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.
SUBRECIPIENT MONITORING The Department?s internal control structure does not ensure all subrecipients are monitored in accordance with federal requirements. Criteria: All pass-through entities must monitor subrecipients to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved (2 CFR 200.332(d) through (f)). A pass-through entity (PTE) is responsible for: During-the-Award Monitoring ? Monitoring the activities of the subrecipient (through reporting, site visits, regular contact or other means) as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special) reports required by the PTE. 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 PTE detected through audits, on-site reviews, and other means. 3. 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 PTE must verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR section 200.501 (2 CFR section 200.332(f)). Federal award recipients must determine whether each agreement entered into for the disbursement of federal program funds casts the entity receiving the funds in the role of a subrecipient or a contractor based on the following definitions (2 CFR 200.331): ? A subrecipient receives federal funds from a non-federal entity to carry out part of a federal program. The legal agreement between the two parties creates a federal assistance relationship commonly known as a sub-award. ? A contractor is an entity (dealer, distributor, merchant or other seller) who has a legal agreement with a non-federal entity to provide goods and services needed to carry out the program under the federal award. Condition: RIDOT passes federal awards through to many organization types, including municipalities, non-profits, and colleges/universities. The Department did not have documentation supporting the monitoring of three subrecipients, two of which are non-profits and one of which is a university. The Department did not review the audit reports for six subrecipients or have any documentation supporting its determination as to whether the subrecipients were required to have an audit as required by 2 CFR 200 subpart F. RIDOT identified three vendors providing goods or services to the department as subrecipients. Cause: Policies, procedures and established controls do not encompass all federal requirements. Effect: Monitoring controls and procedures may be insufficient to ensure that subrecipients are complying with applicable program regulations and requirements. Questioned Costs: None Valid Statistical Sample: Not Applicable RECOMMENDATION 2022-050 Enhance policies, procedures, and controls over subrecipient monitoring to ensure compliance with 2 CFR sections 200.332(d) through (f).
SUBRECIPIENT MONITORING The Department?s internal control structure does not ensure all subrecipients are monitored in accordance with federal requirements. Criteria: All pass-through entities must monitor subrecipients to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved (2 CFR 200.332(d) through (f)). A pass-through entity (PTE) is responsible for: During-the-Award Monitoring ? Monitoring the activities of the subrecipient (through reporting, site visits, regular contact or other means) as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Subaward monitoring must include the following: 1. Reviewing financial and programmatic (performance and special) reports required by the PTE. 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 PTE detected through audits, on-site reviews, and other means. 3. 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 PTE must verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR section 200.501 (2 CFR section 200.332(f)). Federal award recipients must determine whether each agreement entered into for the disbursement of federal program funds casts the entity receiving the funds in the role of a subrecipient or a contractor based on the following definitions (2 CFR 200.331): ? A subrecipient receives federal funds from a non-federal entity to carry out part of a federal program. The legal agreement between the two parties creates a federal assistance relationship commonly known as a sub-award. ? A contractor is an entity (dealer, distributor, merchant or other seller) who has a legal agreement with a non-federal entity to provide goods and services needed to carry out the program under the federal award. Condition: RIDOT passes federal awards through to many organization types, including municipalities, non-profits, and colleges/universities. The Department did not have documentation supporting the monitoring of three subrecipients, two of which are non-profits and one of which is a university. The Department did not review the audit reports for six subrecipients or have any documentation supporting its determination as to whether the subrecipients were required to have an audit as required by 2 CFR 200 subpart F. RIDOT identified three vendors providing goods or services to the department as subrecipients. Cause: Policies, procedures and established controls do not encompass all federal requirements. Effect: Monitoring controls and procedures may be insufficient to ensure that subrecipients are complying with applicable program regulations and requirements. Questioned Costs: None Valid Statistical Sample: Not Applicable RECOMMENDATION 2022-050 Enhance policies, procedures, and controls over subrecipient monitoring to ensure compliance with 2 CFR sections 200.332(d) through (f).
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).
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
?See Schedule of Findings and Questioned Costs for chart/table? CONDITION The Department of Public Instruction did not ensure all subrecipients either submitted a Single Audit report or certification form identifying a Single Audit is not required. In addition, the Department did not issue management decisions on auditing findings within 6 months or ensure that timely and appropriate corrective action was taken in all applicable instances. We selected a sample of 60 subrecipients of the total 795 in our population for testing. During our testing, 6 of the 60 subrecipients did not submit a certification form identifying whether a Single Audit was required. The Department indicated that a Single Audit report was not received but we are unable to determine whether one was required. For 4 additional subrecipients, the Department did not receive a Single Audit, issue management decisions on auditing findings within 6 months, or ensure appropriate corrective action was taken. The Department did track all of their subrecipients in a spreadsheet that captured information relating to when their certified Federal expenditure information was received as well as if a single audit is required of them. However, due to the errors noted in receiving this information as well as following up with completed single audits in a timely manner in our sample tested, it was determined that this spreadsheet was not being fully utilized. CRITERIA 2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2 CFR 200 Subpart F. 2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity through audits, on-site reviews, and other means. 2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of acceptance of the audit report by the Federal Audit Clearinghouse. 2 CFR 200.303(a) states that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CAUSE The Department of Public Instruction maintains a spreadsheet to track all subrecipient audit report monitoring. However, they did not ensure that everyone on the spreadsheet provided a Single Audit report or certification of total federal expenditures. EFFECT Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are noted in audits that were completed. CONTEXT The 4 subrecipients that did not provide a Single Audit report received approximately $9.9 million dollars in Federal expenditures. The additional 6 entities that did not provide certifications indicating their total Federal awards received approximately $1.5 million dollars. We did verify that the 6 entities that failed to provide certifications did not have Single Audit reports submitted to the clearing house. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2020-021 was reported in the immediate prior year. Finding 2018-041 was reported in a previous year. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Public Instruction: ? Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the requirements; ? Issue management decisions within a timely manner; ? Ensure subrecipients took timely corrective action on deficiencies identified in the audits. DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE The Department of Public Instruction agrees with the finding. See ?Management?s Response and Corrective Action? section of this report.
