FAC Explorer

Finding 480985 (2023-004)

Significant Deficiency
Requirement
M
Questioned Costs
-
Year
2023
Accepted
2024-08-12
Audit: 317091
Organization: Heartland Alliance for Human Needs & Human Rights (IL)
Auditor: Grant Thornton LLP

AI Summary

  • Core Issue: The Organization failed to properly evaluate and monitor subrecipients, lacking necessary documentation for risk assessments and timely verification of audit requirements.
  • Impacted Requirements: Compliance with federal regulations §200.331(b) and §200.331(d) regarding subrecipient monitoring was not met, risking unallowable expenses charged to grants.
  • Recommended Follow-Up: Enforce existing policies and procedures to ensure thorough monitoring of subrecipients, from identification to audit verification.

Finding Text

FINDING 2023-004 Internal Control over Compliance and Compliance with Subrecipient Monitoring Program: Federal Agency: USAID Funding Year(s): 8/1/2018 – 1/31/2023 Federal Award: 72026718CA00002 AL Number: 98.001 Criteria: In accordance with §200.331(b) and §200.331(d), Requirements for Pass-Through Entities, the Organization, the recipient of these federal funds) must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. The Organization must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statues, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 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 other means; and (3) issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity. Condition: During our testing of subrecipient monitoring, we selected two subrecipient samples. We identified the following conditions: • For one of the two samples testing, the Organization was unable to provide documented evidence for the evaluation of the subrecipient’s risk assessment. • For one sample tested, there was no timely evidence that the Organization verified the subrecipient’s audit requirements. Therefore, monitoring activities related to the verification of the audit requirements were not performed in accordance with §200.331(b) and §200.331(d). Cause: The Organization did not follow its policies and procedures in place to ensure compliance with the requirements regarding subrecipient monitoring. Effect: Failure to comply with the subrecipient monitoring requirements of the Uniform Guidance could result in unallowable expenses being charged to the grants by the subrecipients. Context: This is a condition identified based upon our review of the Organization’s compliance with specified requirements. Questioned Costs: None identified. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization strictly enforce its existing policies and procedures to ensure the subrecipient process from identification of that subrecipient through verification of subrecipients’ audit requirements, occurs to ensure compliance.

Corrective Action Plan

Finding Number: 2023-004 Subrecipient Monitoring - Compliance and Internal Control Summary of Finding: In accordance with §200.331(b) and §200.331(d), Requirements for Pass-Through Entities, the Organization, the recipient of these federal funds) must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. During our testing of subrecipient monitoring, we selected two subrecipient samples. We identified the following conditions: • For one of the two samples testing, the Organization was unable to provide documented evidence for the evaluation of the subrecipient’s risk assessment. • For one sample tested, there was no timely evidence that the Organization verified the subrecipient’s audit requirements. Therefore, monitoring activities related to the verification of the audit requirements were not performed in accordance with §200.331(b) and §200.331(d). Response to Finding: Heartland Alliance International acknowledges the findings related to subrecipient monitoring and the non-compliance with §200.331(b) and §200.331(d). We understand the importance of evaluating each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward to ensure appropriate monitoring. The identified issues were due to lapses in our documentation and verification processes. We are committed to addressing these deficiencies promptly to enhance our compliance and internal control mechanisms. Corrective Action: 2. Improved Documentation Procedures: o Action: Implement a standardized process for documenting the evaluation of each subrecipient’s risk assessment. This will include a checklist and risk assessment template that must be completed and stored in the subrecipient’s file. o Responsible Individual: Carolina Ramazzina Van Moorsel, Sr. Director Global Grant Compliance o Completion Date: 9/30/2024 3. Verification of Audit Requirements: o Action: Establish a formal procedure to ensure timely verification of subrecipients’ audit requirements. This will include setting up reminders and deadlines within our compliance management system to verify audit submissions and review findings promptly. o Responsible Individual: Carolina Ramazzina Van Moorsel, Sr. Director Global Grant Compliance o Completion Date: 9/30/2024 4. Training and Awareness: o Action: Conduct training sessions for all staff involved in subrecipient monitoring to ensure they are aware of the federal requirements and the importance of timely and accurate documentation. Regular refresher courses will be scheduled to maintain high compliance standards. o Responsible Individual: Responsible Individual: Carolina Ramazzina Van Moorsel, Sr. Director Global Grant Compliance o Completion Date: 9/30/2024 o Internal Audit and Review: o Action: Initiate periodic internal audits to review subrecipient monitoring activities. This will help in identifying any gaps early and ensuring ongoing compliance with §200.331(b) and §200.331(d). o Responsible Individual: Carolina Ramazzina Van Moorsel, Sr. Director Global Grant Compliance o Completion Date: 9/30/2024 5. Enhanced Monitoring System: o Action: Upgrade our subrecipient monitoring system to integrate automated tracking and alerts for compliance-related tasks. This system will ensure that no required actions are overlooked, and that all documentation is securely stored and easily accessible. o Responsible Individual: Carolina Ramazzina Van Moorsel, Sr. Director Global Grant Compliance o Completion Date: 9/30/2024 By implementing these corrective actions, we aim to ensure full compliance with federal requirements and strengthen our internal controls to prevent recurrence of such findings in the future. Individual(s) Responsible for Corrective Action Plan: o Responsible Individual: Rebecca Obrock, Chief Operating Officer o Completion Date: 9/30/2024 o Phone Number: (773) 275-2586 o Anticipated Completion Date: 9/30/2024

