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FINDING REFERENCE NUMBER 2024-012 FEDERAL PROGRAM (ALN 84.287) TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS U.S. DEPARTMENT OF EDUCATION AWARD NUMBERS S287C190039C (07/01/2019 – 09/30/2020); S287C200039C (07/01/2020 – 09/30/2021); S287C220039C (07/01/2022 – 09/30/2023) COMPLIANCE REQUIREMENT SUBRECIPIENT MONITORING TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA In accordance with 2 CFR § 200.332(f), pass-through entities are required to monitor the activities of subrecipients as necessary to ensure that the subaward is used for authorized purposes and in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. This includes reviewing subrecipient Single Audit reports to determine whether any audit findings related to the subaward exist and whether appropriate corrective actions are being taken. STATEMENT OF CONDITION As part of our audit procedures, we obtained the list of subrecipients active during the fiscal year 2023-2024, monitoring visit schedules and disbursements made. We selected a sample of three (3) subrecipients to test compliance with internal control policies and compliance with the subrecipient monitoring requirement. We noted the following deficiencies during our tests: 1. For three (3) subrecipients, we did not find any evidence of the receipt of the Single Audit Report or the required financial statements and special Agreed-Upon Procedure Report. 2. For three (3) subrecipients, we were unable to review the performance reports submitted by the subrecipients during the fiscal year because no documentation was provided for our evaluation. 3. The monitoring plan for the fiscal year 2023-2024 was not provided for our evaluation. QUESTIONED COSTS None PERSPECTIVE INFORMATION The PRDE does not maintain an internal control process that provides reasonable assurance of complying with the requirement of receipt, evaluation and issuance of management decisions as required by Federal regulations and the required corrections of any findings and disposition of questioned costs within the required timeframes of the Federal regulations from audit or monitoring process. STATEMENT OF CAUSE The PRDE did not have formal procedures in place to ensure timely collection and review of subrecipients’ Single Audit Report. Responsibilities for this function were not clearly assigned, and monitoring activities were inconsistently documented. POSSIBLE ASSERTED EFFECT Failure to review subrecipient Single Audit Reports increases the risk that audit findings or noncompliance at the subrecipient level may go undetected and unaddressed. This may lead to improper use of Federal funds and noncompliance with Federal requirements. IDENTIFICATION AS A REPEAT FINDING Not previously reported. RECOMMENDATION We recommend that the PRDE establish and implement formal procedures to: Identify all subrecipients subject to Single Audit requirements, obtain and review their audit reports in a timely manner, follow up on relevant audit findings, and maintain documentation of all monitoring activities performed. VIEWS OF RESPONSIBLE OFFICIALS The PRDE acknowledges the auditor’s finding. It Is important to note that information requested is available and exists just that it was not provided in a timely manner for evaluation. The PRDE and the area accepts the recommendations and will work on corrective action plans that help mitigate the delay in providing information per auditors’ requests. IMPLEMENTATION DATE None RESPONSIBLE PERSON Luis M. Oppenheimer Rosario Program Coordinator María de los Ángeles Lizardi Valdés Office of Federal Affairs Director