Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Finding 2022-001 Federal Agency: Various Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Year: Programs active between July 1, 2021 ? June 30, 2022 Compliance requirement: Subrecipient Monitoring Finding Type: Significant Deficiency Criteria In accordance with 2 CFR 200.332(d), all pass-through entities must: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Pass-through entity monitoring of the subrecipient must include: ? Reviewing financial and programmatic (performance and special reports) required by the pass-through entity (PTE). ? 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 PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. ? 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 2 CFR 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. In accordance with 2 CFR 200.332(d), all pass-through entities must verify that every subrecipient is audited as required by Subpart F of 2 CFR 200.500 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. In accordance with 2 CFR 200.521(c) and (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. 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 Federal Audit Clearinghouse (FAC). In accordance with 2 CFR 200.501(h), since 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient?s compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits. Condition, including Perspective Lehigh University passed through $3,277,289 to its subrecipients in the research and development cluster (R&D cluster), which represents approximately 10% of total R&D cluster expenditures for the year ended June 30, 2022. As a pass-through entity, Lehigh University?s Office of Research and Special Projects (ORSP) is responsible for monitoring the activities and compliance of its subrecipients. Monitoring includes reviewing the compliance audit reports from its subrecipients as they become available through the federal audit clearinghouse to ascertain the existence of non-compliance and appropriate follow-up with the subrecipient to ensure timely and appropriate corrective action is taken to remediate the finding(s). Our procedures performed determined that the Office of Research and Special Projects (ORSP) did not complete the review of their compliance reports within six months of acceptance of the audit report by the FAC. Cause and Effect The ORSP lost two full time personnel in summer of 2020, one of whom was responsible for the review of the subrecipient compliance reports and issuing the management decision for any audit findings. That position was not filled until the December 2021 and no one else in ORSP completed these reviews during this timeframe. The lack of monitoring subrecipients timely could result in continuing to pass-through federal monies to a subrecipient who is not in compliance with federal compliance. Noncompliance by a subrecipient that is not identified and addressed timely could jeopardize the University?s receipt of future federal awards and public reputation. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes, finding 2021-001 Recommendation We recommend that Lehigh University strengthen its processes and controls to ensure the review of its subrecipient?s compliance reports is completed within six months of acceptance of the audit report by the FAC. Views of Responsible Officials Lehigh University accepts this finding. The review of fiscal year 2022 has been conducted and is complete for the review of those institutions who have submitted their audit reports to the Federal Audit Clearinghouse.
Assistance Listings number and name: 10.691 Good Neighbor Authority Award numbers and year: 22-GN-11030400-027 January 14, 2022 through January 12, 2027 Federal agency: U.S. Department of Agriculture (UDSA) Compliance requirements: Period of Performance Questioned costs: $42,555 Condition?Contrary to federal regulation and the County?s grant award with the U.S. Department of Agriculture (USDA), the County?s Flood Control District spent $42,555 on unallowable purchases that it requested and received reimbursement for as part of the program?s $1.4 million total expenditures. Specifically, for 1 of 2 transactions tested, the District spent $42,555 on construction-planning services for repairing flood damage before the time period the costs were allowed to be incurred and did not receive preapproval from the federal agency, as required. Effect?The USDA may require the County to reimburse the $42,555 in unallowable costs with other County monies and either require the County to return the monies or spend them on other allowable costs before the grant expiration date of January 12, 2027.1 Cause?Despite the County?s grant award with USDA specifying the period of performance requirements, the County?s existing polices to review reimbursement requests did not require verifying that preapprovals were obtained from the federal agency when costs were incurred before the grant award term?s start date. Criteria?Federal regulation and the County?s grant award terms and conditions with USDA allow the Department to charge only allowable costs incurred during the performance period, or January 14, 2022 through January 12, 2027, and require any costs incurred before the start date to be preapproved by the federal agency (2 Code of Federal Regulations [CFR] ?200.458 and USDA grant award terms ?AA). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR ?200.303). Recommendations?The County should: 1. Improve existing policies and procedures for federal grants by requiring the reviewer to verify that preapprovals were obtained from the federal agency when costs were incurred before the award term?s start date. 2. Request and obtain preapproval from the federal agency for all costs incurred outside the award term?s performance period. 3. Work with the U.S Department of Agriculture to resolve the $42,555 of program monies the District spent in violation of its federal award terms, which may involve returning monies to the federal agency.1 The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the County, takes appropriate and timely corrective action (2 CFR ?200.513[c]). Further, it requires that federal awarding agencies? management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR ?200.521).
