Finding 1061995 (2022-001)

Finding 2022-001: Material weakness in internal controls over compliance for earmarking and material noncompliance for earmarking in the U.S. Refugee Admissions Program: Criteria or Specific Requirements: The underlying awards identify an earmarking requirement requiring thresholds of direct assistance to be provided on behalf of each eligible arriving refugee. Award number SPRMCO21CA3005 and SPRMCO22CA0025 states that at least $1,225 will be used to cover payments made to or on behalf of a refugee for cash disbursements or material goods, as needed, to meet the program's requirements. No less than $1,025 of this $1,225 must be spent for or on behalf of each refugee during that refugee's reception and replacement (R&P) and Afghan placement and assistance (APA) program service delivery period. Up to $200 of this $1,225 may be pooled into a flexible fund to spend on behalf of other vulnerable refugees assigned to the same affiliate/sub-office who have unmet needs during their R&P period (within 90 days of the refugee’s arrival date). Award number 323-23-00 states at least $1,275 is to be used to cover payments made to or on behalf of refugees for cash disbursements or for material goods, as needed, to meet the program's requirements. No less than $1,075 of this $1,275 must be spent for or on behalf of each refugee during that refugee reception and replacement (R&P) service delivery period. Up to $200 of this $1,275 may be pooled into a flexible fund to spend on behalf of other vulnerable refugees assigned to the same affiliate/sub-office with unmet needs during their R&P period (within 90 days of the refugee’s arrival date). Conditions: During the testing, 11 Out of 24 sample tests did not meet the minimum spending requirement within 90 days of the refugee's arrival date. Cause: Internal controls were not in place to ensure earmarking requirements were met. Effect: The Organization may not have met earmarking requirements outlined in the underlying award agreements nor have controls to monitor that earmarking requirements were met effectively. Questioned costs: None. Auditor's Recommendation: We recommend that the Organization implement a process to identify the value of direct assistance provided to each eligible refugee as recorded within the financial records. Further, we recommend that internal controls over compliance be implemented to monitor direct aid distribution and meet the earmarking requirements included within the grant terms.