Various Agencies Finding 2022 ? 014: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 ? Child Nutrition Cluster (including COVID-19) ALN 10.557 ? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (including COVID-19) ALN 10.558 ? Child and Adult Care Food Program (including COVID-19) ALN 15.252 ? Abandoned Mine Land Reclamation ALN 21.023 ? COVID-19 ? Emergency Rental Assistance Program ALN 84.010 ? Title I Grants to Local Educational Agencies ALN 84.027 and 84.173 ? ? Special Education Cluster (IDEA) (including COVID-19) ALN 84.425C ? COVID 19 ? Education Stabilization Fund - GEER Fund ALN 84.425D ? COVID 19 ? Education Stabilization Fund - ESSER Fund ALN 84.425R ? COVID 19 ? Education Stabilization Fund - CRRSA EANS ALN 84.425U ? COVID 19 ? Education Stabilization Fund - ARP ESSER ALN 84.425W ? COVID 19 ? Education Stabilization Fund - ARP ESSER HCY ALN 93.558 ? Temporary Assistance for Needy Families (including COVID-19) ALN 93.563 ? Child Support Enforcement ALN 93.575 and 93.596 ? Child Care and Development Fund (CCDF) Cluster (including COVID-19) ALN 93.658 ? Foster Care ? Title IV-E (including COVID-19) ALN 93.659 ? Adoption Assistance (including COVID-19) ALN 93.775, 93.777, and 93.778 ? Medicaid Cluster (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth?s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2021-015) Federal Grant Number(s) and Year(s): 1PA300365 (1/01/2022 ? 9/30/2023), 1PA310305 (10/01/2021 ? 9/30/2022), 1PA310305 (10/01/2020 ? 9/30/2021), 1PA300305 (10/01/2021 ? 9/30/2022), 1PA300305 (10/01/2020 ? 9/30/2021), 1PA320305 (12/27/2020 ? 9/30/2021), Y22174 (10/01/2021 ? 9/30/2024), Y13194 (10/01/2020 ? 9/30/2023), Y03194 (10/01/2019 ? 9/30/2023), Y03191 (10/01/2019 ? 9/30/2020), Y22173 (10/01/2021 ? 9/30/2022), Y22172 (10/01/2021 ? 9/30/2022, Y13191 (10/01/2020 ? 9/30/2021), Y13061 (10/01/2020 ? 9/30/2021), S22AF00017 (1/01/2022 ? 12/31/2024), S21AF10050 (6/01/2021 ? 5/31/2024), S21AF10015 (1/01/2021 ? 12/31/2023), S20AF20092 (10/01/2020 ? 9/30/2023), S20AF20006 (1/01/2020 ? 12/31/2022), S19AF20006 (1/01/2019 ? 12/31/2021), S19AF20004 (12/01/2018 ? 11/30/2023), S18AF20004 (11/01/2017 ? 10/31/2023), ERAE0131 (1/19/2021 ? 12/29/2022), ERAE0333 (5/11/2021 ? 12/30/2025), S010A210038 (7/01/2021 ? 9/30/2022), S010A200038 (7/01/2020 ? 9/30/2021), H027A210093 (7/01/2021 ? 9/30/2022), H027A200093 (7/01/2020 ? 9/30/2021), S425D200028 (3/13/2020 ? 9/30/2022), S425D210028 (3/13/2020 ? 9/30/2022), 2201PATANF (10/01/2021 ? 9/30/2022), 2101PATANF (10/01/2020 ? 9/30/2021), 2001PATANF (10/01/2019 ? 9/30/2020), 2201PACSES (10/01/2021 ? 9/30/2022), 2101PACSES (10/01/2020 ? 9/30/2021), G2201PACCDF (10/01/2021 ? 9/30/2022), G2101PACCDF (10/01/2020 ? 9/30/2021), 2201PAFOST (10/01/2021 ? 9/30/2022), 2101PAFOST (10/01/2020 ? 9/30/2021), 2001PAFOST (10/01/2019 ? 9/30/2020), 2201PAADPT (10/01/2021 ? 9/30/2022), 2101PAADPT (10/01/2020 ? 9/30/2021), 2205PA5MAP (10/01/2021 ? 9/30/2022), 2105PA5MAP (10/01/2020 ? 9/30/2021) Finding 2022 ? 014: (continued) Type of Finding: Significant Deficiency, Noncompliance for Medicaid Cluster Material Weakness, Material Noncompliance for Other Programs Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget?s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse?s (FAC) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency in order to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2022 audit of the Commonwealth?s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth?s fiscal year ended June 30, 2021 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2022. We also evaluated the Commonwealth?s review of 44 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies? tracking lists during the fiscal year ended June 30, 2022 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies? review of subrecipient audit reports: ? Department of Education (PDE): The time period for making a management decision on findings was approximately 6.5 to over 13 months after the FAC MDL start date for 14 out of 25 audit reports with findings. Three of the 14 audit reports were improperly classified on PDE?s audit tracking list as not having federal award findings. ? Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 16.2 months after the FAC MDL start date for one out of three audit reports with findings. In addition, our review disclosed that DEP subgranted federal funds totaling $10,338,570 to one subrecipient during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended due to the COVID-19 pandemic in accordance with the Office of Management and Budget?s (OMB) Memorandum M-21-20, Appendix 3. ? Department of Health (DOH): Our review disclosed that DOH subgranted federal funds totaling $8,103,407 to one subrecipient during the fiscal year ended September 30, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 12.5 months after the December 31, 2021 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. ? Department of Human Services (DHS): The time period for making a management decision on findings ranged from approximately 6.6 months to over 19.6 months after the FAC MDL start date for 12 out of 14 subrecipient audit reports with findings. There was also a delay in DHS?s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Finding 2022 ? 014: (continued) As a follow-up to the prior year finding, we noted that the Commonwealth subgranted federal funds totaling $327,988,063 to the City of Philadelphia during the fiscal year ended June 30, 2021, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 3.5 months after the September 30, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. Our testing disclosed that DHS?s subgrants to the City of Philadelphia were material for five of the 16 major programs/clusters with material subgranted funds. Our follow-up on the prior year finding also disclosed that the Commonwealth subgranted federal funds totaling $28,725,212 to Bucks County during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. DHS was the lead agency for the City of Philadelphia and Bucks County audits. Criteria: 2 CFR ?200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient?s audit, on-site review, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ?200.339 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR ?200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Finding 2022 ? 014: (continued) 2 CFR ?200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR ?200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in ?200.339 [Remedies for noncompliance]. 2 CFR ?200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in ?200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended ? Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program? (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: Finding 2022 ? 014: (continued) (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth?s reliance on an acceptable audit and prompt resolution as evidence of the recipient?s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Management Directive 325.09, Amended ? Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (1) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (6) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR ?200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (7) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended ? Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office?s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. The late management decision at DEP appeared to be the result of a subrecipient being treated as a contractor as described in current year Single Audit Finding #2022-005, despite having a subrecipient Single Audit requirement clause in its contract with DEP. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.8 in order to ensure compliance with federal audit submission requirements. Finding 2022 ? 014: (continued) Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely and the late Single Audit report submissions, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. DOH Response: DOH agrees with the finding. DHS Response: While DHS agrees with this finding, we believe we are in compliance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08 related to outstanding audits. We continue to work with counties and their independent auditors to obtain any late Single Audit reports, and albeit late, we do receive them which is the ultimate goal. Questioned Costs: The amount of questioned costs cannot be determined. The corrective action plan for this finding, if any, has not been reviewed by the auditors. See Corrective Action Plans located elsewhere in this Report.
