Finding 1182163 (2025-004)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2025

Accepted

2026-03-23

Audit: 393530

Organization: State of Hawai'i, Department of Hawaiian Home Lands (HI)

Auditor: ACCUITY LLP

AI Summary

Core Issue: A subaward reporting requirement under FFATA was not fulfilled, leading to a material weakness in compliance.
Impacted Requirements: Prime recipients must report subawards over $30,000 to FSRS by the end of the following month, as mandated by 2 CFR Part 170.
Recommended Follow-Up: Enhance internal controls for subaward reporting, including staff training and management reviews to ensure timely compliance.

Finding Text

Ques􀆟oned Cost $ – Finding No. 2025-004: Repor􀆟ng (Material Weakness) Federal Agency: U.S. Department of Defense AL Number and Title: 12.600 – Community Investment Award Number and Award Year: HQ00052310045 2024 Repeat Finding? No Condition During our audit, we tested a non-statistical sample of one subaward and found that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of FFATA was not completed at all. Criteria In accordance with the FFATA and the requirements of 2 CFR Part 170, Appendix A, prime recipients of federal grants are required to report each subaward of greater than or equal to $30,000. Each subaward must be reported to the FSRS no later than the end of the following month in which the subaward was made. Effect Failure to file required reports reduces transparency on the use of program funds and represents an instance of noncompliance with the requirements of 2 CFR Part 170. Cause and View of Responsible Officials Program personnel incorrectly classified the associated subaward as a contract and were unaware of the FFATA reporting requirement applicable for subawards until the audit. Recommendation We recommend that management should strengthen their internal controls over subaward identification and reporting. This includes mandatory training for staff involved in federal grant administration and a management-level review of all subawards to ensure FFATA reporting is completed timely.

Corrective Action Plan

Finding No. 2025-004: Reporting AL No.: 12.600 Program Title: Community Investment Grant Award Number: HQ00052310045 Condition During our audit, we tested a non-statistical sample of one subaward and found that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) was not completed at all. Corrective Action Plan The Department of Hawaiian Home Lands (“DHHL”) will change internal grants administrative procedures to better account for the submittal of the FFATA and the requirements of 2 CFR Part 170, Appendix A. A report will be submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System by February 28, 2026. Person Responsible Lilliane Makaila, Acting Planning Program Manager Anticipated Date of Completion The FFATA report will be submitted by February 28, 2026.

Other Findings in this Audit

1182157 2025-001

Material Weakness Repeat
1182158 2025-002

Material Weakness Repeat
1182159 2025-003

Material Weakness Repeat
1182160 2025-001

Material Weakness Repeat
1182161 2025-002

Material Weakness Repeat
1182162 2025-003

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
12.600	COMMUNITY INVESTMENT	$3.24M
14.873	NATIVE HAWAIIAN HOUSING BLOCK GRANTS	$1.69M
10.760	WATER AND WASTE DISPOSAL SYSTEMS FOR RURAL COMMUNITIES	$200,762
11.029	TRIBAL BROADBAND CONNECTIVITY PROGRAM	$192,428
21.029	CORONAVIRUS CAPITAL PROJECTS FUND	$45,813
97.036	DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS)	$5,746