Finding Text
Finding No.: 2019-012
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5U79SP020710-04
Area: Subrecipient Monitoring
Questioned Costs: $468,864
Criteria:
In accordance with CFR part 200.332, a pass-through entity’s monitoring responsibilities include verification that every subrecipient is audited when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the $750,000 threshold set forth in §200.501 Audit requirements.
In addition, to equally distribute subawards, CHCC should issue public publication notices for interested nonprofit organizations to apply.
Condition:
Of five subrecipients tested, aggregating $160,000 of a total population of $468,864, the following deficiencies were noted:
1. For five (or 100%), documentation of the monitoring procedures performed to determine whether any of the subrecipients expended $750,000 or more in federal funds and whether those that expended $750,000 or more were audited, were not provided. Total FY2019 expenditures under the subrecipient agreements were $353,864, which is a questioned costs.
Finding No.: 2019-012, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5U79SP020710-04
Area: Subrecipient Monitoring
Questioned Costs: $468,864
Condition, continued:
Test of fourteen nonpayroll expenditures pertaining to subrecipient transactions, aggregating $438,864 of a total population of $468,864, the following deficiencies were noted:
2. For fourteen (or 100%), public publication notices of subaward opportunities were not provided. Total FY2019 expenditures under the subrecipient agreements for Document Numbers 1436077, 1436266, 1456803 and 1446815 amounted to $115,000, which are for the same subrecipients, are questioned. No questioned costs are presented for the other Document Numbers as amounts are questioned at Condition 1, for which are for the same subrecipients.
Finding No.: 2019-012, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5U79SP020710-04
Area: Subrecipient Monitoring
Questioned Costs: $468,864
Condition, continued:
3. For one (or 7%), supporting documents were not provided. No questioned costs is presented as the amount questioned at Condition 2 for Document Number 1436077 is for the same subrecipient.
Cause:
CHCC did not enforce recordkeeping and monitoring controls over applicable subrecipient monitoring requirements.
Effect:
CHCC is in noncompliance with applicable subrecipient monitoring requirements and questioned costs of $468,864 result.
Identification as a Repeat Finding: Finding No. 2018-019.
Recommendation:
CHCC should establish and enforce required monitoring procedures and establish a recordkeeping system whereby underlying support for each transaction is processed timely and filed accordingly for easy retrieval to substantiate costs.
Finding No.: 2019-012, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5U79SP020710-04
Area: Subrecipient Monitoring
Questioned Costs: $468,864
Views of Responsible Officials:
CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding described in Conditions 1 to 3.
Auditor Response:
Condition 1 - Invoices, receipts and progress reports from prior disbursements were not provided.
Condition 2 - Public publication notices of subaward opportunities were not provided.
Condition 3 - We were not made aware that the transaction was voided and the corresponding reversal journal entry was also not provided.
In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.