Various Agencies Finding 2022 ? 014: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 ? Child Nutrition Cluster (including COVID-19) ALN 10.557 ? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (including COVID-19) ALN 10.558 ? Child and Adult Care Food Program (including COVID-19) ALN 15.252 ? Abandoned Mine Land Reclamation ALN 21.023 ? COVID-19 ? Emergency Rental Assistance Program ALN 84.010 ? Title I Grants to Local Educational Agencies ALN 84.027 and 84.173 ? ? Special Education Cluster (IDEA) (including COVID-19) ALN 84.425C ? COVID 19 ? Education Stabilization Fund - GEER Fund ALN 84.425D ? COVID 19 ? Education Stabilization Fund - ESSER Fund ALN 84.425R ? COVID 19 ? Education Stabilization Fund - CRRSA EANS ALN 84.425U ? COVID 19 ? Education Stabilization Fund - ARP ESSER ALN 84.425W ? COVID 19 ? Education Stabilization Fund - ARP ESSER HCY ALN 93.558 ? Temporary Assistance for Needy Families (including COVID-19) ALN 93.563 ? Child Support Enforcement ALN 93.575 and 93.596 ? Child Care and Development Fund (CCDF) Cluster (including COVID-19) ALN 93.658 ? Foster Care ? Title IV-E (including COVID-19) ALN 93.659 ? Adoption Assistance (including COVID-19) ALN 93.775, 93.777, and 93.778 ? Medicaid Cluster (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth?s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2021-015) Federal Grant Number(s) and Year(s): 1PA300365 (1/01/2022 ? 9/30/2023), 1PA310305 (10/01/2021 ? 9/30/2022), 1PA310305 (10/01/2020 ? 9/30/2021), 1PA300305 (10/01/2021 ? 9/30/2022), 1PA300305 (10/01/2020 ? 9/30/2021), 1PA320305 (12/27/2020 ? 9/30/2021), Y22174 (10/01/2021 ? 9/30/2024), Y13194 (10/01/2020 ? 9/30/2023), Y03194 (10/01/2019 ? 9/30/2023), Y03191 (10/01/2019 ? 9/30/2020), Y22173 (10/01/2021 ? 9/30/2022), Y22172 (10/01/2021 ? 9/30/2022, Y13191 (10/01/2020 ? 9/30/2021), Y13061 (10/01/2020 ? 9/30/2021), S22AF00017 (1/01/2022 ? 12/31/2024), S21AF10050 (6/01/2021 ? 5/31/2024), S21AF10015 (1/01/2021 ? 12/31/2023), S20AF20092 (10/01/2020 ? 9/30/2023), S20AF20006 (1/01/2020 ? 12/31/2022), S19AF20006 (1/01/2019 ? 12/31/2021), S19AF20004 (12/01/2018 ? 11/30/2023), S18AF20004 (11/01/2017 ? 10/31/2023), ERAE0131 (1/19/2021 ? 12/29/2022), ERAE0333 (5/11/2021 ? 12/30/2025), S010A210038 (7/01/2021 ? 9/30/2022), S010A200038 (7/01/2020 ? 9/30/2021), H027A210093 (7/01/2021 ? 9/30/2022), H027A200093 (7/01/2020 ? 9/30/2021), S425D200028 (3/13/2020 ? 9/30/2022), S425D210028 (3/13/2020 ? 9/30/2022), 2201PATANF (10/01/2021 ? 9/30/2022), 2101PATANF (10/01/2020 ? 9/30/2021), 2001PATANF (10/01/2019 ? 9/30/2020), 2201PACSES (10/01/2021 ? 9/30/2022), 2101PACSES (10/01/2020 ? 9/30/2021), G2201PACCDF (10/01/2021 ? 9/30/2022), G2101PACCDF (10/01/2020 ? 9/30/2021), 2201PAFOST (10/01/2021 ? 9/30/2022), 2101PAFOST (10/01/2020 ? 9/30/2021), 2001PAFOST (10/01/2019 ? 9/30/2020), 2201PAADPT (10/01/2021 ? 9/30/2022), 2101PAADPT (10/01/2020 ? 9/30/2021), 2205PA5MAP (10/01/2021 ? 9/30/2022), 2105PA5MAP (10/01/2020 ? 9/30/2021) Finding 2022 ? 014: (continued) Type of Finding: Significant Deficiency, Noncompliance for Medicaid Cluster Material Weakness, Material Noncompliance for Other Programs Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget?s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse?s (FAC) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency in order to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2022 audit of the Commonwealth?s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth?s fiscal year ended June 30, 2021 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2022. We also evaluated the Commonwealth?s review of 44 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies? tracking lists during the fiscal year ended June 30, 2022 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies? review of subrecipient audit reports: ? Department of Education (PDE): The time period for making a management decision on findings was approximately 6.5 to over 13 months after the FAC MDL start date for 14 out of 25 audit reports with findings. Three of the 14 audit reports were improperly classified on PDE?s audit tracking list as not having federal award findings. ? Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 16.2 months after the FAC MDL start date for one out of three audit reports with findings. In addition, our review disclosed that DEP subgranted federal funds totaling $10,338,570 to one subrecipient during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended due to the COVID-19 pandemic in accordance with the Office of Management and Budget?s (OMB) Memorandum M-21-20, Appendix 3. ? Department of Health (DOH): Our review disclosed that DOH subgranted federal funds totaling $8,103,407 to one subrecipient during the fiscal year ended September 30, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 12.5 months after the December 31, 2021 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. ? Department of Human Services (DHS): The time period for making a management decision on findings ranged from approximately 6.6 months to over 19.6 months after the FAC MDL start date for 12 out of 14 subrecipient audit reports with findings. There was also a delay in DHS?s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Finding 2022 ? 014: (continued) As a follow-up to the prior year finding, we noted that the Commonwealth subgranted federal funds totaling $327,988,063 to the City of Philadelphia during the fiscal year ended June 30, 2021, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 3.5 months after the September 30, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. Our testing disclosed that DHS?s subgrants to the City of Philadelphia were material for five of the 16 major programs/clusters with material subgranted funds. Our follow-up on the prior year finding also disclosed that the Commonwealth subgranted federal funds totaling $28,725,212 to Bucks County during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. DHS was the lead agency for the City of Philadelphia and Bucks County audits. Criteria: 2 CFR ?200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient?s audit, on-site review, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ?200.339 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR ?200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Finding 2022 ? 014: (continued) 2 CFR ?200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR ?200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in ?200.339 [Remedies for noncompliance]. 2 CFR ?200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in ?200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended ? Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program? (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: Finding 2022 ? 014: (continued) (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth?s reliance on an acceptable audit and prompt resolution as evidence of the recipient?s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Management Directive 325.09, Amended ? Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (1) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (6) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR ?200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (7) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended ? Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office?s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. The late management decision at DEP appeared to be the result of a subrecipient being treated as a contractor as described in current year Single Audit Finding #2022-005, despite having a subrecipient Single Audit requirement clause in its contract with DEP. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.8 in order to ensure compliance with federal audit submission requirements. Finding 2022 ? 014: (continued) Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely and the late Single Audit report submissions, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. DOH Response: DOH agrees with the finding. DHS Response: While DHS agrees with this finding, we believe we are in compliance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08 related to outstanding audits. We continue to work with counties and their independent auditors to obtain any late Single Audit reports, and albeit late, we do receive them which is the ultimate goal. Questioned Costs: The amount of questioned costs cannot be determined. The corrective action plan for this finding, if any, has not been reviewed by the auditors. See Corrective Action Plans located elsewhere in this Report.
Various Agencies Finding 2022 ? 014: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 ? Child Nutrition Cluster (including COVID-19) ALN 10.557 ? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (including COVID-19) ALN 10.558 ? Child and Adult Care Food Program (including COVID-19) ALN 15.252 ? Abandoned Mine Land Reclamation ALN 21.023 ? COVID-19 ? Emergency Rental Assistance Program ALN 84.010 ? Title I Grants to Local Educational Agencies ALN 84.027 and 84.173 ? ? Special Education Cluster (IDEA) (including COVID-19) ALN 84.425C ? COVID 19 ? Education Stabilization Fund - GEER Fund ALN 84.425D ? COVID 19 ? Education Stabilization Fund - ESSER Fund ALN 84.425R ? COVID 19 ? Education Stabilization Fund - CRRSA EANS ALN 84.425U ? COVID 19 ? Education Stabilization Fund - ARP ESSER ALN 84.425W ? COVID 19 ? Education Stabilization Fund - ARP ESSER HCY ALN 93.558 ? Temporary Assistance for Needy Families (including COVID-19) ALN 93.563 ? Child Support Enforcement ALN 93.575 and 93.596 ? Child Care and Development Fund (CCDF) Cluster (including COVID-19) ALN 93.658 ? Foster Care ? Title IV-E (including COVID-19) ALN 93.659 ? Adoption Assistance (including COVID-19) ALN 93.775, 93.777, and 93.778 ? Medicaid Cluster (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth?s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2021-015) Federal Grant Number(s) and Year(s): 1PA300365 (1/01/2022 ? 9/30/2023), 1PA310305 (10/01/2021 ? 9/30/2022), 1PA310305 (10/01/2020 ? 9/30/2021), 1PA300305 (10/01/2021 ? 9/30/2022), 1PA300305 (10/01/2020 ? 9/30/2021), 1PA320305 (12/27/2020 ? 9/30/2021), Y22174 (10/01/2021 ? 9/30/2024), Y13194 (10/01/2020 ? 9/30/2023), Y03194 (10/01/2019 ? 9/30/2023), Y03191 (10/01/2019 ? 9/30/2020), Y22173 (10/01/2021 ? 9/30/2022), Y22172 (10/01/2021 ? 9/30/2022, Y13191 (10/01/2020 ? 9/30/2021), Y13061 (10/01/2020 ? 9/30/2021), S22AF00017 (1/01/2022 ? 12/31/2024), S21AF10050 (6/01/2021 ? 5/31/2024), S21AF10015 (1/01/2021 ? 