Finding 1151198 (2024-001)

Identification of the federal program: Federal Agency and Program Name: U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA) Healthy Start Initiative Award Year(s): 2024 Assistance Listing #: 93.926 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282) (Transparency Act) that are codified in 2 CFR Part 170, “unless the auditee is exempt as provided in paragraph d. of this award term, the auditee must report each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency no later than the end of the month following the month in which the obligation was made.” 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) per submission instructions posted at http://www.fsrs.gov.Condition: During our audit, we noted three instances where the required Federal Funding Accountability and Transparency Act (FFATA) reports were not submitted in the FSRS in FY 2024. In addition, we noted for all four FFATA reports that were submitted in FSRS in FY 2024, there was no evidence of review and approval of the reports prior to submission. Cause: Corewell did not have sufficient internal controls to ensure that the required FFATA reports were submitted and that all reports are reviewed prior to submission. Effect or potential effect: Corewell did not submit the necessary FFATA report under the Healthy Start Initiative (HSI) project for each first-tier subaward modifications over $30,000 in FSRS and consequently was not in compliance with the requirements under the Transparency Act. Additionally, lack of review could potentially result in incorrect information included in the reports. Questioned costs: $0 Context: Under the HSI program, there were four subrecipients that had a total of seven subawards (four new agreements and three amendments) in FY 2024. The three subaward modifications for which FFATA reports were not submitted totaled $278,805. Total subrecipient’s costs are $736,165 in FY 2024. The total federal expenditures for the HSI program for FY 2024 were $1,108,849. Identification as a repeat finding, if applicable: Not a repeat finding.Recommendation: We recommend management strengthen its internal controls and procedures over the review of subrecipient awards and amendments to ensure the required FFATA reports are submitted to be in compliance with the Federal Transparency Act. In addition, we also recommend management to implement documenting the review of FFATA reports prior to their submission. Views of responsible officials: Management will develop a written procedure for FFATA reporting that includes specific instructions for reporting amended subawards throughout the award period. Additionally, the procedure will include review and approval of the report prior to submission. This process will be disseminated to the Office of Sponsored Programs team and reviewed on a regular basis for ongoing education and compliance purposes.