Finding Text
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: ACL Centers for Independent Living
Assistance Listing Number: 93.432
Federal Award Identification Number and Year:
2004WAILC3 - 2021
2006WAILC3 - 2021
2104WAILCL - 2022
2106WAILCL - 2022
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period:
2004WAILC3 - 4/1/2020-9/30/22
2006WAILC3 - 4/1/20-9/30/22
2104WAILCL - 9/30/21-9/29/23
2106WAILCL - 9/30/21-9/29/23
Type of Finding:
Subrecipient Monitoring/Procurement
• Material Weakness in Internal Control over Compliance
• Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Per 2 CFR Part 200.331, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a subcontractor. If a subrecipient has been identified, per 2 CFR Part 200, Subpart F, pass through entities must notify subrecipients that they are receiving Federal funds as a subrecipient and must therefore comply with federal statutes, regulations, and the terms and conditions of the award. Additionally, pass through entities must keep documentation of monitoring the subaward. The pass through entity must have a control process in place to ensure it is in compliance with federal requirements related to subrecipient monitoring. If a subcontractor has been identified (and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D, the entity must have and use documented procurement procedures such as drafting a procurement policy, obtaining qualified bids, performing cost analyses and justifying reason for final selection.
Condition: While there existed sophisticated procedures for reviewing, approving and monitoring applicants, they did not meet all of the Federal requirements for either that of subrecipients or subcontractors.
Questioned costs: $62,857 In known questioned costs.
Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to use and disseminate the funds within the community for the purposes of supporting individuals with disabilities who were impacted by COVID and creating professional relationships in further support of individuals with disabilities. DEC was not aware of the Federal Uniform Guidance guidelines requiring DEC to make the determination of whether the vendors meet the characteristics of a subrecipient or a subcontractor and therefore did not follow the required procedures. This is an isolated instance due to the specific nature of the CARES ACT funds as DEC is not able to engage in these activities with other Federal grants.
Cause: DEC did not designate these vendors as either subrecipients or subcontractors and therefore did not follow the Federal Uniform Guidance guidelines.
Effect: Pass through entities, subcontractors and/or subrecipients could be out of compliance and misusing Federal funds.
Repeat Finding: No
Recommendation: CLA recommends DEC review the Uniform Guidance in relation to subrecipients and subcontractors, and for each vendor under contract, make a clear determination of which type of contract they fall under. Contracts should be drafted in conformity with either subrecipients or subcontractors (as directed by the Uniform Guidance).
Views of responsible officials: There is no disagreement with the audit finding.