2022 – 9/30/2025), 221PA305N1099 (10/01/2021 – 9/30/2022), 231PA305N1099 (10/01/2022 – 9/30/2023), 221PA315N1050 (10/01/2021 – 9/30/2023), 231PA315N1050 (10/01/2022 – 9/30/2024), 221PA305N2020 (10/01/2021 – 9/30/2022), 231PA305N2020 (10/01/2022 – 9/30/2023), S010A190038 (7/01/2019 – 9/30/2022), S010A200038 (7/01/2020 – 9/30/2022), S010A210038 (7/01/2021 – 9/30/2022), S010A220038 (7/01/2022 – 9/30/2024), S367A150051 (7/01/2015 – 9/30/2017), S367A190051 (7/01/2019 – 9/30/2021), S367A200051 (7/01/2020 – 9/30/2022), S367A210051 (7/01/2021 – 9/30/2023), S367A220051 (7/01/2022 – 9 /30/2024), H027A200093 (7/01/2020 – 9/30/2022), H027A210093 (7/01/2021 – 9/30/2023), H027A220093 (7/01/2022 – 9/30/2024), H027X210093 (7/01/2021 – 9/30/2023), H173A200090 (7/01/2020 – 9/30/2022), H173A210090 (7/01/2021 – 9/30/2023), H173A220090 (7/01/2022 – 9/30/2024), H173X210090 (7/01/2021 – 9/30/2023), S425W210039 (4/23/2021 – 9/30/2024), S425U210028 (3/24/2021 – 9/30/2023), S425D210028 (1/05/2021 – 9/30/2023), S425C200013 (5/18/2020 – 4/01/2024), S425R210037 (3/13/2020 – 9/30/2023), S425V210037 (11/16/2021 – 9/30/2023), S425C210013 (3/13/2020 – 9/30/2023), S425D200028 (3/13/2020 – 9/30/2022), NU50CK000527 (8/01/2019 – 7/31/2024) Finding 2023 – 024: (continued) Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance 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) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance 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 in order 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, 2023 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, 2022 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2023. We also evaluated the Commonwealth’s review of 44 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, 2023 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 10.5 months after the FAC MDL start date for the one audit report with findings. • 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 12 months to over 18 months after the FAC MDL start date for three out of three audit reports with findings. There was also a delay in PDA’s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Our testing disclosed one audit report submitted to the FAC over nine months late that included $19.4 million in subrecipient expenditures passed through PDA. In addition, our testing disclosed that PDA subgranted federal funds totaling approximately $4.8 million to five subrecipients during the fiscal year ended June 30, 2022, for which Single Audits were not submitted to the FAC as of our January 2024 testing date. This was over 16 or 10 months after the respective, September 30, 2022 or March 31, 2023 due dates. • Department of Education (PDE): The time period for making a management decision on findings was approximately 9.3 to over 16.9 months after the FAC MDL start date for 14 out of 22 audit reports with findings. One of the 14 audit reports was improperly classified on PDE’s audit tracking list as not having federal award findings. There were additional audit reports with findings listed on PDE’s audit tracking list where management decisions were not made timely. • Department of Health (DOH): The time period for making a management decision on findings was over 11 months after the FAC MDL start date for two out of two audit reports with findings. One audit report with the late management decision on findings was excluded from DOH’s tracking list. Finding 2023 – 024: (continued) Criteria: 2 CFR Section 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: (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 Section 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 Section 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 Section 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]. Finding 2023 – 024: (continued) 2 CFR Section 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. (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. Finding 2023 – 024: (continued) (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. 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. (7) 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. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR Section 200.339 and Commonwealth Management Directive 325.08 in order to ensure compliance with federal audit submission requirements. 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 and the late Single Audit report submissions, 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. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Finding 2023 – 024: (continued) Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR Section 200.339 and Commonwealth Management Directive 325.08. DOH Response: DOH agrees with the finding. PDOA Response: PDOA agrees with the finding. PDA Response: PDA agrees with the finding and will be hiring a complement position to ensure compliance in the future. PDE Response: PDE agrees with the finding. Questioned Costs: The amount of questioned costs cannot be determined.