Finding Text
Federal agency: U.S. Treasury Department Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.019 Pass-Through Agency: Prince William County Pass-Through Number(s): 117203461 Award Period: 3/11/2022 – 12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Uniform Guidance §200.331 and §200.332 requires pass-through entities to ensure that subrecipients comply with Federal statutes, regulations, and the terms and conditions of their subawards. This includes performing subrecipient monitoring procedures such as reviewing financial and programmatic reports, following up on identified deficiencies, and issuing management decisions for audit findings. Condition: The auditee did not have documented policies or procedures in place to monitor subrecipients for compliance with federal award requirements. Specifically, the auditee did not perform or document required subrecipient monitoring activities, such as review of financial or programmatic reports, verification of compliance with applicable federal requirements, or follow-up on subrecipient audit results, for the fiscal year under audit. Questioned costs: $2,246,007; Questioned costs reflect only funds passed through to subrecipients and exclude amounts expended directly by the auditee. Context: Due to the absence of subrecipient monitoring controls and procedures, unable to determine whether subrecipients complied with applicable federal requirements. As a result, the entire amount of subrecipient expenditures was considered noncompliant and was reported as questioned costs. This finding affected all subawards under the program. Cause and Effect: Management did not establish or maintain formal subrecipient monitoring policies and procedures and did not assign sufficient resources or oversight responsibility to ensure compliance with Uniform Guidance requirements governing subrecipient monitoring. As a result of the lack of subrecipient monitoring, the auditee was unable to ensure subrecipient compliance with federal award requirements. This resulted in material noncompliance, a material weakness in internal control over compliance, and material questioned costs totaling approximately $2.2 million, representing the full amount of federal funds passed through to subrecipients under the program. This finding resulted in an adverse opinion on compliance for the major program. Repeat Finding: Yes; 2023-002 Recommendation: We recommend that the Alliance establishes a formal policy for sub-recipient monitoring in accordance with requirements outlined in 2 CFR §200.331 and 2 CFR §200.332 to ensure its sub-recipients are properly monitored. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding. The Alliance performed certain monitoring activities; however, documentation was not retained in a manner sufficient to demonstrate compliance with Uniform Guidance requirements. This policy has since been revised to save the monitoring documentation to the grant management software. Contact person responsible for corrective action: Lisa Wolf, Board Chair. Anticipated Completion Date: June 30, 2026