Finding 1165828 (2019-009)

Material Weakness Repeat Finding
Requirement
M
Questioned Costs
-
Year
2019
Accepted
2025-12-19

AI Summary

  • Core Issue: The Company failed to provide documentation reconciling subaward expenditures to reimbursement requests, leading to non-compliance with subrecipient monitoring requirements.
  • Impacted Requirements: Compliance with Uniform Guidance and 2 CFR 200.302(b) and 2 CFR 200.403(g) regarding documentation and monitoring of federal awards.
  • Recommended Follow-Up: Strengthen monitoring controls, implement a reconciliation process, centralize documentation, train staff, and conduct periodic internal reviews.

Finding Text

Criteria: Under Uniform Guidance, pass-through entities must monitor subrecipients to ensure compliance with federal program requirement, review financial and performance reports submitted by subrecipients, and ensure that subaward expenditures are supported and allowable before including them in reimbursement requests to the pass-through entity. Under 2 CFR 200.302(b) and 2 CFR 200.403(g), non-federal entities must maintain adequate documentation to support all costs charged to federal awards, including amounts reimbursed through subaward arrangements. Statement of Condition: During our testing over the subrecipient monitoring compliance requirement, we noted that although the Company was able to provide documentation supporting certain subaward expenditures, the Company was unable to provide documentation that reconciled or agreed to the specific amounts submitted to RIDOH for reimbursement. As a result, we were unable to verify that the subaward expenditures included in the reimbursement requests were fully supported by underlying subrecipient records and that they were appropriately monitored prior to submission. Cause of Condition: The entity did not maintain documentation of internal control activities beyond the minimum required retention period and did not have processes in place to preserve institutional knowledge during employee turnover. As a result, supporting records necessary for compliance over subrecipient monitoring of federal awards were no longer available. Effect of Condition: Because the support for subaward expenditures did not agree to the amounts submitted to RIDOH the Company is not in compliance with subrecipient monitoring requirements under Uniform Guidance, there is an increased risk that unallowable, inaccurate, or unsupported subrecipient costs may be included in reimbursement requests, RIDOH does not have adequate assurance that the Company performed required oversight of subrecipient financial activity, and unsupported reimbursement amounts may be subject to recovery by the pass-through entity. Questioned Costs: Questioned costs total $127,813, representing the total subawards where documentation of subrecipient monitoring could not be provided. Recommendation: We recommend that management (1) strengthen subrecipient monitoring controls to ensure subrecipient expenditures are reconciled to reimbursement request amounts, (2) implement a standardized reconciliation process and maintain supporting documentation in a centralized location, (3) train staff involved in subrecipient monitoring and reimbursement submissions on Uniform Guidance requirements, and (4) perform periodic internal reviews to ensure compliance and documentation completeness. Identification of Repeat Finding: This is a new finding. Views of Responsible Officials: Management understands and accepts the recommendation as outlined in the Corrective Action Plan.

Corrective Action Plan

The fiscal coding system implemented in the accounting software includes specific codes for subrecipient expenditures, enabling clear tracking and reconciliation of subaward amounts. The new bookkeeping firm with ensure subrecipient expenditures are reconciled to reimbursement request amounts by February 28, 2026. Implement a standardized reconciliation process and maintain supporting documentation in a centralized location, including detailed reconciliation worksheets by March 31, 2026. Train staff involved in subrecipient monitoring and reimbursement submissions on Uniform Guidance requirements, including 2 CFR 200.332 pass-through entity responsibilities by April 30, 2026. Perform periodic internal reviews to ensure compliance and documentation completeness, with monthly reconciliation reviews during active subaward periods beginning May 2026. Develop comprehensive subrecipient monitoring procedures manual documenting all required monitoring activities, reporting requirements, and documentation standards by June 30, 2026. Establish annual risk assessments of subrecipients and implement risk-based monitoring approaches, including site visits for high-risk subrecipients by July 31, 2026.

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles

Other Findings in this Audit

  • 1165815 2019-003
    Material Weakness Repeat
  • 1165816 2019-004
    Material Weakness Repeat
  • 1165817 2019-005
    Material Weakness Repeat
  • 1165818 2019-006
    Material Weakness Repeat
  • 1165819 2019-007
    Material Weakness Repeat
  • 1165820 2019-008
    Material Weakness Repeat
  • 1165821 2019-009
    Material Weakness Repeat
  • 1165822 2019-003
    Material Weakness Repeat
  • 1165823 2019-004
    Material Weakness Repeat
  • 1165824 2019-005
    Material Weakness Repeat
  • 1165825 2019-006
    Material Weakness Repeat
  • 1165826 2019-007
    Material Weakness Repeat
  • 1165827 2019-008
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $248,753
39.003 DONATION OF FEDERAL SURPLUS PERSONAL PROPERTY $188,362
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $163,575
93.074 HOSPITAL PREPAREDNESS PROGRAM (HPP) AND PUBLIC HEALTH EMERGENCY PREPAREDNESS (PHEP) ALIGNED COOPERATIVE AGREEMENTS $58,671
93.136 INJURY PREVENTION AND CONTROL RESEARCH AND STATE AND COMMUNITY BASED PROGRAMS $9,867