Finding Text
Finding 2025-003: Matching Requirement Not Monitored - Material Weakness Federal Program: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Agency: U.S. Department of Health and Human Services Federal Award Identification Numbers: 5H79TI084739-02, 5H79TI084739-03 Award Year: 2024 and 2025 Criteria: The grant agreement requires the recipient to provide and document a specified nonfederal matching contribution as a condition of the award. In addition, 2 CFR § 200.306 establishes requirements applicable to cost sharing or matching contributions, including that such contributions be verifiable from the non-Federal entity's records. Accordingly, the grantee is required to maintain sufficient records to demonstrate compliance with the matching requirements of the federal award. Condition: The grantee did not maintain a process to identify, track, or document qualifying matching contributions during the grant period. As a result, management was unable to provide sufficient documentation to demonstrate whether the required matching contribution had been met, and we were unable to perform procedures to determine compliance with the matching requirement. Cause: Management has not established procedures or internal controls to identify, monitor, calculate, and document qualifying matching contributions throughout the grant period. Effect: Without adequate tracking and supporting documentation, the grantee is unable to demonstrate compliance with the matching requirement. As a result, there is an increased risk that required matching contributions may not be met or may not be adequately supported, which could result in noncompliance with the terms and conditions of the federal award and potential disallowance or repayment of federal funds. Questioned Costs: None noted. Context: The required matching contribution for the 2024 grant year was $58,400 and was not considered material for purposes of the audit. The required matching contribution for the 2025 grant year was $175,000 and was considered material. Because the grantee did not maintain records identifying and tracking qualifying matching contributions, a population of matching contributions was not available from which to select a sample. Accordingly, no sample was selected, and statistical sampling was not applicable. As a result, we were unable to perform testing to determine whether the required matching contribution for the 2025 grant year was met. Recommendation: We recommend that management implement procedures to identify, track and document qualifying matching contributions throughout the grant period. These procedures should include periodic monitoring of accumulated matching contributions, retention of sufficient supporting documentation and supervisory review to ensure compliance with the matching requirements of the grant agreement. Views of Responsible Officials: Management acknowledges this finding and will address remediation in management's corrective action plan.