Finding Text
2022-006 Federal Agency: U.S. Department of Agriculture Federal Program Names: Farmers Market and Local Food Promotion Program; Beginning Farmer and Rancher Development Program Assistance Listing Number: 10.175; 10.311 Federal Award Identification Number and Year: 2020: AM200100XXXXG176; 2021: 2021-70033-35709 Award Period: September 30, 2020 to September 29, 2023; September 1, 2021 to August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Appendix A to 2 CFR Part 170, Section I.a.2(i) requires recipients of federal awards to report information on each first-tier subaward to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) by the end of the month following the month in which the subaward was obligated. Condition: The Organization had one reportable first-tier subaward under ALN 10.175 (Local Food Promotion Program) and two reportable first-tier subawards under ALN 10.311 (Beginning Farmer and Rancher Development COVID Relief Grant) during FY2022. Required FFATA reports were not submitted to the FFATA Subaward Reporting System (FSRS) for any of the three reportable subawards. Questioned Costs: None. Context: During testing of the Reporting compliance requirement, one of one applicable subawards tested under ALN 10.175 and two of two applicable subawards tested under ALN 10.311 were not reported in the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Management indicated it was unaware of the FFATA reporting requirement; therefore, FFATA reports were not submitted for any applicable subawards. One reportable subaward was issued under ALN 10.175 and two reportable subawards were issued under ALN 10.311, resulting in three required FFATA reports that were not submitted. ALN Transactions Tested Subaward not reported Dollar amount of unreported subaward 10.175 1 1 $ 40,578 10.311 2 2 $ 180,000 Cause: Management was unaware of FFATA reporting requirements applicable to first-tier subawards under its federal awards. The Organization did not have controls designed to identify, evaluate, and monitor compliance with all applicable federal award terms, conditions, and regulations. As a result, required FFATA reports were not submitted. Effect: The Organization was not in compliance with the FFATA reporting requirements applicable to its federal awards. As a result, required first-tier subaward information was not reported to the FFATA Subaward Reporting System (FSRS), reducing transparency over federal award activities and resulting in material noncompliance with federal reporting requirements. Repeat finding: No. Recommendation: We recommend that management implement procedures to identify FFATA-reportable subawards and ensure all required reports are submitted timely. We further recommend that management review subawards issued subsequent to FY2022 to determine whether any required FFATA reports were omitted and consult with the applicable federal awarding agencies or pass-through entities regarding potential corrective actions, including whether late reporting may be accepted. View of responsible officials: Management agrees with the finding and has provided its corrective action plan.