Finding Text
Finding 2022-004 ? Schedule of Expenditures of Federal Awards Major Program: COVID-19: American Rescue Plan Act of 2021 - Coronavirus State and Local Fiscal Recovery Funds AL Number: 21.027 Federal Agency: Department of the Treasury Pass-Through: County of Cook, Illinois Grantor Number: 831926584 Award Period: July 29, 2021 through November 30, 2024 Type of Finding: Significant deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Foundation must provide the Schedule of Expenditures of Federal Awards (SEFA). The schedule must be complete and accurate to provide for the basis of testing by the auditors as well as for accurate financial reporting to primary and secondary funders as well as subrecipients. Condition: During the audit, the Foundation identified $180,000 in payments originally classified as payments to subrecipients that should have been classified as general disbursements and procurement transactions after consulting with its funder. A change to the SEFA was required to adjust the amounts passed through to subrecipients. Questioned Costs: None. Context: The initial SEFA was provided showing an additional $180,000 in awards passed through to subrecipients when those payments were for procurement transactions. Cause: Lack of sufficient controls to appropriately distinguish between subcontractor payments and subrecipient payments. Effect: Amounts inaccurately reflected on the SEFA as subrecipient payments. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Foundation establish controls to evaluate contracts to distinguish between those that are a subcontractor relationship vs. subrecipient. Views of Responsible Officials and Planned Corrective Actions: The Foundation reclassified the partners mentioned in this finding as subcontractors after the auditors suggested that the subcontractor category might be a better fit for the work the partners covered by this finding are doing. The Foundation and the County agreed that the Uniform Guidance is vague enough that these partners could legitimately be classified as either subrecipients or subcontractors, but they ultimately decided that classifying them as subcontractors made more sense. Going forward, the Foundation will ask the County and the auditors for their recommendation before classifying any ambiguous subrecipients or subcontractors.