12/31/2023), S20AF20092 (10/01/2020 ? 9/30/2023), S20AF20006 (1/01/2020 ? 12/31/2022), S19AF20006 (1/01/2019 ? 12/31/2021), S19AF20004 (12/01/2018 ? 11/30/2023), S18AF20004 (11/01/2017 ? 10/31/2023), ERAE0131 (1/19/2021 ? 12/29/2022), ERAE0333 (5/11/2021 ? 12/30/2025), S010A210038 (7/01/2021 ? 9/30/2022), S010A200038 (7/01/2020 ? 9/30/2021), H027A210093 (7/01/2021 ? 9/30/2022), H027A200093 (7/01/2020 ? 9/30/2021), S425D200028 (3/13/2020 ? 9/30/2022), S425D210028 (3/13/2020 ? 9/30/2022), 2201PATANF (10/01/2021 ? 9/30/2022), 2101PATANF (10/01/2020 ? 9/30/2021), 2001PATANF (10/01/2019 ? 9/30/2020), 2201PACSES (10/01/2021 ? 9/30/2022), 2101PACSES (10/01/2020 ? 9/30/2021), G2201PACCDF (10/01/2021 ? 9/30/2022), G2101PACCDF (10/01/2020 ? 9/30/2021), 2201PAFOST (10/01/2021 ? 9/30/2022), 2101PAFOST (10/01/2020 ? 9/30/2021), 2001PAFOST (10/01/2019 ? 9/30/2020), 2201PAADPT (10/01/2021 ? 9/30/2022), 2101PAADPT (10/01/2020 ? 9/30/2021), 2205PA5MAP (10/01/2021 ? 9/30/2022), 2105PA5MAP (10/01/2020 ? 9/30/2021) Finding 2022 ? 014: (continued) Type of Finding: Significant Deficiency, Noncompliance for Medicaid Cluster Material Weakness, Material Noncompliance for Other Programs Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget?s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse?s (FAC) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency in order to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2022 audit of the Commonwealth?s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth?s fiscal year ended June 30, 2021 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2022. We also evaluated the Commonwealth?s review of 44 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies? tracking lists during the fiscal year ended June 30, 2022 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies? review of subrecipient audit reports: ? Department of Education (PDE): The time period for making a management decision on findings was approximately 6.5 to over 13 months after the FAC MDL start date for 14 out of 25 audit reports with findings. Three of the 14 audit reports were improperly classified on PDE?s audit tracking list as not having federal award findings. ? Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 16.2 months after the FAC MDL start date for one out of three audit reports with findings. In addition, our review disclosed that DEP subgranted federal funds totaling $10,338,570 to one subrecipient during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended due to the COVID-19 pandemic in accordance with the Office of Management and Budget?s (OMB) Memorandum M-21-20, Appendix 3. ? Department of Health (DOH): Our review disclosed that DOH subgranted federal funds totaling $8,103,407 to one subrecipient during the fiscal year ended September 30, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 12.5 months after the December 31, 2021 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. ? Department of Human Services (DHS): The time period for making a management decision on findings ranged from approximately 6.6 months to over 19.6 months after the FAC MDL start date for 12 out of 14 subrecipient audit reports with findings. There was also a delay in DHS?s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Finding 2022 ? 014: (continued) As a follow-up to the prior year finding, we noted that the Commonwealth subgranted federal funds totaling $327,988,063 to the City of Philadelphia during the fiscal year ended June 30, 2021, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 3.5 months after the September 30, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. Our testing disclosed that DHS?s subgrants to the City of Philadelphia were material for five of the 16 major programs/clusters with material subgranted funds. Our follow-up on the prior year finding also disclosed that the Commonwealth subgranted federal funds totaling $28,725,212 to Bucks County during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. DHS was the lead agency for the City of Philadelphia and Bucks County audits. Criteria: 2 CFR ?200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient?s audit, on-site review, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ?200.339 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR ?200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Finding 2022 ? 014: (continued) 2 CFR ?200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR ?200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in ?200.339 [Remedies for noncompliance]. 2 CFR ?200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in ?200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended ? Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program? (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: Finding 2022 ? 014: (continued) (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth?s reliance on an acceptable audit and prompt resolution as evidence of the recipient?s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Management Directive 325.09, Amended ? Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (1) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (6) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR ?200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (7) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended ? Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office?s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. The late management decision at DEP appeared to be the result of a subrecipient being treated as a contractor as described in current year Single Audit Finding #2022-005, despite having a subrecipient Single Audit requirement clause in its contract with DEP. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.8 in order to ensure compliance with federal audit submission requirements. Finding 2022 ? 014: (continued) Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely and the late Single Audit report submissions, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. DOH Response: DOH agrees with the finding. DHS Response: While DHS agrees with this finding, we believe we are in compliance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08 related to outstanding audits. We continue to work with counties and their independent auditors to obtain any late Single Audit reports, and albeit late, we do receive them which is the ultimate goal. Questioned Costs: The amount of questioned costs cannot be determined. The corrective action plan for this finding, if any, has not been reviewed by the auditors. See Corrective Action Plans located elsewhere in this Report.
Various Agencies Finding 2022 ? 014: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 ? Child Nutrition Cluster (including COVID-19) ALN 10.557 ? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (including COVID-19) ALN 10.558 ? Child and Adult Care Food Program (including COVID-19) ALN 15.252 ? Abandoned Mine Land Reclamation ALN 21.023 ? COVID-19 ? Emergency Rental Assistance Program ALN 84.010 ? Title I Grants to Local Educational Agencies ALN 84.027 and 84.173 ? ? Special Education Cluster (IDEA) (including COVID-19) ALN 84.425C ? COVID 19 ? Education Stabilization Fund - GEER Fund ALN 84.425D ? COVID 19 ? Education Stabilization Fund - ESSER Fund ALN 84.425R ? COVID 19 ? Education Stabilization Fund - CRRSA EANS ALN 84.425U ? COVID 19 ? Education Stabilization Fund - ARP ESSER ALN 84.425W ? COVID 19 ? Education Stabilization Fund - ARP ESSER HCY ALN 93.558 ? Temporary Assistance for Needy Families (including COVID-19) ALN 93.563 ? Child Support Enforcement ALN 93.575 and 93.596 ? Child Care and Development Fund (CCDF) Cluster (including COVID-19) ALN 93.658 ? Foster Care ? Title IV-E (including COVID-19) ALN 93.659 ? Adoption Assistance (including COVID-19) ALN 93.775, 93.777, and 93.778 ? Medicaid Cluster (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth?s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2021-015) Federal Grant Number(s) and Year(s): 1PA300365 (1/01/2022 ? 9/30/2023), 1PA310305 (10/01/2021 ? 9/30/2022), 1PA310305 (10/01/2020 ? 9/30/2021), 1PA300305 (10/01/2021 ? 9/30/2022), 1PA300305 (10/01/2020 ? 9/30/2021), 1PA320305 (12/27/2020 ? 9/30/2021), Y22174 (10/01/2021 ? 9/30/2024), Y13194 (10/01/2020 ? 9/30/2023), Y03194 (10/01/2019 ? 9/30/2023), Y03191 (10/01/2019 ? 9/30/2020), Y22173 (10/01/2021 ? 9/30/2022), Y22172 (10/01/2021 ? 9/30/2022, Y13191 (10/01/2020 ? 9/30/2021), Y13061 (10/01/2020 ? 9/30/2021), S22AF00017 (1/01/2022 ? 12/31/2024), S21AF10050 (6/01/2021 ? 5/31/2024), S21AF10015 (1/01/2021 ? 12/31/2023), S20AF20092 (10/01/2020 ? 9/30/2023), S20AF20006 (1/01/2020 ? 12/31/2022), S19AF20006 (1/01/2019 ? 12/31/2021), S19AF20004 (12/01/2018 ? 11/30/2023), S18AF20004 (11/01/2017 ? 10/31/2023), ERAE0131 (1/19/2021 ? 12/29/2022), ERAE0333 (5/11/2021 ? 12/30/2025), S010A210038 (7/01/2021 ? 9/30/2022), S010A200038 (7/01/2020 ? 9/30/2021), H027A210093 (7/01/2021 ? 9/30/2022), H027A200093 (7/01/2020 ? 9/30/2021), S425D200028 (3/13/2020 ? 9/30/2022), S425D210028 (3/13/2020 ? 9/30/2022), 2201PATANF (10/01/2021 ? 9/30/2022), 2101PATANF (10/01/2020 ? 9/30/2021), 2001PATANF (10/01/2019 ? 9/30/2020), 2201PACSES (10/01/2021 ? 9/30/2022), 2101PACSES (10/01/2020 ? 9/30/2021), G2201PACCDF (10/01/2021 ? 9/30/2022), G2101PACCDF (10/01/2020 ? 9/30/2021), 2201PAFOST (10/01/2021 ? 9/30/2022), 2101PAFOST (10/01/2020 ? 9/30/2021), 2001PAFOST (10/01/2019 ? 9/30/2020), 2201PAADPT (10/01/2021 ? 9/30/2022), 2101PAADPT (10/01/2020 ? 9/30/2021), 2205PA5MAP (10/01/2021 ? 