Finding 500943 (2023-007)

Material Weakness Repeat Finding
Requirement
M
Questioned Costs
-
Year
2023
Accepted
2024-09-30
Audit: 323235
Organization: Wabanaki Health and Wellness (ME)
Auditor: Wipfli LLP

AI Summary

  • Core Issue: The Organization failed to meet any subrecipient monitoring and management requirements as outlined in 2 CFR Part 200.332, leading to a material weakness in internal controls.
  • Impacted Requirements: Compliance with subrecipient monitoring, including proper identification of subawards, risk evaluation, and ongoing monitoring activities.
  • Recommended Follow-Up: Implement training for management on subrecipient requirements and establish a monitoring framework to ensure compliance moving forward.

Finding Text

Finding Number: 2023-007 Repeat Finding: Yes Type of Finding: Material Weakness in Internal Control and Material Noncompliance Description: Subrecipient Monitoring and Management Major Program: AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement – Direct Award (DHHS) – Award numbers: 1 NU38TO000023-01-00, 6 NU38TO000023- 01-01, 6 NU38OT000257-05-03 and 6 NU38OT000257C3 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Subrecipient Monitoring Condition: The Organization did not comply with any of the subrecipient monitoring and management requirements in accordance with 2 CFR Part 200.332. Criteria: The subrecipient monitoring and management requirements that are codified in 2 CFR Part 200.332 requires the pass-through entity must: a. Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes: 1. Federal award identification; 2. All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; 3. Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. 4. (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: 1. The negotiated indirect cost rate between the pass-through entity and the subrecipient; 2. The de minimis indirect cost rate (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. (iii) 5. A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and 6. Appropriate terms and conditions concerning closeout of the subaward. b. 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. c. Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. d. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, 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 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 § 200.521. 4. The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. e. Depending upon the pass-through entity's assessment of risk posed by the subrecipient, the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: 1. Providing subrecipients with training and technical assistance on program-related matters; and 2. Performing on-site reviews of the subrecipient's program operations; 3. Arranging for agreed-upon-procedures engagements as described in § 200.425. f. Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. g. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. h. Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations. Cause: The Organization’s management was not aware of the subrecipient monitoring and management requirements. Effect: The Organization was not in compliance with any of the subrecipient monitoring and management requirements, resulting in a material noncompliance and a material weakness in internal controls over compliance. Recommendation: We recommend the Organization implement systems and procedures to ensure compliance with the subrecipient monitoring and management compliance requirements. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.

Corrective Action Plan

2023- 007 - Material Weakness in Internal Control and Material Noncompliance – Sub-recipient Monitoring and Management WPHW understands this finding and recognizes that correction that were planned for FY23 were not able to be fully implemented. One of the significant challenges WPHW had over the past couple of year, in addition to IT system challenges, is staffing. WPHW has hired three individuals to develop our contracting process and had performance issues with all three individuals. In addition to the difficulties with the NetSuite implementation, we have had to re-evaluate our sub-recipient monitoring and management business process. The following process will address this finding: 1) Director of Accounting and the Accounting Manager will review CFR 200.332 and develop a revised business process for the WPHW contract system a. Accounting Team will hire 2 Accounting Specialists who will each have specific sub-recipient monitoring responsibilities 2) Director of Accounting and the Accounting Manager will review all current contract to ensure the following: a. Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes: i. Federal, State or other award identification. ii. Subrecipient name (which must match the name associated with its unique entity identifier); iii. Subrecipient's unique entity identifier; iv. Award Identification Number (FAIN/SAIN); v. Award Date of award to the recipient by the Federal agency; vi. Subaward Period of Performance Start and End Date; vii. Subaward Budget Period Start and End Date; viii. Amount of Federal Funds (if applicable) Obligated by this action by the pass-through entity to the subrecipient; ix. Total Amount of Federal Funds Obligated, if applicable, to the subrecipient by the pass-through entity including the current financial obligation; x. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; xi. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xii. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xiii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiv. Identification of whether the award is R&D; and xv. Indirect cost rate for the Federal, State, or other award (including if the de minimis rate is charged) per § 200.414. b. All requirements imposed by the pass-through entity on the subrecipient are in accordance with Federal, State, Local statutes, regulations and the terms and conditions of the award; c. Determines and ensure completion of required financial and performance reports; d. Has an approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government or utilizes the de minimus. e. States that subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part f. Details appropriate terms and conditions concerning closeout of the subaward. g. Subrecipient risk assessment that accesses: i. prior experience with the same or similar subawards; ii. previous audits iii. personnel or substantially changed systems iv. Prior monitoring results 1. Subaward conditions will be placed if issues arise 3) Implement sub-recipient monitoring process. a. Conduct invoice review monthly i. All invoices must include full back up and support for expenses ii. All invoices will be reviewed as they are received to ensure expenses are allowable iii. Any issues that arise will be addressed prior to invoice payment b. Conduct contract monitoring visit annually i. Hold a meeting with the sub-recipient to review the following: 1. Reviewing financial and performance reports 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies 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 subaward. 3. Training and technical assistance on program-related matters 4. Determine corrective action for any deficiencies or findings and determine risk 5. Discussion of enforcement action against noncompliant subrecipient This process will be reviewed, and implementation will begin during Q4 FY24. All current FY24 contracts will be reviewed, and monitoring visits scheduled. For FY25, all contracts will be in compliance with requirements.

