Finding 522370 (2024-002)

Program Affected Assistance Listing 93.566 Department of Health and Human Services - Direct Award Refugee and Entrant Assistance State/Replacement Designee Administered Programs Award Year October 1, 2023 through September 30, 2025 Criteria 2 CFR §200.329(a) specifies that "The recipient and subrecipient must monitor their activities under Federal awards to ensure they are compliant with all requirements and meeting performance expectations. Monitoring by the recipient and subrecipient must cover each program, function, or activity." Condition and Context Management was notified by program staff that invoices for services rendered during the last quarter of the fiscal year were pending approval and were therefore not captured in the year end accrual. An internal control deficiency was identified related to monitoring of the subrecipient's programmatic activity which are only performed sporadically, and as such, review of such activity at year end was not completed in a timely manner. Cause and Effect The condition identified was caused by infrequent and informal review of program-related subrecipient costs, which were not reconciled as this process was not occurring on a regularly scheduled basis. This resulted in an understatement of program-related subrecipient expenses of $247,119. The schedule of expenditures of federal awards has been adjusted to include these expenses. Recommendation We recommend the Organization perform monthly reconciliations of programmatic accruals for its subrecipients and adjust general ledger accounts accordingly. Management's estimate should materially reflect the services rendered for which the Organization is responsible. Identification as a Repeat Finding, if Applicable Not applicable. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding. See attached Corrective Action Plan.