Finding Text
Finding 2025-001 Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Social Services Block Grant Assistance Listing Number: 93.667 Federal Award Identification Number and Year: 2401NVSOSR 2025 Pass-Through Agency: State of Nevada, Department of Health and Human Services Pass-Through Number(s): 2401NVSOSR Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: In accordance with the Compliance Supplement, Part 6 - Internal Control, CFR § 200.303(a) requires that non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance the entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR § 200.332(g) requires pass-through entities to verify that subrecipients expected to be audited under 2 CFR Part 200, Subpart F have met the applicable audit requirements and follow-up on any findings and corrective action as part of its subrecipient monitoring requirements. Condition: Management did not retain documentation demonstrating their monitoring procedures over annual audits under 2 CFR Part 200, Subpart F had been met. During our testing of internal controls over subrecipient monitoring compliance requirements, we noted that the Organization had not designed and implemented documented controls to verify that subrecipients subject to audit requirements under 2 CFR Part 200, Subpart F had met the requirements for annual audits. Questioned costs: None. Context: Subrecipient monitoring over federal annual audit requirements was not reviewed and documented for all three subrecipients during the current reporting period. Cause: The Organization did not have documented internal controls designed to ensure verification of annual audit requirements as part of its subrecipient monitoring procedures. Effect: Without a documented control to verify subrecipient audit requirements, management may not timely identify subrecipients subject to Single Audit requirements or instances in which required audits have not been completed. As a result, subrecipient noncompliance could occur and not be detected in a timely manner. Repeat Finding: No. Recommendation: Management should establish internal control procedures to ensure formal documentation of the annual verification of whether subrecipients are subject to audit requirements and, if applicable, that required audits have been completed. Documentation should be retained to support the procedures performed, including information obtained from subrecipients, management's assessment of audit requirements, and any follow-up actions taken. Views of responsible officials: There is no disagreement with the audit finding.