FAC Explorer

Finding 396235 (2022-002)

Significant Deficiency
Requirement
M
Questioned Costs
-
Year
2022
Accepted
2024-05-09
Audit: 305880
Organization: Houston Regional Hiv/aids Resource Group, Inc. (TX)
Auditor: Carr Riggs & Ingram LLC

AI Summary

  • Core Issue: The Resource Group failed to conduct required financial monitoring of subrecipients, impacting compliance with federal grant requirements.
  • Impacted Requirements: Non-compliance with 2 CFR Section 200.332 and 2 CFR Section 200.303a due to inadequate internal controls and monitoring processes.
  • Recommended Follow-Up: Ensure fiscal monitoring is performed as per policies and regulations, especially after leadership changes.

Finding Text

U.S. Department of Housing and Urban Development 14.241 – Housing Opportunities for Persons with AIDS Passed through Texas Department of State Health Services Award Periods: September 1, 2021 to March 31, 2022 and April 1, 2022 to August 31, 2023 Contract No. 537-17-0195-00001 and HHS001022300003 Texas Department of State Health Services State HIV Service Grants Award Periods: September 1, 2021 to March 31, 2022 and April 1, 2022 to August 31, 2023 Contract No. 537-18-0097-00001 and HHS001022300002 Criteria: Pass-through entities are required to monitor subrecipients in accordance with 2 CFR Section 200.332. Further, under 2 CFR Section 200.303a, non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statutes, regulations, and the terms and conditions of the award. Condition: For the fiscal year ended December 31, 2022, The Resource Group did not perform financial monitoring of its subrecipients. Cause: Initially subrecipient monitoring was suspended due to COVID-19 in 2020 and reinstated late 2021. The Resource Group restarted their monitoring of subrecipients, however the monitoring was done by two individuals, one for programming and the other for financial monitoring. Monitoring of programming was completed timely, while the financial monitoring was not. Further, the Finance Director, who was responsible for the financial monitoring, resigned in 2023 and the successor Finance Director was hired in August 2023. Effect: As a result of not completing all financial monitoring and the turnover in Finance Director, The Resource Group is not in compliance with grant requirements. Questioned Costs: None Noted Recommendation: The Resource Group should follow its policies to perform fiscal monitoring on its subrecipients in accordance with 2 CFR Section 200.332. Views of Responsible Officials: See corrective action plan.

Corrective Action Plan

2022-002 Compliance and Internal Controls over Subrecipient Fiscal Monitoring (Significant Deficiency) U.S. Department of Housing and Urban Development 14.241- Housing Opportunities for Persons with AIDS Contract No. 537-17-0195-00001 and HHS001022300003 Texas Department of State Health Services State HIV Service Grants Contracts No. 537-18-0097-00001 and HHS001022300002 Recommendation: The Resource Group should follow its policies to perform fiscal monitoring of its subrecipients in accordance with 2 CFR Section 200.332. Corrective Action: In accordance with 2 CFR Section 200.332, The Resource Group as the pass-through entity will ensure subrecipient fiscal monitoring is completed in 2024 to ensure compliance with federal and state requirements. The Finance Director is responsible for oversight and administration of fiscal monitoring. Fiscal monitoring will be conducted at least annually in accordance with HRSA Monitoring Standards 45 CFR 74.51 and 45 CFR 75.352. As a pass-through entity, the fiscal monitoring will include at minimum reviews of financial performance and compliance with federal and state statues, regulations and terms and conditions. The process will include desktop/remote verification of applicable financial policy and procedures and an onsite review. A standardized monitoring tool will be used to evaluate financial compliance. The fiscal monitoring observations will result in a monitoring report, disseminated to the subrecipient within 60 days of the onsite review. Progress to date: 1. The Finance Director was hired in August 2023. To support the financial monitoring efforts, technical assistance was received on February 5-7, 2024, from the DSHS Fiscal Support and Oversight department. The primary objective of the visit was to discuss financial monitoring requirements as it allies to state and federal regulations, statues and terms and conditions. The standardized monitoring tool was also evaluated for compliance. 2. The Finance Director has developed a fiscal monitoring schedule for 2024. Onsite reviews started in February 2024. The testing period for subrecipient monitoring has been expanded to include a testing period from Fiscal Year 2022 and Fiscal Year 2023. Responsible Party: Finance Director, Garland Thompson Date to be Corrected: February-August 2024

Categories

Subrecipient Monitoring

Other Findings in this Audit

  • 396236 2022-003
    Significant Deficiency
  • 396237 2022-003
    Significant Deficiency
  • 972677 2022-002
    Significant Deficiency
  • 972678 2022-003
    Significant Deficiency
  • 972679 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.917 Hiv Care Formula Grants $7.51M
14.241 Housing Opportunities for Persons with Aids $1.49M
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $839,525
93.153 Coordinated Services and Access to Research for Women, Infants, Children, and Youth $728,815
93.917 Covid-19 Hiv Care Formula Grants $75,418
93.918 Covid-19 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $2,046
93.153 Covid-19 Coordinated Services and Access to Research for Women, Infants, Children, and Youth $87