Finding 1214641 (2023-006)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2026-05-13

Audit: 401348

Organization: Micronesia Conservation Trust (FM)

Auditor: ERNST & YOUNG LLP

AI Summary

Core Issue: The Trust failed to file two required FFATA subaward reports for subawards over $30,000.
Impacted Requirements: Noncompliance with 2 CFR 170.000 reporting requirements for federal grants.
Recommended Follow-Up: Implement internal controls to ensure timely reporting of subawards and compliance with FFATA requirements.

Finding Text

Finding No. : 2023-006 Federal Agency: Agency for International Development AL Program: 98.001 Foreign Assistance for Programs Overseas Federal Award Nos.: 72049220C00004 Area: Reporting Questioned Costs: $0 Criteria: In accordance with 2 CFR 170.000, recipients of a federal grant are required to file a Federal Funding Accountability and Transparency Act (FFATA) subaward report if the recipient grants any subaward equal to or greater than $30,000 in federal funds. Under reporting requirements, the recipient must report each subaward of this award term to the FFATA Subaward Reporting System (FSRS) at http://www.fsrs.gov. The key data elements to be reported include subawardee name, subawardee Data Universal Numbering System (DUNS) number, amount of subaward, subaward obligation/action date, date of report submission, subaward number, subaward project description, subawardee names and compensation of highly compensated officers. The subaward report should be submitted no later than the end of the month following the month in which the subaward was issued. Condition: The Trust is required to file eight (8) reports to the federal grantor for fiscal year 2023. These comprise of three (3) financial reports, three (3) progress narrative reports, and two (2) special reports related to FFATA Subaward Reporting System (FSRS). However, the Trust did not file two (2) of these reports. The Trust has two (2) subaward agreements that exceed the $30,000 federal funds criteria set by FFATA. Cause: The Trust does not have procedures and internal controls in place to determine the special reporting requirements under the FFATA. Effect: The Trust is in noncompliance with applicable reporting requirements related to FFATA. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Trust should establish internal controls requiring periodic review of the applicable reporting requirements involving subawards. Views of Responsible Officials: Management agrees with the finding. See separate Corrective Action Plan

Corrective Action Plan

Finding No.: 2023-006 Area: Reporting Views of responsible official and planned corrective actions: The Trust has updated its due diligence checklist to include speciﬁc steps to ensure compliance with Federal Funding Accountability and Transparency Act (FFATA) requirements. This includes identifying qualifying subawards, collecting required reporting data, and ensuring timely submission of reports. These procedures have been integrated into the Trust’s grant management processes to strengthen internal controls and support full compliance with applicable federal regulations and grantor expectations. Contact Person: Melanie Lawrence Aiseam, Chief Financial Officer Expected Completion Date: The Trust started working on the checklist last year and finalized it in Q4 2025.

Other Findings in this Audit

1214637 2023-002

Material Weakness Repeat
1214638 2023-003

Material Weakness Repeat
1214639 2023-004

Material Weakness Repeat
1214640 2023-005

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
98.001	USAID FOREIGN ASSISTANCE FOR PROGRAMS OVERSEAS	$286,185
11.482	CORAL REEF CONSERVATION PROGRAM	$75,382
15.875	ECONOMIC, SOCIAL, AND POLITICAL DEVELOPMENT OF THE TERRITORIES	$48,705
10.664	COOPERATIVE FORESTRY ASSISTANCE	$1,298