Subrecipient Monitoring 2022-007 GENERAL INFORMATION: Grant Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Number: Assistance Listing #: 21.027 Federal Agency: Department of the Treasury CONDITION: We noted during our audit that the Randolph County Commission failed to properly monitor subrecipients. Specifically, there was no assurance that the allocated funds sent were expensed by the subrecipients. CRITERIA: 'Proper internal control over federal awards passed to subrecipients requires the establishment and maintenance of an effective system to provide reasonable assurance that the subrecipient is managing the federal award in compliance with federal statues, regulations, and terms and conditions of the federal award. 2 CFR Part 200.332 states, in part, that: "(a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes:(1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x)Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi)Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii)Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv)Indirect cost rate for the Federal award (including if the de minimis rate is charged) per ? 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (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 pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. (4) (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).... (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section ?200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward.... (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records." QUESTIONED COSTS: $163,617 CONTEXT: Disbursements totaling $163,617 were made to subrecipients without activities being monitored to ensure expenditures of the subaward were being used for authorized purposes and in accordance with the grant guidelines. CAUSE: The Randolph County Commission did not have procedures in place to ensure subrecipient monitoring requirements were performed. EFFECT: Failure to properly monitor subrecipients increases the likelihood of errors or irregularities not being prevented or detected in a timely manner. Additionally, the risk of unallowable activities and unallowable costs is significantly increased. Management failed to comply with all applicable, material compliance requirements of the grant agreement. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2021-002 RECOMMENDATION: The Randolph County Commission is directed to review these regulations and comply with the provisions set forth therein. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: We will comply and monitor subrecipient spending going forward.
Assistance Listings number and name 84.425F COVID-19 Education Stabilization Fund?Higher Education Emergency Relief Fund (HEERF) Institutional Portion Award number and years P425F201546-20B, May 6, 2020 through June 30, 2023 Federal agency U.S. Department of Education Compliance requirement(s) Allowable costs/cost principles Questioned costs $4,249,864 Condition?Contrary to federal guidance and regulations and the District?s federal indirect cost agreement, the District overcharged $4,249,864 of indirect costs to its HEERF program?s institutional portion during fiscal year 2022. Specifically, the District charged a total of $4,301,518, but its federal indirect cost agreement allowed it to charge no more than $51,654 when correctly applying and calculating the agreement?s base and allocation, thus it overcharged nearly $4.25 million. These unallowed indirect costs comprised 64 percent of the program?s total federal award expenditures for fiscal year 2022. Effect?The District?s spending $4,249,864 more on indirect costs than allowed resulted in less monies available to spend on allowable program costs for addressing institutional and student needs, such as defraying costs associated with COVID-19 (including lost revenue and payroll) and making additional financial grants to students. Also, the U.S. Department of Education may require the District to repay the misspent monies in accordance with Uniform Guidance requirements.1 Cause?The District?s administration reported to us that it misinterpreted its federal indirect cost agreement when applying and calculating its indirect cost base and allocation. Further, the District did not follow its procedures for receiving written confirmation from its grantor of its indirect cost calculation method. Criteria?District procedures require employees to follow what is stated in the grant award notice, and verify and receive written confirmation from its grantor of the calculation method when calculating indirect costs when calculating indirect costs (Yuma/La Paz Counties Community College District's Grants Desk Manual, Grant Indirect Costs). Additionally, federal guidance and regulations require the District to follow its federal indirect cost agreement to apply and calculate indirect costs allocated to federal programs at the specific percentages for specific costs that comprise the program?s base expenditures.2 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 Code of Federal Regulations [CFR] ?200.303). Recommendations?The District?s administration should: 1. Follow written procedures for applying and calculating indirect costs to its federal programs, including following and correctly applying the award?s base rate and allocation, which is stated in its grant award notice, and verifying and receiving written confirmation from its grantor of its calculation method when charging indirect costs to federal programs. 2. Work with the U.S. Department of Education to resolve the $4,249,864 of unallowable costs it allocated to the federal program. The District?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the District, takes appropriate and timely corrective action (2 CFR ?200.513[c]). Further, it requires that federal awarding agencies? management decisions clearly state whether the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR ?200.521). 2 U.S. Department of Education. (2021). Higher Education Emergency Relief Fund III?Frequently Asked Questions, Question 43. Retrieved 12/13/2022 from https://www2.ed.gov/about/offices/list/ope/arpfaq.pdf. Also, U.S. Office of Management and Budget. (2021). 2 CFR 200.414 and Appendix III to 2 CFR Part 200?Indirect (F&A) Costs Identification and Assignment, and Rate Determinations for Institutions of Higher Education. Retrieved 12/13/2022 from https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200#sg2.1.200_1411.sg11%22.
