Finding Text
Finding 2023-004 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No: D23AF00012-01 (Education) D23AF00013-01 (Health) D22AF00326-01 (Supplemental Education) Area: Special Tests and Provisions Questioned Costs: $11,790 Criteria: 1. Pursuant to Compact Sector Health grants, assistance provided through the grant may not be used for advanced payments, except in limited circumstances and such payments must receive prior written concurrence by the office of insular affairs (OIA). 2. Pursuant to Compact Sector grants for the Education and Supplemental Education Grant (SEG) programs, all personnel funded under these grants are required annual performance evaluations for all funded personnel, with evaluations retained personnel files. Condition: 1. For 1 (or 1%) of 60 transactions tested, aggregating $1,187,753 out of $19,504,751 in program expenditures, the State made an advance payment using sector grant funds. No documentation was provided to evidence prior grantor agency concurrence to waive the specific special provision. 2. For 11 (or 23%) of 49 personnel records tested under the Compact Sector Education and Supplemental Education grants, no documentation was available to show that the annual performance evaluation had been performed. Cause: For advance payments, either concurrence was not obtained, or documentation was not retained; and a lack of familiarity with specific grant conditions may have contributed to the noncompliance. For evaluations, documentation retention controls over personnel files were inadequate. Effect: The State is not in compliance with the Compact Sector health grant program requirements; known questioned costs of $11,790 are being reported, with projected questioned costs exceeding $25,000. The State is not in compliance with the Education and Supplemental Education grant requirements for the education and supplemental education programs regarding personnel evaluation; no questioned cost were identified associated with above condition. Recommendation: The State should consider the following: 1. For the health grants, if advance payments are necessary, the State should (a) use general fund advances with later reimbursement; (b) establish a letter of credit; or (c) obtain prior OIA concurrence. 2. For the Education and Supplemental Education grants, the State should strengthen controls to ensure annual evaluations are completed and retained in personnel files. Identification as a Repeat Finding: N/A View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.