Finding 33629 (2022-001)

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Requirement
M
Questioned Costs
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Year
2022
Accepted
2023-08-30
Audit: 35586
Organization: American Bureau of Shipping (TX)

AI Summary

  • Core Issue: The Company did not obtain and review annual Uniform Guidance reports or audited financial statements for subrecipients, which is required for effective monitoring.
  • Impacted Requirements: This oversight violates 2 CFR 200.332(d) and 2 CFR 200.501, risking ineligible subrecipients receiving federal funds and unaddressed findings.
  • Recommended Follow-Up: Implement a policy for annual reviews of Uniform Guidance reports or financial statements, document findings, and adjust risk assessments and monitoring as necessary.

Finding Text

2022-001 ? Subrecipient Monitoring Cluster: Research and Development Agency: Department of Commerce and Department of Health and Human Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing and Development and Testing a Field-based Hazard/Near-Miss Sharing System for Commercial Fishing Vessels Award Numbers: 70NANB21H038 and U01OH012288 Assistance Listing Title: Measurement and Engineering Research and Standards and Occupational Safety and Health Program Assistance Listing Number: 11.609 and 93.262 Award Year: FY 2022 Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition Through our testing of 4 subrecipients out of a population of 10, we were able to obtain a documented initial risk assessment for each subrecipient selected and other evidence of monitoring such as meetings with the subrecipients. However, we were unable to obtain evidence that the Company obtained and reviewed the annual Uniform Guidance report or annual audited financial statements (if the entity was not subject to a Uniform Guidance audit) for each subrecipient selected for testing. Cause The Company performed an initial risk assessment but did not understand that obtaining the Uniform Guidance reports or financial statements needed to be completed annually as part of their subrecipient monitoring procedures. Effect The lack of an annual review of subrecipient audits may result in ineligible subrecipients receiving federal awards, subrecipient findings not being fully remediated and other monitoring procedures (based on risk level) not being performed. Questioned Costs None noted. Recommendation We recommend the Company implement a policy to review Uniform Guidance reports (or audited financial statements to the extent Uniform Guidance reports are not available) on an annual basis. When reviewing the reports, they should understand the type of opinion(s) expressed and whether there were any findings associated with their awards, document their review and assess whether there is any change in the risk assessment and subsequent monitoring needed of each subrecipient. Management? Views and Corrective Action Plan Management?s Views and Corrective Action Plan are included at the end of this report.

Corrective Action Plan

Finding 2022-001 ? Subrecipient Monitoring Cluster: Research and Development Agency: Department of Commerce and Department of Health and Human Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing and Development and Testing a Field-based Hazard/Near-Miss Sharing System for Commercial Fishing Vessels Award Numbers: 70NANB21H038 and U01OH012288 Assistance Listing Title: Measurement and Engineering Research and Standards and Occupational Safety and Health Program Assistance Listing Number: 11.609 and 93.262 Award Year: FY 2022 To ensure American Bureau of Shipping (ABS) is in compliance with 2 CFR 200.332(d) and 2 CFR 200.332(f), ABS will obtain and review annual Uniform Guidance reports or annual audited financial statements (if the entity was not subject to a Uniform Guidance audit) of all subrecipients. ABS has revised its Contracted Research and Development Process Instruction for subrecipient monitoring. The process instruction is supplemented by a subrecipient monitoring form and check sheet. The annual subrecipient monitoring form and check sheet outline the necessary steps to document and interpret the review of Uniform Guidance reports or financial reports. The annual review will be completed within two months of the grant date anniversary. The contracts administrator and project manager will provide two-step verification by reviewing, dating, and signing both the subrecipient monitoring form and check sheet to document their understanding of the type of opinion(s) expressed, findings associated with their awards, document their review, and assess whether there is any change in the initial risk assessment and subsequent monitoring need of each subrecipient. The annual reviews commenced in July 2023.

Categories

Subrecipient Monitoring

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
11.609 Measurement and Engineering Research and Standards $469,380
81.135 Advanced Research Projects Agency - Energy $73,237
47.041 Engineering $56,088
81.121 Nuclear Energy Research, Development and Demonstration $34,535
20.817 Air Emissons and Energy Initiative $11,102
81.087 Renewable Energy Research and Development $6,952
93.262 Occupational Safety and Health Program $5,984
15.441 Safety and Environmental Enforcement Research and Data Collection for Offshore Energy and Mineral Activities $3,060