9/30/2022), 2105PA5MAP (10/01/2020 ? 9/30/2021) Finding 2022 ? 014: (continued) Type of Finding: Significant Deficiency, Noncompliance for Medicaid Cluster Material Weakness, Material Noncompliance for Other Programs Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget?s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse?s (FAC) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency in order to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2022 audit of the Commonwealth?s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth?s fiscal year ended June 30, 2021 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2022. We also evaluated the Commonwealth?s review of 44 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies? tracking lists during the fiscal year ended June 30, 2022 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies? review of subrecipient audit reports: ? Department of Education (PDE): The time period for making a management decision on findings was approximately 6.5 to over 13 months after the FAC MDL start date for 14 out of 25 audit reports with findings. Three of the 14 audit reports were improperly classified on PDE?s audit tracking list as not having federal award findings. ? Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 16.2 months after the FAC MDL start date for one out of three audit reports with findings. In addition, our review disclosed that DEP subgranted federal funds totaling $10,338,570 to one subrecipient during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended due to the COVID-19 pandemic in accordance with the Office of Management and Budget?s (OMB) Memorandum M-21-20, Appendix 3. ? Department of Health (DOH): Our review disclosed that DOH subgranted federal funds totaling $8,103,407 to one subrecipient during the fiscal year ended September 30, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 12.5 months after the December 31, 2021 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. ? Department of Human Services (DHS): The time period for making a management decision on findings ranged from approximately 6.6 months to over 19.6 months after the FAC MDL start date for 12 out of 14 subrecipient audit reports with findings. There was also a delay in DHS?s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Finding 2022 ? 014: (continued) As a follow-up to the prior year finding, we noted that the Commonwealth subgranted federal funds totaling $327,988,063 to the City of Philadelphia during the fiscal year ended June 30, 2021, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 3.5 months after the September 30, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. Our testing disclosed that DHS?s subgrants to the City of Philadelphia were material for five of the 16 major programs/clusters with material subgranted funds. Our follow-up on the prior year finding also disclosed that the Commonwealth subgranted federal funds totaling $28,725,212 to Bucks County during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. DHS was the lead agency for the City of Philadelphia and Bucks County audits. Criteria: 2 CFR ?200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient?s audit, on-site review, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ?200.339 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR ?200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Finding 2022 ? 014: (continued) 2 CFR ?200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR ?200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in ?200.339 [Remedies for noncompliance]. 2 CFR ?200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in ?200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended ? Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program? (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: Finding 2022 ? 014: (continued) (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth?s reliance on an acceptable audit and prompt resolution as evidence of the recipient?s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Management Directive 325.09, Amended ? Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (1) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (6) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR ?200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (7) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended ? Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office?s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. The late management decision at DEP appeared to be the result of a subrecipient being treated as a contractor as described in current year Single Audit Finding #2022-005, despite having a subrecipient Single Audit requirement clause in its contract with DEP. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.8 in order to ensure compliance with federal audit submission requirements. Finding 2022 ? 014: (continued) Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely and the late Single Audit report submissions, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. DOH Response: DOH agrees with the finding. DHS Response: While DHS agrees with this finding, we believe we are in compliance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08 related to outstanding audits. We continue to work with counties and their independent auditors to obtain any late Single Audit reports, and albeit late, we do receive them which is the ultimate goal. Questioned Costs: The amount of questioned costs cannot be determined. The corrective action plan for this finding, if any, has not been reviewed by the auditors. See Corrective Action Plans located elsewhere in this Report.
Various Agencies Finding 2022 ? 014: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 ? Child Nutrition Cluster (including COVID-19) ALN 10.557 ? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (including COVID-19) ALN 10.558 ? Child and Adult Care Food Program (including COVID-19) ALN 15.252 ? Abandoned Mine Land Reclamation ALN 21.023 ? COVID-19 ? Emergency Rental Assistance Program ALN 84.010 ? Title I Grants to Local Educational Agencies ALN 84.027 and 84.173 ? ? Special Education Cluster (IDEA) (including COVID-19) ALN 84.425C ? COVID 19 ? Education Stabilization Fund - GEER Fund ALN 84.425D ? COVID 19 ? Education Stabilization Fund - ESSER Fund ALN 84.425R ? COVID 19 ? Education Stabilization Fund - CRRSA EANS ALN 84.425U ? COVID 19 ? Education Stabilization Fund - ARP ESSER ALN 84.425W ? COVID 19 ? Education Stabilization Fund - ARP ESSER HCY ALN 93.558 ? Temporary Assistance for Needy Families (including COVID-19) ALN 93.563 ? Child Support Enforcement ALN 93.575 and 93.596 ? Child Care and Development Fund (CCDF) Cluster (including COVID-19) ALN 93.658 ? Foster Care ? Title IV-E (including COVID-19) ALN 93.659 ? Adoption Assistance (including COVID-19) ALN 93.775, 93.777, and 93.778 ? Medicaid Cluster (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth?s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2021-015) Federal Grant Number(s) and Year(s): 1PA300365 (1/01/2022 ? 9/30/2023), 1PA310305 (10/01/2021 ? 9/30/2022), 1PA310305 (10/01/2020 ? 9/30/2021), 1PA300305 (10/01/2021 ? 9/30/2022), 1PA300305 (10/01/2020 ? 9/30/2021), 1PA320305 (12/27/2020 ? 9/30/2021), Y22174 (10/01/2021 ? 9/30/2024), Y13194 (10/01/2020 ? 9/30/2023), Y03194 (10/01/2019 ? 9/30/2023), Y03191 (10/01/2019 ? 9/30/2020), Y22173 (10/01/2021 ? 9/30/2022), Y22172 (10/01/2021 ? 9/30/2022, Y13191 (10/01/2020 ? 9/30/2021), Y13061 (10/01/2020 ? 9/30/2021), S22AF00017 (1/01/2022 ? 12/31/2024), S21AF10050 (6/01/2021 ? 5/31/2024), S21AF10015 (1/01/2021 ? 12/31/2023), S20AF20092 (10/01/2020 ? 9/30/2023), S20AF20006 (1/01/2020 ? 12/31/2022), S19AF20006 (1/01/2019 ? 12/31/2021), S19AF20004 (12/01/2018 ? 11/30/2023), S18AF20004 (11/01/2017 ? 10/31/2023), ERAE0131 (1/19/2021 ? 12/29/2022), ERAE0333 (5/11/2021 ? 12/30/2025), S010A210038 (7/01/2021 ? 9/30/2022), S010A200038 (7/01/2020 ? 9/30/2021), H027A210093 (7/01/2021 ? 9/30/2022), H027A200093 (7/01/2020 ? 9/30/2021), S425D200028 (3/13/2020 ? 9/30/2022), S425D210028 (3/13/2020 ? 9/30/2022), 2201PATANF (10/01/2021 ? 9/30/2022), 2101PATANF (10/01/2020 ? 9/30/2021), 2001PATANF (10/01/2019 ? 9/30/2020), 2201PACSES (10/01/2021 ? 9/30/2022), 2101PACSES (10/01/2020 ? 9/30/2021), G2201PACCDF (10/01/2021 ? 9/30/2022), G2101PACCDF (10/01/2020 ? 9/30/2021), 2201PAFOST (10/01/2021 ? 9/30/2022), 2101PAFOST (10/01/2020 ? 9/30/2021), 2001PAFOST (10/01/2019 ? 9/30/2020), 2201PAADPT (10/01/2021 ? 9/30/2022), 2101PAADPT (10/01/2020 ? 9/30/2021), 2205PA5MAP (10/01/2021 ? 9/30/2022), 2105PA5MAP (10/01/2020 ? 9/30/2021) Finding 2022 ? 014: (continued) Type of Finding: Significant Deficiency, Noncompliance for Medicaid Cluster Material Weakness, Material Noncompliance for Other Programs Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget?s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse?s (FAC) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency in order to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2022 audit of the Commonwealth?s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth?s fiscal year ended June 30, 2021 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2022. We also evaluated the Commonwealth?s review of 44 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies? tracking lists during the fiscal year ended June 30, 2022 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies? review of subrecipient audit reports: ? Department of Education (PDE): The time period for making a management decision on findings was approximately 6.5 to over 13 months after the FAC MDL start date for 14 out of 25 audit reports with findings. Three of the 14 audit reports were improperly classified on PDE?s audit tracking list as not having federal award findings. ? Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 16.2 months after the FAC MDL start date for one out of three audit reports with findings. In addition, our review disclosed that DEP subgranted federal funds totaling $10,338,570 to one subrecipient during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended due to the COVID-19 pandemic in accordance with the Office of Management and Budget?s (OMB) Memorandum M-21-20, Appendix 3. ? Department of Health (DOH): Our review disclosed that DOH subgranted federal funds totaling $8,103,407 to one subrecipient during the fiscal year ended September 30, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 12.5 months after the December 31, 2021 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. ? Department of Human Services (DHS): The time period for making a management decision on findings ranged from approximately 6.6 months to over 19.6 months after the FAC MDL start date for 12 out of 14 subrecipient audit reports with findings. There was also a delay in DHS?s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Finding 2022 ? 014: (continued) As a follow-up to the prior year finding, we noted that the Commonwealth subgranted federal funds totaling $327,988,063 to the City of Philadelphia during the fiscal year ended June 30, 2021, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 3.5 months after the September 30, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. Our testing disclosed that DHS?s subgrants to the City of Philadelphia were material for five of the 16 major programs/clusters with material subgranted funds. Our follow-up on the prior year finding also disclosed that the Commonwealth subgranted federal funds totaling $28,725,212 to Bucks County during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. DHS was the lead agency for the City of Philadelphia and Bucks County audits. Criteria: 2 CFR ?200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient?s audit, on-site review, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ?200.339 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR ?200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Finding 2022 ? 014: (continued) 2 CFR ?200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR ?200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in ?200.339 [Remedies for noncompliance]. 2 CFR ?200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in ?200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended ? Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program? (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: Finding 2022 ? 014: (continued) (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth?s reliance on an acceptable audit and prompt resolution as evidence of the recipient?s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Management Directive 325.09, Amended ? Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (1) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (6) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR ?200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (7) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended ? Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office?s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. The late management decision at DEP appeared to be the result of a subrecipient being treated as a contractor as described in current year Single Audit Finding #2022-005, despite having a subrecipient Single Audit requirement clause in its contract with DEP. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.8 in order to ensure compliance with federal audit submission requirements. Finding 2022 ? 014: (continued) Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely and the late Single Audit report submissions, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. DOH Response: DOH agrees with the finding. DHS Response: While DHS agrees with this finding, we believe we are in compliance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08 related to outstanding audits. We continue to work with counties and their independent auditors to obtain any late Single Audit reports, and albeit late, we do receive them which is the ultimate goal. Questioned Costs: The amount of questioned costs cannot be determined. The corrective action plan for this finding, if any, has not been reviewed by the auditors. See Corrective Action Plans located elsewhere in this Report.
Various Agencies Finding 2022 ? 014: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 ? Child Nutrition Cluster (including COVID-19) ALN 10.557 ? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (including COVID-19) ALN 10.558 ? Child and Adult Care Food Program (including COVID-19) ALN 15.252 ? Abandoned Mine Land Reclamation ALN 21.023 ? COVID-19 ? Emergency Rental Assistance Program ALN 84.010 ? Title I Grants to Local Educational Agencies ALN 84.027 and 84.173 ? ? Special Education Cluster (IDEA) (including COVID-19) ALN 84.425C ? COVID 19 ? Education Stabilization Fund - GEER Fund ALN 84.425D ? COVID 19 ? Education Stabilization Fund - ESSER Fund ALN 84.425R ? COVID 19 ? Education Stabilization Fund - CRRSA EANS ALN 84.425U ? COVID 19 ? Education Stabilization Fund - ARP ESSER ALN 84.425W ? COVID 19 ? Education Stabilization Fund - ARP ESSER HCY ALN 93.558 ? Temporary Assistance for Needy Families (including COVID-19) ALN 93.563 ? Child Support Enforcement ALN 93.575 and 93.596 ? Child Care and Development Fund (CCDF) Cluster (including COVID-19) ALN 93.658 ? Foster Care ? Title IV-E (including COVID-19) ALN 93.659 ? Adoption Assistance (including COVID-19) ALN 93.775, 93.777, and 93.778 ? Medicaid Cluster (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth?s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2021-015) Federal Grant Number(s) and Year(s): 1PA300365 (1/01/2022 ? 9/30/2023), 1PA310305 (10/01/2021 ? 9/30/2022), 1PA310305 (10/01/2020 ? 9/30/2021), 1PA300305 (10/01/2021 ? 9/30/2022), 1PA300305 (10/01/2020 ? 9/30/2021), 1PA320305 (12/27/2020 ? 9/30/2021), Y22174 (10/01/2021 ? 9/30/2024), Y13194 (10/01/2020 ? 9/30/2023), Y03194 (10/01/2019 ? 9/30/2023), Y03191 (10/01/2019 ? 9/30/2020), Y22173 (10/01/2021 ? 9/30/2022), Y22172 (10/01/2021 ? 9/30/2022, Y13191 (10/01/2020 ? 9/30/2021), Y13061 (10/01/2020 ? 9/30/2021), S22AF00017 (1/01/2022 ? 12/31/2024), S21AF10050 (6/01/2021 ? 5/31/2024), S21AF10015 (1/01/2021 ? 12/31/2023), S20AF20092 (10/01/2020 ? 9/30/2023), S20AF20006 (1/01/2020 ? 12/31/2022), S19AF20006 (1/01/2019 ? 12/31/2021), S19AF20004 (12/01/2018 ? 11/30/2023), S18AF20004 (11/01/2017 ? 10/31/2023), ERAE0131 (1/19/2021 ? 12/29/2022), ERAE0333 (5/11/2021 ? 12/30/2025), S010A210038 (7/01/2021 ? 9/30/2022), S010A200038 (7/01/2020 ? 9/30/2021), H027A210093 (7/01/2021 ? 9/30/2022), H027A200093 (7/01/2020 ? 9/30/2021), S425D200028 (3/13/2020 ? 9/30/2022), S425D210028 (3/13/2020 ? 9/30/2022), 2201PATANF (10/01/2021 ? 9/30/2022), 2101PATANF (10/01/2020 ? 9/30/2021), 2001PATANF (10/01/2019 ? 9/30/2020), 2201PACSES (10/01/2021 ? 9/30/2022), 2101PACSES (10/01/2020 ? 9/30/2021), G2201PACCDF (10/01/2021 ? 9/30/2022), G2101PACCDF (10/01/2020 ? 9/30/2021), 2201PAFOST (10/01/2021 ? 9/30/2022), 2101PAFOST (10/01/2020 ? 9/30/2021), 2001PAFOST (10/01/2019 ? 9/30/2020), 2201PAADPT (10/01/2021 ? 9/30/2022), 2101PAADPT (10/01/2020 ? 9/30/2021), 2205PA5MAP (10/01/2021 ? 9/30/2022), 2105PA5MAP (10/01/2020 ? 9/30/2021) Finding 2022 ? 014: (continued) Type of Finding: Significant Deficiency, Noncompliance for Medicaid Cluster Material Weakness, Material Noncompliance for Other Programs Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget?s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse?s (FAC) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency in order to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2022 audit of the Commonwealth?s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth?s fiscal year ended June 30, 2021 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2022. We also evaluated the Commonwealth?s review of 44 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies? tracking lists during the fiscal year ended June 30, 2022 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies? review of subrecipient audit reports: ? Department of Education (PDE): The time period for making a management decision on findings was approximately 6.5 to over 13 months after the FAC MDL start date for 14 out of 25 audit reports with findings. Three of the 14 audit reports were improperly classified on PDE?s audit tracking list as not having federal award findings. ? Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 16.2 months after the FAC MDL start date for one out of three audit reports with findings. In addition, our review disclosed that DEP subgranted federal funds totaling $10,338,570 to one subrecipient during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended due to the COVID-19 pandemic in accordance with the Office of Management and Budget?s (OMB) Memorandum M-21-20, Appendix 3. ? Department of Health (DOH): Our review disclosed that DOH subgranted federal funds totaling $8,103,407 to one subrecipient during the fiscal year ended September 30, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 12.5 months after the December 31, 2021 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. ? Department of Human Services (DHS): The time period for making a management decision on findings ranged from approximately 6.6 months to over 19.6 months after the FAC MDL start date for 12 out of 14 subrecipient audit reports with findings. There was also a delay in DHS?s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Finding 2022 ? 