Finding 499094 (2023-001)

King County January 1, 2023 through December 31, 2023 2023-001 Internal controls within the Department of Public Health were inadequate for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 93.495 – COVID-19 Community Health Workers for Public Health Response and Resilient Federal Agency Name: U.S. Department of Health and Human Services Federal Award/Contract Number: NU58DP007045 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: Yes, Finding 2022-001 Description of Condition The purpose of the Community Health Worker for Public Health Response and Resilient program is to increase community health worker activities across the nation. Specifically, the program focuses on increasing efforts related to public health response in communities hit hardest by an outbreak and among priority populations that are at high risk for exposure, infection and poorer health outcomes. In 2023, the Department spent $2,637,166 in program funds. Of this amount, the Department paid $1,427,327 to four subrecipients. The Department entered into one subaward with a subrecipient in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The Federal Funding Accountability and Transparency Act (FFATA) requires direct recipients that make first-tier subawards of $30,000 or more to report them in the FFATA Subaward Reporting System (FSRS). The Department must report subawards by the end of the month following the month in which it made the subaward or subaward amendment. We found the Department’s internal controls were ineffective for ensuring compliance with FFATA reporting requirements. Specifically, the Department of Public Health made one new subaward in 2023 that exceeded $30,000, and did not prepare or submit any FFATA reports for this subaward as federal regulations require. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The Department of Public Health implemented processes and procedures regarding filing of FFATA reports in FSRS after receiving the prior audit finding. However, the Department did not dedicate enough resources to file the FFATA report in FSRS as required. Effect of Condition Failing to submit the required reports diminishes the federal government’s ability to ensure accountability and transparency of federal spending. The table below summarizes the discrepancies we identified. Recommendation We recommend the Department of Public Health strengthen its internal controls to ensure it prepares and submits FFATA reports for all applicable subawards, as federal law requires. County’s Response The County agrees with the finding that DPH did not submit a FFATA report through the FSRS portal for one subaward, and with the recommendation to strengthen internal controls. The Department implemented an escalation plan incorporating increased communication strategies for non-compliance with DPH leadership to ensure adherence to FFATA reporting requirements. The Department will build upon the corrective action plan established to address the 2022-001 Finding by also reinforcing training and job aids for consistent application of reporting responsibilities and deadlines; the Department’s Financial Compliance and Grant Management Team will also conduct enhanced quarterly monitoring reviews. In addition, DPH will institute quarterly notifications for non-compliance with FFATA requirements to a list of established Department contacts. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, establishes the Federal Funding Accountability and Transparency Act (FFATA) requirements of reporting the subaward information through the FFATA Subaward Reporting System (FSRS).