Finding Text
Finding No.: 2023-020 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.243 Substance Abuse and Mental Health Services – Projects of Regional and National Significance Federal Award No.: 5U79SP020711-04 Questioned Costs: $134,802 Area: Subrecipient Monitoring/Overpayment on Return of Federal Funds Criteria: In accordance with applicable subrecipient monitoring requirements per 2 CFR 200.332, a pass- through entity (PTE) must: 1) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, is used in accordance with the terms and conditions of the subaward, and achieves performance goals. 2) Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies detected through audits, on-site reviews, and other means, pertaining to the subaward. 3) Issue a management decision as required by 2 CFR 200.521 for audit findings pertaining to the Federal award provided to the subrecipient from the PTE . Condition: RepMar did not perform the required monitoring activities for a subrecipient and did not issue a management decision with respect to the subrecipient’s FY2018 Single Audit report dated February 22, 2023. The Single Audit reported questioned costs of $43,335 for noncompliance with allowable costs/cost principles requirements and questioned costs of $91,467 for noncompliance with procurement and suspension and debarment requirements. Furthermore, in the grantor’s March 2023 management decision communication, RepMar was required to refund the grantor for Federal funds reported for noncompliance in the same subrecipient’s FY2016 and FY2017 Single Audit reports. RepMar has since determined that the July 2024 refund included a $267,244 overpayment due to calculation error. Cause: RepMar lacks effective internal control policies and procedures governing subrecipient monitoring. Effect: RepMar is in noncompliance with applicable subrecipient monitoring requirements and overpayment of Federal funds returned. Questioned cost of $134,802 results. Recommendation: RepMar should more closely monitor subrecipients in accordance with subrecipient monitoring requirements. Views of Responsible Officials: RepMar’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.