Finding 1239337 (2025-001)

Identification of the federal program: Federal Grantor: United States Department of Health and Human Services Assistance Listing Number: 93.243, Substance Abuse and Mental Health Services Projects of Regional and National Significance Federal Grant Award No.: H79TI084037 Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that the non-Federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Under the requirements of the Federal Funding Accountability and Transparency Act (Transparency Act) that are codified in 2 CFR Part 170 related to reporting of subawards, “Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward.”. The recipient must report each subaward described to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the subaward was issued. Condition: During our audit, we noted that four reportable subaward modifications related to Assistance Listing Number 93.243, Substance Abuse and Mental Health Services Projects of Regional and National Significance (the SAMHSA program), made during fiscal year 2025 were not reported to the FSRS by the end of the month following the month in which they were issued, as required by 2 CFR Part 170. The following is a summary of the selections tested during our fiscal year 2025 audit procedures for FSRS reporting of subawards for the SAMHSA program: Cause: Northwell did not have sufficient internal controls to ensure that the required Transparency Act reports were submitted timely. Effect or potential effect: Northwell Health, Inc. and its member corporations and other controlled affiliated entities (collectively, Northwell) did not submit the necessary Transparency Act reports under the SAMHSA program to FSRS on a timely basis for each of the subaward modifications selected in our audit tests, and consequently Northwell was not in compliance with the requirements under the Transparency Act. Questioned costs: None. Context: The SAMHSA program included five reportable subawards totaling $457,399 during the fiscal year 2025. Four of the five reportable subawards were not reported to FSRS within the required reporting timeframe. The untimely reports related to subawards totaling $299,165. The reports were subsequently submitted, and no inaccuracies or missing data elements were identified in the information reported. Total federal expenditures under the program for fiscal year 2025 were $3,093,193. Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year. Recommendation: We recommend that Northwell strengthens its internal controls and procedures over Transparency Act reporting related to the SAMHSA program in order to ensure the required reports are submitted on a timely basis in compliance with the Federal reporting requirements. Views of responsible officials: Management concurs with the finding. During fiscal year 2025, certain subaward modifications under the SAMHSA program were not reported to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) within the required timeframe. Upon identification, the reports were submitted and confirmed to be accurate and complete. To prevent recurrence, responsible staff will receive annual in-service training on FFATA reporting requirements and the importance of timely compliance with the Transparency Act. In addition, management is reviewing and updating its standard operating procedures for FFATA reporting to strengthen internal controls and ensure all reportable subaward actions are identified and submitted within the required reporting period.