014: (continued) As a follow-up to the prior year finding, we noted that the Commonwealth subgranted federal funds totaling $327,988,063 to the City of Philadelphia during the fiscal year ended June 30, 2021, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 3.5 months after the September 30, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. Our testing disclosed that DHS?s subgrants to the City of Philadelphia were material for five of the 16 major programs/clusters with material subgranted funds. Our follow-up on the prior year finding also disclosed that the Commonwealth subgranted federal funds totaling $28,725,212 to Bucks County during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. DHS was the lead agency for the City of Philadelphia and Bucks County audits. Criteria: 2 CFR ?200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient?s audit, on-site review, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ?200.339 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR ?200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Finding 2022 ? 014: (continued) 2 CFR ?200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR ?200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in ?200.339 [Remedies for noncompliance]. 2 CFR ?200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in ?200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended ? Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program? (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: Finding 2022 ? 014: (continued) (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth?s reliance on an acceptable audit and prompt resolution as evidence of the recipient?s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Management Directive 325.09, Amended ? Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (1) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (6) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR ?200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (7) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended ? Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office?s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. The late management decision at DEP appeared to be the result of a subrecipient being treated as a contractor as described in current year Single Audit Finding #2022-005, despite having a subrecipient Single Audit requirement clause in its contract with DEP. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.8 in order to ensure compliance with federal audit submission requirements. Finding 2022 ? 014: (continued) Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely and the late Single Audit report submissions, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. DOH Response: DOH agrees with the finding. DHS Response: While DHS agrees with this finding, we believe we are in compliance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08 related to outstanding audits. We continue to work with counties and their independent auditors to obtain any late Single Audit reports, and albeit late, we do receive them which is the ultimate goal. Questioned Costs: The amount of questioned costs cannot be determined. The corrective action plan for this finding, if any, has not been reviewed by the auditors. See Corrective Action Plans located elsewhere in this Report.
Various Agencies Finding 2022 ? 014: ALN 10.553, 10.555, 10.556, 10.559, and 10.582 ? Child Nutrition Cluster (including COVID-19) ALN 10.557 ? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (including COVID-19) ALN 10.558 ? Child and Adult Care Food Program (including COVID-19) ALN 15.252 ? Abandoned Mine Land Reclamation ALN 21.023 ? COVID-19 ? Emergency Rental Assistance Program ALN 84.010 ? Title I Grants to Local Educational Agencies ALN 84.027 and 84.173 ? ? Special Education Cluster (IDEA) (including COVID-19) ALN 84.425C ? COVID 19 ? Education Stabilization Fund - GEER Fund ALN 84.425D ? COVID 19 ? Education Stabilization Fund - ESSER Fund ALN 84.425R ? COVID 19 ? Education Stabilization Fund - CRRSA EANS ALN 84.425U ? COVID 19 ? Education Stabilization Fund - ARP ESSER ALN 84.425W ? COVID 19 ? Education Stabilization Fund - ARP ESSER HCY ALN 93.558 ? Temporary Assistance for Needy Families (including COVID-19) ALN 93.563 ? Child Support Enforcement ALN 93.575 and 93.596 ? Child Care and Development Fund (CCDF) Cluster (including COVID-19) ALN 93.658 ? Foster Care ? Title IV-E (including COVID-19) ALN 93.659 ? Adoption Assistance (including COVID-19) ALN 93.775, 93.777, and 93.778 ? Medicaid Cluster (including COVID-19) A Material Weakness and Material Noncompliance Exist in the Commonwealth?s Subrecipient Audit Resolution Process (A Similar Condition Was Noted in Prior Year Finding 2021-015) Federal Grant Number(s) and Year(s): 1PA300365 (1/01/2022 ? 9/30/2023), 1PA310305 (10/01/2021 ? 9/30/2022), 1PA310305 (10/01/2020 ? 9/30/2021), 1PA300305 (10/01/2021 ? 9/30/2022), 1PA300305 (10/01/2020 ? 9/30/2021), 1PA320305 (12/27/2020 ? 9/30/2021), Y22174 (10/01/2021 ? 9/30/2024), Y13194 (10/01/2020 ? 9/30/2023), Y03194 (10/01/2019 ? 9/30/2023), Y03191 (10/01/2019 ? 9/30/2020), Y22173 (10/01/2021 ? 9/30/2022), Y22172 (10/01/2021 ? 9/30/2022, Y13191 (10/01/2020 ? 9/30/2021), Y13061 (10/01/2020 ? 9/30/2021), S22AF00017 (1/01/2022 ? 12/31/2024), S21AF10050 (6/01/2021 ? 5/31/2024), S21AF10015 (1/01/2021 ? 12/31/2023), S20AF20092 (10/01/2020 ? 9/30/2023), S20AF20006 (1/01/2020 ? 12/31/2022), S19AF20006 (1/01/2019 ? 12/31/2021), S19AF20004 (12/01/2018 ? 11/30/2023), S18AF20004 (11/01/2017 ? 10/31/2023), ERAE0131 (1/19/2021 ? 12/29/2022), ERAE0333 (5/11/2021 ? 12/30/2025), S010A210038 (7/01/2021 ? 9/30/2022), S010A200038 (7/01/2020 ? 9/30/2021), H027A210093 (7/01/2021 ? 9/30/2022), H027A200093 (7/01/2020 ? 9/30/2021), S425D200028 (3/13/2020 ? 9/30/2022), S425D210028 (3/13/2020 ? 9/30/2022), 2201PATANF (10/01/2021 ? 9/30/2022), 2101PATANF (10/01/2020 ? 9/30/2021), 2001PATANF (10/01/2019 ? 9/30/2020), 2201PACSES (10/01/2021 ? 9/30/2022), 2101PACSES (10/01/2020 ? 9/30/2021), G2201PACCDF (10/01/2021 ? 9/30/2022), G2101PACCDF (10/01/2020 ? 9/30/2021), 2201PAFOST (10/01/2021 ? 9/30/2022), 2101PAFOST (10/01/2020 ? 9/30/2021), 2001PAFOST (10/01/2019 ? 9/30/2020), 2201PAADPT (10/01/2021 ? 9/30/2022), 2101PAADPT (10/01/2020 ? 9/30/2021), 2205PA5MAP (10/01/2021 ? 9/30/2022), 2105PA5MAP (10/01/2020 ? 9/30/2021) Finding 2022 ? 014: (continued) Type of Finding: Significant Deficiency, Noncompliance for Medicaid Cluster Material Weakness, Material Noncompliance for Other Programs Compliance Requirement: Subrecipient Monitoring Condition: Under the Commonwealth of Pennsylvania's (Commonwealth) implementation of the Single Audit Act, review and resolution of subrecipient Single Audit reports is split into two stages. The Office of the Budget?s Bureau of Accounting and Financial Management (OB-BAFM) ensures the reports meet technical standards through a centralized desk review process. The various funding agencies in the Commonwealth are responsible for making a management decision on each finding within six months of the Federal Audit Clearinghouse?s (FAC) Management Decision Letter (MDL) start date for audits subject to Uniform Guidance and to ensure appropriate corrective action is taken by the subrecipient (except for Uniform Guidance audits under U.S. Department of Labor programs which are permitted 12 months for management decisions in accordance with 2 CFR Section 2900.21). Each Commonwealth agency is also responsible for reviewing financial information in each audit report to determine whether the audit included all pass-through funding provided by the agency in order to ensure pass-through funds were subject to audit. Most agencies meet this requirement by performing Schedule of Expenditures of Federal Awards (SEFA) reconciliations. The agency is also required to adjust Commonwealth records, if necessary. Our fiscal year ended June 30, 2022 audit of the Commonwealth?s process for review and resolution of subrecipient Single Audits included an evaluation of the Commonwealth?s fiscal year ended June 30, 2021 subrecipient audit universe for audits due for submission to the FAC during the fiscal year ended June 30, 2022. We also evaluated the Commonwealth?s review of 44 subrecipient audit reports with findings in major programs/clusters which were identified on the Commonwealth agencies? tracking lists during the fiscal year ended June 30, 2022 and required management decisions by Commonwealth agencies. Our testing disclosed the following audit exceptions regarding the Commonwealth agencies? review of subrecipient audit reports: ? Department of Education (PDE): The time period for making a management decision on findings was approximately 6.5 to over 13 months after the FAC MDL start date for 14 out of 25 audit reports with findings. Three of the 14 audit reports were improperly classified on PDE?s audit tracking list as not having federal award findings. ? Department of Environmental Protection (DEP): The time period for making a management decision on findings was approximately 16.2 months after the FAC MDL start date for one out of three audit reports with findings. In addition, our review disclosed that DEP subgranted federal funds totaling $10,338,570 to one subrecipient during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended due to the COVID-19 pandemic in accordance with the Office of Management and Budget?s (OMB) Memorandum M-21-20, Appendix 3. ? Department of Health (DOH): Our review disclosed that DOH subgranted federal funds totaling $8,103,407 to one subrecipient during the fiscal year ended September 30, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 12.5 months after the December 31, 2021 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. ? Department of Human Services (DHS): The time period for making a management decision on findings ranged from approximately 6.6 months to over 19.6 months after the FAC MDL start date for 12 out of 14 subrecipient audit reports with findings. There was also a delay in DHS?s procedures to ensure the subrecipient SEFAs were accurate so that major programs were properly determined and subjected to audit. Finding 2022 ? 