Finding 1217822 (2025-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-06-17

AI Summary

  • Core Issue: The Foundation failed to report subawards as required by federal grant agreements.
  • Impacted Requirements: Reporting obligations under the Federal Funding Accountability Transparency Act (FFATA) were not met.
  • Recommended Follow-Up: The Foundation should consult with the federal funding agency for guidance on proper reporting procedures.

Finding Text

Condition Proper reporting was not completed in accordance with the grant agreements. Criteria The Foundation is responsible for establishing and maintaining effective internal controls that provide reasonable assurance the Foundations is managing federal awards in compliance with the terms and conditions of the federal awards. In accordance with the Federal Funding Accountability Transparency Act (FFATA), the Foundation had an obligation to report first-tier subawards under Federal grants that are funded at $30,000 or more that meet the reporting conditions as set forth in the grant award term. Cause The Foundation had made the determination that the community colleges that they provided funding to were contractors and not subrecipients. This was an incorrect determination as the community colleges did not provide any goods or services to the Foundation in exchange for the funds distributed and as such should have been considered subrecipients and reported in accordance with the FFATA regulations. Effect The Foundation did not file three FFATA reports in accordance with the grant agreements. Questioned costs $-0- Recommendation The Foundation should consult with the federal funding agency to determine the requirements for proper reporting in accordance with the grant agreements.

Corrective Action Plan

View of Responsible Officials In partnership with the federal program officers assigned to the three federal grant awards, the Foundation filed all required reporting available in SAM.gov by the specified due dates. Action taken: Following the government reopening, the Foundation reached out multiple times to the federal program officers to clarify and determine the requirements for proper reporting in accordance with the grant agreements. The response received was that they were not familiar with the Federal Funding Accountability Transparency Act and suggested filing the report independently. Action planned: Based on the response, the Foundation will file the required reporting. Specific steps: The Foundation will work with the U.S. Department of Education to ensure the proper steps for filing the missing reports are taken and all required information is submitted. In addition, the Foundation will develop and implement a written policy to provide clear guidance on FFATA reporting responsibilities, including the criteria for identifying reportable subawards and the required submission process and deadlines alongside an internal review process. Responsibility: • The Director of Development, Chief Operating Officer, and Finance Manager will ensure the three FFATA reports are filed. • The Chief Operating Officer and Finance Manager will work to draft the policy and will bring it to the Audit Committee for review and approval. Timeline: • The Foundation will file required reporting alongside due dates outlined by Federal Funding Accountability Transparency Act. • Policy approved and implemented by March 2026.

Categories

Subrecipient Monitoring Reporting

Other Findings in this Audit

  • 1217815 2025-001
    Material Weakness Repeat
  • 1217816 2025-002
    Material Weakness Repeat
  • 1217817 2025-003
    Material Weakness Repeat
  • 1217818 2025-001
    Material Weakness Repeat
  • 1217819 2025-002
    Material Weakness Repeat
  • 1217820 2025-003
    Material Weakness Repeat
  • 1217821 2025-001
    Material Weakness Repeat
  • 1217823 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.116 FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION $1.48M