Finding Text
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Subrecipient Monitoring • Other Matters Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.303 specifies that a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Evidence of subrecipient monitoring was not available for the five subrecipients selected for testing. Questioned costs: None. Context: Of the five subrecipients selected for testing, we noted that none of them had proper monitoring in place. Cause: The Association did not have internal control systems in place to adequately monitor subrecipients to ensure that the non-federal entity was in compliance with terms of the federal award. Effect: The Association could pass through federal funding to subrecipients who are not responsible or capable recipients of the funds. Funding could be used by the subrecipients in ways that are incompatible with program goals and compliance requirements. Repeat Finding: N/A. Recommendation: We recommend that the Association implement policies and procedures to ensure the performance of subrecipient monitoring and that the monitoring is formally documented and approved. Views of responsible officials: There is no disagreement with the audit finding.