Assistance Listings number and name 84.425F COVID-19 Education Stabilization Fund?Higher Education Emergency Relief Fund (HEERF) Institutional Portion Award number and years P425F201546-20B, May 6, 2020 through June 30, 2023 Federal agency U.S. Department of Education Compliance requirement(s) Allowable costs/cost principles Questioned costs $4,249,864 Condition?Contrary to federal guidance and regulations and the District?s federal indirect cost agreement, the District overcharged $4,249,864 of indirect costs to its HEERF program?s institutional portion during fiscal year 2022. Specifically, the District charged a total of $4,301,518, but its federal indirect cost agreement allowed it to charge no more than $51,654 when correctly applying and calculating the agreement?s base and allocation, thus it overcharged nearly $4.25 million. These unallowed indirect costs comprised 64 percent of the program?s total federal award expenditures for fiscal year 2022. Effect?The District?s spending $4,249,864 more on indirect costs than allowed resulted in less monies available to spend on allowable program costs for addressing institutional and student needs, such as defraying costs associated with COVID-19 (including lost revenue and payroll) and making additional financial grants to students. Also, the U.S. Department of Education may require the District to repay the misspent monies in accordance with Uniform Guidance requirements.1 Cause?The District?s administration reported to us that it misinterpreted its federal indirect cost agreement when applying and calculating its indirect cost base and allocation. Further, the District did not follow its procedures for receiving written confirmation from its grantor of its indirect cost calculation method. Criteria?District procedures require employees to follow what is stated in the grant award notice, and verify and receive written confirmation from its grantor of the calculation method when calculating indirect costs when calculating indirect costs (Yuma/La Paz Counties Community College District's Grants Desk Manual, Grant Indirect Costs). Additionally, federal guidance and regulations require the District to follow its federal indirect cost agreement to apply and calculate indirect costs allocated to federal programs at the specific percentages for specific costs that comprise the program?s base expenditures.2 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 Code of Federal Regulations [CFR] ?200.303). Recommendations?The District?s administration should: 1. Follow written procedures for applying and calculating indirect costs to its federal programs, including following and correctly applying the award?s base rate and allocation, which is stated in its grant award notice, and verifying and receiving written confirmation from its grantor of its calculation method when charging indirect costs to federal programs. 2. Work with the U.S. Department of Education to resolve the $4,249,864 of unallowable costs it allocated to the federal program. The District?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the District, takes appropriate and timely corrective action (2 CFR ?200.513[c]). Further, it requires that federal awarding agencies? management decisions clearly state whether the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR ?200.521). 2 U.S. Department of Education. (2021). Higher Education Emergency Relief Fund III?Frequently Asked Questions, Question 43. Retrieved 12/13/2022 from https://www2.ed.gov/about/offices/list/ope/arpfaq.pdf. Also, U.S. Office of Management and Budget. (2021). 2 CFR 200.414 and Appendix III to 2 CFR Part 200?Indirect (F&A) Costs Identification and Assignment, and Rate Determinations for Institutions of Higher Education. Retrieved 12/13/2022 from https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200#sg2.1.200_1411.sg11%22.