014: (continued) As a follow-up to the prior year finding, we noted that the Commonwealth subgranted federal funds totaling $327,988,063 to the City of Philadelphia during the fiscal year ended June 30, 2021, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 3.5 months after the September 30, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. Our testing disclosed that DHS?s subgrants to the City of Philadelphia were material for five of the 16 major programs/clusters with material subgranted funds. Our follow-up on the prior year finding also disclosed that the Commonwealth subgranted federal funds totaling $28,725,212 to Bucks County during the fiscal year ended December 31, 2020, for which a Single Audit was not submitted to the FAC as of our January 2023 testing date. This was over 9.5 months after the March 31, 2022 due date, which had been extended in accordance with OMB?s Memorandum M-21-20, Appendix 3. DHS was the lead agency for the City of Philadelphia and Bucks County audits. Criteria: 2 CFR ?200.332, Requirements for pass-through entities, states in part: All pass-through entities must: (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by ?200.521 [Management decision]. (f) Verify that every subrecipient is audited as required by Subpart F [Audit Requirements] of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ?200.501 [Audit requirements]. (g) Consider whether the results of the subrecipient?s audit, on-site review, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ?200.339 [Remedies for noncompliance] of this part and in program regulations. In order to carry out these responsibilities properly, good internal control dictates that state pass-through agencies ensure subrecipient Single Audit SEFAs are representative of state payment records each year, and that the related federal programs have been properly subjected to Single Audit procedures. 2 CFR ?200.512, Report submission, states in part: (a) General. (1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor?s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Finding 2022 ? 014: (continued) 2 CFR ?200.521, Management decision, states in part: (a) General. The management decision must clearly state whether or not the finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. 2 CFR ?200.505, Sanctions, states: In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities must take appropriate action as provided in ?200.339 [Remedies for noncompliance]. 2 CFR ?200.339, Remedies for noncompliance, states in part: If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in ?200.208 [Specific conditions]. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances. (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. To ensure Commonwealth enforcement of federal regulations for subrecipient noncompliance with audit requirements, Commonwealth Management Directive 325.08, Amended ? Remedies for Recipient Noncompliance with Audit Requirements, Section 5 related to policy, states in part: (a) Agencies must develop and implement remedial action that reflects the unique requirements of each program? (b) The remedial action should be implemented within six months from the date the first remedial action is initiated. At the end of the six-month period, the recipient should take the appropriate corrective action or the final stage of remedial action should be imposed on the recipient. Examples of remedial action include, but are not limited to: Finding 2022 ? 014: (continued) (1) Meeting or calling the recipient to explain the importance and benefits of the audit and audit resolution processes, emphasizing the value of the audit as an administrative tool and the Commonwealth?s reliance on an acceptable audit and prompt resolution as evidence of the recipient?s ability to properly administer the program. (2) Encouraging the entity to establish an audit committee or designate an individual as the single point of contact to: (a) Communicate regarding the audit. (b) Arrange for and oversee the audit. (c) Direct and monitor audit resolution. (3) Providing technical assistance to the recipient in devising and implementing an appropriate plan to remedy the noncompliance. (4) Withholding a portion of assistance payments until the noncompliance is resolved. (5) Withholding or disallowing overhead costs until the noncompliance is resolved. (6) Suspending the assistance agreement until the noncompliance is resolved. (7) Terminating the assistance agreement with the recipient and, if necessary, seeking alternative entities to administer the program. Management Directive 325.09, Amended ? Processing Subrecipient Single Audits of Federal Pass-Through Funds, Section 7 related to procedures, states in part: c. Agencies. (1) Evaluate single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. (6) Issue management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR ?200.521. If responsible for the resolution of crosscutting findings, notify the affected agency or agencies upon resolution of such findings. (7) Impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. Management Directive 325.12, Amended ? Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office?s, Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Cause: One reason provided by Commonwealth management for untimely audit resolution in the various agencies, including making management decisions, approving corrective action, and performing procedures to ensure the accuracy of subrecipient SEFAs, was either a change in staff or a lack of staff to follow up and process subrecipient audit reports more timely. The late management decision at DEP appeared to be the result of a subrecipient being treated as a contractor as described in current year Single Audit Finding #2022-005, despite having a subrecipient Single Audit requirement clause in its contract with DEP. Regarding late and outstanding audit report submissions, the Commonwealth agencies did not appear to be timely implementing remedial action steps in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.8 in order to ensure compliance with federal audit submission requirements. Finding 2022 ? 014: (continued) Effect: Since required management decisions were not made within six months to ensure appropriate corrective action was taken on audits received from subrecipients, the Commonwealth did not comply with federal regulations, and subrecipients were not made aware of acceptance or rejection of corrective action plans in a timely manner. Further, noncompliance may recur in future periods if control deficiencies are not corrected on a timely basis, and there is an increased risk of unallowable charges being made to federal programs if corrective action and recovery of questioned costs is not timely. Regarding the SEFA reviews or alternate procedures which are not being performed timely and the late Single Audit report submissions, there is an increased risk that subrecipients could be misspending and/or inappropriately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis as required. Finally, additional federal pass-through funds may be unaudited in the future without timely and effective remedial action from Commonwealth agencies to enforce compliance. Recommendation: We recommend that the above weaknesses that cause untimely subrecipient Single Audit resolution, including untimely management decisions on findings, untimely review of the SEFA or alternate procedures, and late audit report submissions be corrected to ensure compliance with federal requirements and Commonwealth Management Directives, and to better ensure timelier subrecipient compliance with program requirements. Commonwealth agencies should promptly pursue outstanding audits and implement remedial action steps on a timely basis in accordance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08. PDE Response: PDE agrees with the finding. DEP Response: DEP agrees with the finding. DOH Response: DOH agrees with the finding. DHS Response: While DHS agrees with this finding, we believe we are in compliance with 2 CFR ?200.339 and Commonwealth Management Directive 325.08 related to outstanding audits. We continue to work with counties and their independent auditors to obtain any late Single Audit reports, and albeit late, we do receive them which is the ultimate goal. Questioned Costs: The amount of questioned costs cannot be determined. The corrective action plan for this finding, if any, has not been reviewed by the auditors. See Corrective Action Plans located elsewhere in this Report.