Categories

Subrecipient Monitoring

Other Findings in this Audit

  • 480973 2023-005
    Significant Deficiency Repeat
  • 480974 2023-005
    Significant Deficiency Repeat
  • 480975 2023-005
    Significant Deficiency Repeat
  • 480976 2023-005
    Significant Deficiency Repeat
  • 480977 2023-005
    Significant Deficiency Repeat
  • 480978 2023-001
    Significant Deficiency
  • 480979 2023-001
    Significant Deficiency
  • 480980 2023-002
    Significant Deficiency Repeat
  • 480981 2023-002
    Significant Deficiency Repeat
  • 480982 2023-005
    Significant Deficiency Repeat
  • 480983 2023-005
    Significant Deficiency Repeat
  • 480984 2023-003
    Significant Deficiency
  • 480986 2023-005
    Significant Deficiency Repeat
  • 480987 2023-005
    Significant Deficiency Repeat
  • 480988 2023-005
    Significant Deficiency Repeat
  • 480989 2023-005
    Significant Deficiency Repeat
  • 1057415 2023-005
    Significant Deficiency Repeat
  • 1057416 2023-005
    Significant Deficiency Repeat
  • 1057417 2023-005
    Significant Deficiency Repeat
  • 1057418 2023-005
    Significant Deficiency Repeat
  • 1057419 2023-005
    Significant Deficiency Repeat
  • 1057420 2023-001
    Significant Deficiency
  • 1057421 2023-001
    Significant Deficiency
  • 1057422 2023-002
    Significant Deficiency Repeat
  • 1057423 2023-002
    Significant Deficiency Repeat
  • 1057424 2023-005
    Significant Deficiency Repeat
  • 1057425 2023-005
    Significant Deficiency Repeat
  • 1057426 2023-003
    Significant Deficiency
  • 1057427 2023-004
    Significant Deficiency
  • 1057428 2023-005
    Significant Deficiency Repeat
  • 1057429 2023-005
    Significant Deficiency Repeat
  • 1057430 2023-005
    Significant Deficiency Repeat
  • 1057431 2023-005
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.676 Unaccompanied Alien Children Program $5.75M
14.181 Supportive Housing for Persons with Disabilities $3.13M
98.001 Usaid Foreign Assistance for Programs Overseas $2.34M
19.518 Overseas Refugee Assistance Programs for Western Hemisphere $1.71M
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $1.51M
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $797,852
14.896 Family Self-Sufficiency Program $710,086
93.011 National Organizations of State and Local Officials $596,606
84.002 Adult Education - Basic Grants to States $566,592
64.033 Va Supportive Services for Veteran Families Program $501,728
93.604 Assistance for Torture Victims $488,408
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $435,281
16.575 Crime Victim Assistance $352,619
93.567 Refugee and Entrant Assistance_voluntary Agency Programs $339,527
14.241 Housing Opportunities for Persons with Aids $280,255
10.553 School Breakfast Program $250,906
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $242,161
14.239 Home Investment Partnerships Program $220,000
14.326 Project Rental Assistance Demonstration (pra Demo) Program of Section 811 Supportive Housing for Persons with Disabilities $167,654
19.345 International Programs to Support Democracy, Human Rights and Labor $163,033
14.871 Section 8 Housing Choice Vouchers $142,030
14.195 Section 8 Housing Assistance Payments Program $136,266
19.019 International Programs to Combat Human Trafficking $134,259
97.027 Emergency Management Institute (emi)_independent Study Program $120,929
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $113,598
93.917 Hiv Care Formula Grants $106,924
93.914 Hiv Emergency Relief Project Grants $90,211
93.924 Ryan White Hiv/aids Dental Reimbursement and Community Based Dental Partnership Grants $89,761
14.267 Continuum of Care Program $85,050
93.576 Refugee and Entrant Assistance_discretionary Grants $81,047
93.566 Refugee and Entrant Assistance_state Administered Programs $80,859
19.221 Iran Assistance Program $76,629
14.850 Public and Indian Housing $65,233
21.027 Coronavirus State and Local Fiscal Recovery Funds $61,628
19.016 Iraq Assistance Program $57,202
14.238 Shelter Plus Care $47,473
16.320 Services for Trafficking Victims $45,291
93.247 Advanced Nursing Education Grant Program $34,611
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $30,542
14.218 Community Development Block Grants/entitlement Grants $24,113
93.598 Services to Victims of A Severe Form of Trafficking $21,007
93.958 Block Grants for Community Mental Health Services $20,320
16.816 John R. Justice Prosecutors and Defenders Incentive Act $19,813
14.235 Supportive Housing Program $15,441
93.236 Grants to States to Support Oral Health Workforce Activities $13,514
19.510 U.s. Refugee Admissions Program $12,349
84.126 Rehabilitation Services_vocational Rehabilitation Grants to States $8,198