Finding Text
Criteria Pursuant to the award agreement, the Academy is required to submit quarterly financial and performance progress reports to the Sub-grantor on January 15, April 15, July 15, and October 15 of each year. In addition, in accordance with the award agreement and the record retention requirements of 2 CFR §200.334, subrecipients must retain all supporting documentation for a minimum of three years from the later of: (1) project completion, (2) submission of the final expenditure report, or (3) the resolution of any litigation, claim, dispute, audit, or other action involving the records. Condition We noted that, of the four quarterly reports required for FEMA Public Assistance Category Z funds, three were not submitted to the Sub-grantor by the prescribed deadlines. Similarly, three of the four quarterly reports required for FEMA Public Assistance Category E funds were not submitted on a timely basis. In addition, we were unable to verify the completeness and accuracy of the reports using documentation maintained by the Academy because management did not retain copies of all quarterly reports submitted by the Grant Manager and its support. However, this information was instead confirmed through the pass-through entity's reporting platform. Context Management relied on an external service provider to prepare and submit the required reports. In certain instances, the Academy did not maintain copies of the reports or evidence of their submission. Effect Failure to submit required reports on a timely basis and maintain supporting documentation constitutes noncompliance with the reporting and record-retention requirements established by the award agreement and applicable federal regulations. Such noncompliance may hinder monitoring activities and could increase the risk of questioned costs or other grant administration issues. Cause The Academy outsourced the administration of its federal programs and relied on the external service provider to perform grant-related activities in accordance with applicable Academy policies and federal requirements. However, the Academy did not designate an individual responsible for overseeing and monitoring the service provider's performance, including the timely submission and retention of required reports. Questioned costs None. Recommendation Management should establish and implement procedures to ensure that required financial and performance reports are prepared, reviewed, and submitted on a timely basis. Additionally, the Academy should maintain copies of all submitted reports and support evidence of submission to demonstrate compliance with federal reporting and record-retention requirements. Management must establish monitoring procedures over outsourced activities and third-party service providers involved in the administration of Federal programs. Views of Responsible Officials and Planned Corrective Actions Management response is reported in the “Corrective Action Plan” at the end of this report.