Categories

Subrecipient Monitoring

Other Findings in this Audit

  • 500932 2023-001
    Material Weakness Repeat
  • 500933 2023-002
    Material Weakness Repeat
  • 500934 2023-003
    Significant Deficiency Repeat
  • 500935 2023-008
    Significant Deficiency
  • 500936 2023-001
    Material Weakness Repeat
  • 500937 2023-002
    Material Weakness Repeat
  • 500938 2023-003
    Significant Deficiency Repeat
  • 500939 2023-008
    Significant Deficiency
  • 500940 2023-001
    Material Weakness Repeat
  • 500941 2023-002
    Material Weakness Repeat
  • 500942 2023-003
    Significant Deficiency Repeat
  • 500944 2023-008
    Significant Deficiency
  • 500945 2023-001
    Material Weakness Repeat
  • 500946 2023-002
    Material Weakness Repeat
  • 500947 2023-003
    Significant Deficiency Repeat
  • 500948 2023-008
    Significant Deficiency
  • 500949 2023-009
    Significant Deficiency
  • 500950 2023-001
    Material Weakness Repeat
  • 500951 2023-002
    Material Weakness Repeat
  • 500952 2023-003
    Significant Deficiency Repeat
  • 500953 2023-008
    Significant Deficiency
  • 500954 2023-009
    Significant Deficiency
  • 500955 2023-010
    Significant Deficiency
  • 500956 2023-006
    Significant Deficiency
  • 500957 2023-001
    Material Weakness Repeat
  • 500958 2023-002
    Material Weakness Repeat
  • 500959 2023-003
    Significant Deficiency Repeat
  • 500960 2023-008
    Significant Deficiency
  • 500961 2023-001
    Material Weakness Repeat
  • 500962 2023-002
    Material Weakness Repeat
  • 500963 2023-003
    Significant Deficiency Repeat
  • 500964 2023-008
    Significant Deficiency
  • 500965 2023-001
    Material Weakness Repeat
  • 500966 2023-002
    Material Weakness Repeat
  • 500967 2023-003
    Significant Deficiency Repeat
  • 500968 2023-007
    Material Weakness Repeat
  • 500969 2023-008
    Significant Deficiency
  • 500970 2023-001
    Material Weakness Repeat
  • 500971 2023-002
    Material Weakness Repeat
  • 500972 2023-003
    Significant Deficiency Repeat
  • 500973 2023-008
    Significant Deficiency
  • 500974 2023-009
    Significant Deficiency
  • 1077374 2023-001
    Material Weakness Repeat
  • 1077375 2023-002
    Material Weakness Repeat
  • 1077376 2023-003
    Significant Deficiency Repeat
  • 1077377 2023-008
    Significant Deficiency
  • 1077378 2023-001
    Material Weakness Repeat
  • 1077379 2023-002
    Material Weakness Repeat
  • 1077380 2023-003
    Significant Deficiency Repeat
  • 1077381 2023-008
    Significant Deficiency
  • 1077382 2023-001
    Material Weakness Repeat
  • 1077383 2023-002
    Material Weakness Repeat
  • 1077384 2023-003
    Significant Deficiency Repeat
  • 1077385 2023-007
    Material Weakness Repeat
  • 1077386 2023-008
    Significant Deficiency
  • 1077387 2023-001
    Material Weakness Repeat
  • 1077388 2023-002
    Material Weakness Repeat
  • 1077389 2023-003
    Significant Deficiency Repeat
  • 1077390 2023-008
    Significant Deficiency
  • 1077391 2023-009
    Significant Deficiency
  • 1077392 2023-001
    Material Weakness Repeat
  • 1077393 2023-002
    Material Weakness Repeat
  • 1077394 2023-003
