Finding Text
FINDING REFERENCE NUMBER 2024-039 FEDERAL PROGRAMS (ALN – 93.558) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 2022G996117 (Federal Award Year: 10/1/2021 – 9/30/2022) 2023G996117 (Federal Award Year: 10/1/20212 – 9/30/2023) 2401PRTANF1 (Federal Award Years: 10/1/2023 through 9/30/2026) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT REPORTING – SPECIAL REPORTS FOR FFATA TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA In accordance with 2 CFR Part 170, establishes that recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The non-Federal entity or Federal agency must report each obligating action to http://www.fsrs.gov. For subaward information, report no later than the end of the month following the month in which the obligation was made. STATEMENT OF CONDITION During our testing of reporting compliance requirements applicable to the TANF program, we noted that Administration for Socioeconomic Development of the Family (ADSEF) did not submit the required FFATA reports for applicable first-tier subawards equal to or exceeding $30,000 to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Based on the amounts reported in the SEFA, certain entities receiving TANF funds were identified as subrecipients as defined in 2 CFR 200.1. However, ADSEF does not have appropriate internal control procedures related to reporting requirements and, as a result, did not identify the related payments as reportable subawards under 2 CFR Part 170. Consequently, ADSEF could not provide evidence that the required FFATA subaward reports were submitted accurately and within the required reporting timeframe. QUESTIONED COSTS None. PERSPECTIVE INFORMATION ADSEF consultants identified entities for which they understand are subrecipients. There were a total of twenty (20) agreements/contracts executed during fiscal year 2023-2024 that could be subject to FFATA reporting requirements, however, ADSEF cannot certify if all are subrecipients. According to the audit procedures performed, the agency did not have an established process for identifying first-tier subawards subjects to reporting or for submitting the corresponding FFATA notification through the FSRS. The deficiency is systemic, since the situation stemmed from ADSEF's general process and methodology for classifying entities that receive TANF funds and determining the applicability of FFATA reports. STATEMENT OF CAUSE ADSEF did not establish adequate policies, procedures, and internal controls to properly evaluate and determine whether entities receiving TANF funds should be classified as subrecipients or contractors in accordance with 2 CFR 200.331. As a result, applicable subawards subject to FFATA reporting requirements were not identified and reported to FSRS. POSSIBLE ASSERTED EFFECT Failure to report first-tier subawards in FSRS results in noncompliance with Federal transparency and reporting requirements established under 2 CFR Part 170 and may impair public transparency and accountability over the use of Federal funds. IDENTIFICATION OF REPEAT FINDING No reported as prior audit finding. RECOMMENDATIONS We recommend that ADSEF strengthen its internal control procedures over FFATA compliance to ensure that all applicable first-tier subawards equal to or exceeding $30,000 are identified, monitored, and reported timely and accurately in FSRS in accordance with 2 CFR Part 170 requirements.