Finding 1151684 (2023-002)

2023-002 Compliance and Internal Controls over Subrecipient Fiscal Monitoring (Significant Deficiency) (Repeat) U.S. Department of Health and Human Services 93.917 – HIV Care Formula Grants Passed through Texas Department of State Health Services Award Periods: April 1, 2022 to March 31, 2024 Contract No. HHS001022300001 Texas Department of State Health Services HIV Care Formula Grants Award Periods: April 1, 2022 to March 31, 2024 Contract No. HHS001022300001 Texas Department of State Health Services State HIV Service Grants Award Periods: April 1, 2022 to August 31, 2024 Contract No. HHS001022300002 Criteria: Pass-through entities are required to monitor subrecipients in accordance with 2 CFR Section 200.332. Further, under 2 CFR Section 200.303a, non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statutes, regulations, and the terms and conditions of the award. Condition: For the fiscal year ended December 31, 2023, The Resource Group did not timely perform financial monitoring of its subrecipients. Cause: Initially subrecipient monitoring was suspended due to COVID-19 in 2020 and reinstated late 2021. The Resource Group restarted their monitoring of subrecipients, however the monitoring was done by two individuals, one for programming and the other for financial monitoring. Monitoring of programming was completed timely, while the financial monitoring was not. Further, the Finance Director, who was responsible for the financial monitoring, resigned in 2023 and the successor Finance Director was hired in August 2023. After completing training to perform financial monitoring, the Finance Director completed financial monitoring during 2024. Effect: As a result of not completing all financial monitoring and the turnover in Finance Director, The Resource Group is not in compliance with grant requirements. Questioned Costs: None Noted Recommendation: The Resource Group should follow its policies to perform fiscal monitoring on its subrecipients in accordance with 2 CFR Section 200.332. Views of Responsible Officials: See corrective action plan.