    Significant Deficiency Repeat
  • 1077395 2023-008
    Significant Deficiency
  • 1077396 2023-009
    Significant Deficiency
  • 1077397 2023-010
    Significant Deficiency
  • 1077398 2023-006
    Significant Deficiency
  • 1077399 2023-001
    Material Weakness Repeat
  • 1077400 2023-002
    Material Weakness Repeat
  • 1077401 2023-003
    Significant Deficiency Repeat
  • 1077402 2023-008
    Significant Deficiency
  • 1077403 2023-001
    Material Weakness Repeat
  • 1077404 2023-002
    Material Weakness Repeat
  • 1077405 2023-003
    Significant Deficiency Repeat
  • 1077406 2023-008
    Significant Deficiency
  • 1077407 2023-001
    Material Weakness Repeat
  • 1077408 2023-002
    Material Weakness Repeat
  • 1077409 2023-003
    Significant Deficiency Repeat
  • 1077410 2023-007
    Material Weakness Repeat
  • 1077411 2023-008
    Significant Deficiency
  • 1077412 2023-001
    Material Weakness Repeat
  • 1077413 2023-002
    Material Weakness Repeat
  • 1077414 2023-003
    Significant Deficiency Repeat
  • 1077415 2023-008
    Significant Deficiency
  • 1077416 2023-009
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.859 Biomedical Research and Research Training $1.42M
93.772 Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement $644,028
93.933 Demonstration Projects for Indian Health $513,651
93.872 Tribal Maternal, Infant, and Early Childhood Home Visiting $394,448
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $264,082
93.493 Community Project Funding/congressionally Directed Spending ‐ Construction $243,060
93.738 Pphf: Racial and Ethnic Approaches to Community Health Program Financed Solely by Public Prevention and Health Funds $191,341
93.665 Emergency Grants to Address Mental and Substance Use Disorders During Covid-19 $177,747
93.762 A Comprehensive Approach to Good Health and Wellness in Indian County Ð Financed Solely by Prevention and Public Health $163,601
15.144 Indian Child Welfare Act_title II Grants $140,841
10.225 Community Food Projects $132,008
93.558 Temporary Assistance for Needy Families $100,070
21.027 Coronavirus State and Local Fiscal Recovery Funds $100,000
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $87,682
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $85,832
66.306 Environmental Justice Collaborative Problem-Solving Cooperative Agreement Program $83,810
93.587 Promote the Survival and Continuing Vitality of Native American Languages $62,409
93.959 Block Grants for Prevention and Treatment of Substance Abuse $55,929
93.268 Immunization Cooperative Agreements $54,486
93.788 Opioid Str $52,890
93.958 Block Grants for Community Mental Health Services $47,549
93.011 National Organizations of State and Local Officials $40,523
15.032 Indian Economic Development $25,043
10.766 Community Facilities Loans and Grants $23,007
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $11,697
10.568 Emergency Food Assistance Program (administrative Costs) $10,554
93.270 Adult Viral Hepatitis Prevention and Control $10,341
93.940 Hiv Prevention Activities_health Department Based $9,665
93.977 Preventive Health Services_sexually Transmitted Diseases Control Grants $2,472