Reference Number: 2022-011 Category of Finding: Subrecipient Monitoring Type of Finding: Material Weakness and Material Instance of Noncompliance State Administering Department: California Department of Public Health (Public Health) Assistance Listing Number: 93.323 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Number and Year: NU50CK000539; 2021 Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards: (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving cross-cutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section §200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501. (g) Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records. Condition Public Health did not establish a formal risk assessment process over its subrecipients of federal awards to determine the frequency and extent of subrecipient monitoring to be performed. While Public Health received reimbursement invoices from subrecipients, there did not appear to be other financial or programmatic monitoring to verify subrecipents compliance with applicable requirements. In addition, Public Health did not obtain Single Audit reports from those subrecipients as required. Identification as a Repeat Finding Finding 2021-014 was reported in the immediate prior year. Cause Procedures to perform the required subrecipient monitoring were not established nor performed by Public Health. Effect By not properly evaluating the risk of noncompliance, Public Health may inadvertently award grant funds to subrecipients who lack the necessary mechanisms or understanding to adhere to federal statutes. This increases the likelihood of noncompliance arising during the performance of the grant-funded activities. Furthermore, failure to perform monitoring procedures or obtain Single Audit reports increases the risk for not properly identifying subrecipient program control weaknesses, noncompliance, and performing sufficient follow-up on any subrecipient corrective action. Questioned Costs No questioned costs were identified. Context Disbursements to subrecipients for the ELC program totaled $301,107,041, or 31.0% of total reported program expenditures. Recommendation Public Health should establish and document formal procedures for conducting risk assessments of its subrecipients, including criteria for evaluating organizational capacity, financial stability, compliance history, and programmatic capabilities. Public Health should also develop and implement specific subrecipient monitoring procedures and establish a process for obtaining Single Audit reports from its subrecipients. Furthermore, a monitoring mechanism should be implemented to track compliance with the single audit mandate among subrecipients, including regular follow-ups and documentation of communication efforts. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Reference Number: 2021-014 Category of Finding: Subrecipient Monitoring Type of Finding: Material Weakness and Material Instance of Noncompliance State Administering Department: California Department of Public Health (Public Health) Assistance Listing Number: 93.323 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Number and Year: NU50CK000539; 2021 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (c) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section§200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501. (g) Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records. Condition: Public Health did not establish a formal risk assessment process over its subrecipients of federal awards to determine the frequency and extent of subrecipient monitoring to be performed. While Public Health received reimbursement invoices from subrecipients, there did not appear to be other financial or programmatic monitoring to verify subrecipents compliance with applicable requirements. In addition, Public Health did not obtain Single Audit reports from those subrecipients as required. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause: Public Health failed to identify and report its federal expenditures related to its subrecipient agreement with its bona fide agent. Consequently, required subrecipient monitoring procedures were not designed nor implemented by Public Health. Effect: By not properly evaluating the risk of noncompliance, Public Health may inadvertently award grant funds to subrecipients who lack the necessary mechanisms or understanding to adhere to federal statutes. This increases the likelihood of noncompliance arising during the implementation of the grant-funded activities. Furthermore, failure to perform monitoring procedures or obtain Single Audit reports increases the risk for not properly identifying subrecipient program control weaknesses, noncompliance, and performing sufficient follow-up on any subrecipient corrective action. Questioned Costs: No questioned costs were identified. Context: Disbursements to subrecipients for the ELC program totaled $367,405,431, or 76.5% of total reported program expenditures. Recommendation: Public Health should establish and document formal procedures for conducting risk assessments of its subrecipients, including criteria for evaluating organizational capacity, financial stability, compliance history, and programmatic capabilities. Public Health should also develop and implement specific subrecipient monitoring procedures and establish a process for obtaining single audit reports from its subrecipients. Furthermore, a monitoring mechanism should be implemented to track compliance with the single audit mandate among subrecipients, including regular follow-ups and documentation of communication efforts. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report
Reference Number: 2021-014 Category of Finding: Subrecipient Monitoring Type of Finding: Material Weakness and Material Instance of Noncompliance State Administering Department: California Department of Public Health (Public Health) Assistance Listing Number: 93.323 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Number and Year: NU50CK000539; 2021 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (c) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section§200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501. (g) Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records. Condition: Public Health did not establish a formal risk assessment process over its subrecipients of federal awards to determine the frequency and extent of subrecipient monitoring to be performed. While Public Health received reimbursement invoices from subrecipients, there did not appear to be other financial or programmatic monitoring to verify subrecipents compliance with applicable requirements. In addition, Public Health did not obtain Single Audit reports from those subrecipients as required. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause: Public Health failed to identify and report its federal expenditures related to its subrecipient agreement with its bona fide agent. Consequently, required subrecipient monitoring procedures were not designed nor implemented by Public Health. Effect: By not properly evaluating the risk of noncompliance, Public Health may inadvertently award grant funds to subrecipients who lack the necessary mechanisms or understanding to adhere to federal statutes. This increases the likelihood of noncompliance arising during the implementation of the grant-funded activities. Furthermore, failure to perform monitoring procedures or obtain Single Audit reports increases the risk for not properly identifying subrecipient program control weaknesses, noncompliance, and performing sufficient follow-up on any subrecipient corrective action. Questioned Costs: No questioned costs were identified. Context: Disbursements to subrecipients for the ELC program totaled $367,405,431, or 76.5% of total reported program expenditures. Recommendation: Public Health should establish and document formal procedures for conducting risk assessments of its subrecipients, including criteria for evaluating organizational capacity, financial stability, compliance history, and programmatic capabilities. Public Health should also develop and implement specific subrecipient monitoring procedures and establish a process for obtaining single audit reports from its subrecipients. Furthermore, a monitoring mechanism should be implemented to track compliance with the single audit mandate among subrecipients, including regular follow-ups and documentation of communication efforts. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report