Finding 1140578 (2024-001)

Section III – Federal Award Findings and Questioned Costs Finding 2024-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development United States Department of State Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 19.421 – Department of State Bureau of Educational and Cultural Affairs: Academic Exchange Programs – English Language Program Federal Award Identification Number 98.001 – 7200AA22CA00016; 72048619CA00001; 7200AA18CA00011; 7200AA19CA00002; 19.421 – SECAGD19CA0156 Award Year: FY 2024 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework,’ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: Under Assistance Listing 19.421, we tested a total of five subrecipients, for which subaward agreements were executed in FY 2024 or had modifications to existing subaward agreements in FY 2024, and noted the following "See chart in the audit report" Under Assistance Listing 98.001, we tested a total of 43 subrecipients, for which subaward agreements were executed in FY 2024 or had modifications to existing sub-award agreements in FY 2024, and noted the following: ""See chart in the audit report" Cause: A detailed review of all new subaward agreements and/or modifications made during fiscal year 2024 was not performed to identify reports that should have been submitted timely. Effect or Potential Effect: FHI 360 did not submit the required reports or submitted the reports late for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: None  Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met, and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the untimely or non-submission of the reports. Total federal expenditures and total subrecipient expenditures for Assistance Listing 19.421, as reported on the Schedule of Expenditures of Federal Awards (SEFA) for fiscal year ended September 30, 2024 were $27,632,329 and $928,247, respectively. Total federal expenditures and total subrecipient expenditures for Assistance Listing 98.001, as reported on the SEFA for fiscal year ended September 30, 2024 were $491,851,680 and $165,282,920, respectively. Identification as a Repeat Finding: This is a repeat finding from prior year (2023-001 and 2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are submitted timely to be in compliance with the federal reporting requirements.   Views of Responsible Officials: Management will continue to implement actions to enhance and strengthen previous year corrective action plan activities including global communications and meetings with key management teams, targeted and detailed refresher training recommendations on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Further, management is currently implementing a system-based enhancement to capture signature data to provide centralized monitoring of execution date ensuring timely reporting based on execution dates of subawards.