Finding Text
FINDING REFERENCE NUMBER 2023-041 (See Finding Reference Number 2023-013)
FEDERAL PROGRAM (ALN – 93.556) MARYLEE ALLEN PROMOTING SAFE AND STABLE FAMILIES
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
AWARD NUMBER 2101PRFPSS (Federal Award Year: 2021)
ADMINISTRATION ADMINISTRATION FOR FAMILIES AND CHILDREN (ADFAN, BY ITS SPANISH ACRONYM)
COMPLIANCE REQUIREMENT MATCHING, LEVEL OF EFFORT, EARMARKING
TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS
CRITERIA The 45 CFR section 1357.32(d) establishes that funds used to provide services in FY 1994 and in subsequent years will be federally reimbursed at 75 percent of allowable expenditures. (This is the same Federal financial participation rate as Title IV-B, Subpart 1.) Federal funds, however, will not exceed the amount of the State's allotment.
(1)
The State's contribution may be in cash, donated funds, and non-public third party in-kind contributions.
(2)
Except as provided by Federal statute, other Federal funds may not be used to meet the matching requirement.
STATEMENT OF CONDITION As part of our audit procedures over internal controls and compliance with matching requirements, we selected the Grant Award 2101PRFPSS, which closed during the audit period from July 1, 2022, to June 30, 2023. ADFAN reported matching expenditures of $876,556.68. However, based on our review of the supporting database, actual matching expenditures amounted to only $808,043.75. This indicates that the required 25% match was not met. Additionally, according to the internal controls interviews and the information provided, the employees are not up to date with the program's Federal regulations. In the interview, they indicated that the percentage they used was 70% and 30% because they had always calculated it that way; they had not consulted the NOA, which indicates it is 75% and 25%.
QUESTIONED COSTS Undetermined.
PERSPECTIVE INFORMATION This deficiency is a systemic problem. Written internal control procedures should include proper training and that the notice of awards be discussed with the personnel in charge of working with all requirements, and monitoring compliance. ADFAN did not comply with the required matching for the 2101PRFPSS in the amount of $68,514.93.
STATEMENT OF CAUSE ADFAN does not have written internal controls procedures to ensure expenditure is monitored and aligned with the required matching percentage specified in the grant award.
POSSIBLE ASSERTED EFFECT ADFAN may be subject to a reduction in Federal funding if it fails to comply with program requirements.
IDENTIFICATION OF
REPEAT FINDING No reported as prior audit finding.
RECOMMENDATIONS We recommend that ADFAN establish written internal control procedures and implement them, to monitor the expenditure of allocated funds to ensure compliance with the required matching contribution.