Finding 1055337 (2023-001)

Finding: 2023-001 Reporting Finding Type: Noncompliance, Significant Deficiency Identification of the Federal Program(s): U.S. Department of Labor: 17.235 – Senior Community Service Employment Program Criteria: Federal Funding Accountability and Transparency Act Aspects of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282) (Transparency Act), as amended by Section 6202 of Pub. L. No. 110-252, that relate to subaward reporting (1) under grants and cooperative agreements were implemented in OMB in 2 CFR Part 170 and (2) under contracts, by the regulatory agencies responsible for the Federal Acquisition Regulation (FAR at 5 FR 39414 et seq., July 8, 2010). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. There are limited exceptions as specified in 2 CFR Part 170 and the FAR. The guidance at 2 CFR Part 170 currently applies only to federal financial assistance awards in the form of grants and cooperative agreements (e.g., it does not apply to loans made by a federal agency to a recipient); however, the subaward reporting requirement applies to all types of first-tier subawards under a grant or cooperative agreement. Direct recipients are required to report each first-tier subaward or subaward amendment that results in an obligation of $30,000 or more in federal funds. Prime contractors are required to report each first-tier subcontract award of $30,000 or more in federal funds. Grant and cooperative agreement recipients and contractors are required to register in FSRS and report subaward data through FSRS. To do so, they will first be required to register in the System for Award Management (SAM) (if they have not done so previously for another purpose (e.g., submission of applications through Grants.gov) and actively maintain that registration. Prime contractors have previously been required to register in SAM. Information input to FSRS is available at USASpending.gov as the publicly available website for viewing this information (https://www.usaspending.gov/search). Certain key data elements are required to be reported on the Federal Funding Accountability and Transparency Act (FFATA) report via the FSRS system. Per the 2023 OMB Compliance Supplement, the amount of subaward is defined as, “the net dollar amount of federal funds awarded to the subawardee including modifications.” Condition: NUL has an obligation to report subaward data as required under the FFATA. This includes subawardee information, such as subaward amount, subawardee DUNS or UEI number, and relevant executive compensation, if applicable. We selected six AL# 17.235 subawards for testing from a population of fourteen subawards. For three of the six subawards tested, NUL reported the subaward amount incorrectly, whereby they incorrectly included the non-federal match amount in the amount reported on the FFATA report via the FSRS system. The total federal funds of the three subawards is $6,423,181.48 per the subaward agreements. The total subaward amount for the three subawards was reported as $7,214,253.03, which incorrectly included $791,071.55 of non-federal match funds. When we brought these exceptions to NUL’s attention, NUL immediately corrected the FFATA report to reflect the correct federal subaward amounts for all three subawards. The exceptions are summarized in the chart below. See Schedule of Findings and Questioned Costs for charts. Cause: Due to oversight, for three subawards, NUL included both the federal award amount and the nonfederal match amount as the amount of subaward on the FFATA report via the FSRS system. Effect: NUL did not submit subaward information in certain FFATA reports accurately. Questioned Costs: None. Repeat Finding: Repeat finding of 2022-001 Recommendation: We noted significant improvement in the progress NUL has made toward addressing the prior year finding. Going forward, we recommend that, as part of NUL’s review of the FFATA reports prior to submission, NUL ensures that the subaward amount reported on the FFATA report reflects only the total federal subaward amount, excluding the non-federal matching amount. View of Responsible Officials: See management’s corrective action plan.