Finding Text
FINDING REFERENCE NUMBER 2025-011 FEDERAL PROGRAM (ALN 84.287) TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS U.S. DEPARTMENT OF EDUCATION AWARD NUMBERS S287C200039C (07/01/2020 – 09/30/2021); S287C220039C (07/01/2022 – 09/30/2023); S287C220039C (07/01/2022 – 09/30/2023) COMPLIANCE REQUIREMENT SUBRECIPIENT MONITORING TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA In accordance with 2 CFR § 200.332(f), pass-through entities are required to monitor the activities of subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. In additions to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by terms and conditions of the award, subaward monitoring must include the following: Reviewing financial and programmatic (performance and special reports) required by PTE, following-up and ensuring that the subrecipients takes timely and appropriate action on all deficiencies pertaining to the Federal award, provide the subrecipient from the PTE detected through audits, on site reviews, and other means, issuing a management decision for audits findings pertaining to the Federal award provided to the subrecipient from the PTE as requires by 2 CFR 200.521(c). STATEMENT OF CONDITION As part of our procedures on subrecipient requirements, based on the subrecipient monitoring procedures established by the PRDE in the “Manual de Programa 21st CCLC”, we requested the risk analysis that established the monitoring plan for a period of three (3) years, this information was not provided for our evaluation. Based on this monitoring plan they established the type of monitoring that they will perform to the subrecipient, site reviews, desk reviews or closing reviews. Based on the terms and conditions of the award all subrecipients are required to submit their Single Audit Reports, for review and evaluation. As part of our audit procedures, we obtained the list of subrecipients active during the fiscal year 2024-2025 with a total of eighteen (18) subrecipients. We selected a sample of four (4) subrecipients to test internal controls and compliance with the subrecipient monitoring requirement related to the submission of Single Audit Reports. During our test we noted the following deficiencies: 1. For one (1) subrecipient the management decision for the audit’s findings reported in the subrecipient Single Audit was not provided for our evaluation. 2. For one (1) subrecipient, they notify that the program expenditures were not included in the entity Schedule of Expenditures of Federal Awards, but no evidence of follow-up about this matter was provided for our evaluation. QUESTIONED COSTS None PERSPECTIVE INFORMATION The PRDE does not maintain an internal control process that provides reasonable assurance of complying with the requirement of receipt, evaluation and issuance of management decisions as required by Federal regulations and the required corrections of any findings and disposition of questioned costs within the required timeframes of the Federal regulations from audit or monitoring process. This is a systemic deficiency. The sampling was a statistically valid sample. STATEMENT OF CAUSE The PRDE did not adequate documentation related to the procedures to comply with the subrecipient monitoring requirements. Although procedures are established in the “Manual de Programa 21st CCLC” no evidence was provided to ensure compliance with the procedures established in the manual. POSSIBLE ASSERTED EFFECT Failure to review subrecipient monitoring requirement increases the risk that audit findings or noncompliance at the subrecipient level may go undetected and unaddressed. This may lead to improper use of Federal funds and noncompliance with Federal requirements. IDENTIFICATION AS A REPEAT FINDING This is a repeat finding (Finding Reference Number 2024-012). RECOMMENDATION We recommend that the PRDE establish and implement formal procedures to: Identify all subrecipients subject to Single Audit requirements, obtain and review their audit reports in a timely manner, follow up on relevant audit findings, and maintain documentation of all monitoring activities performed.