Finding 571132 (2024-002)

Finding Number: 2024-002 Finding Type: Internal Control Over Compliance – Subrecipient Monitoring Information on the Federal Programs: Federal Agency: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.267 Federal Program Name: Continuum of Care Program Federal Award Periods: October 1, 2022 – September 30, 2023 October 1, 2023 – September 30, 2024 Federal Awards: VT0081Y1T002102, VT0081Y1T002103 VT0082Y1T002102, VT0082Y1T002103 VT0083Y1T002102, VT0083Y1T002103 VT0084Y1T002102, VT0084Y1T002103 VT0085Y1T002102, VT0085Y1T002102 Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.623 Federal Program Name: Basic Center Program Federal Award Periods: October 1, 2022 – September 30, 2023 October 1, 2023 – September 30, 2024 Federal Awards: 90CY7401-01-00 90CY7401-01-00 Criteria: Elevate Youth Services, Inc. has the responsibility to monitor the programmatic and financial components of any Federal grant funds that it passes through to another organization. Monitoring activities include and are not limited to the following: 1) Establishing formal policies and procedures regarding Elevate’s approach to subrecipient monitoring and creating tools to track and document subrecipient programmatic and financial performance under the award. 2) Performing risk assessments of subrecipients throughout the year to identify areas of risk or identify changes with subrecipients that could trigger compliance risks. 3) Review of programmatic and financial activities related to the awards through site visits or desk review. 4) Formal communication to subrecipients as it relates to the results of site visits or desk reviews and the process for necessary corrective action, when necessary. Draft #2 ELEVATE YOUTH SERVICES, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2024 33 Section III. Federal Award Findings and Questioned Costs (continued) Finding Number: 2024-002 (continued) Condition Found and Context: Elevate did not perform complete subrecipient site visits or desk reviews at either the programmatic and financial performance level consistently during the year under audit, however the program staff developed its approach to site visits and created tools to initiate site visits. Elevate did perform site visits and completed exit conferences on site, however, the results of the visits have not been formally documented or communicated to the subgrantees or to Elevate’s management. Cause and Effect: Elevate experienced significant staffing challenges in managing this award from the program’s inception. While Elevate has a long experience of providing subgrants to partner organizations, the personnel responsible for the management of this program turned over frequently enough that a formal and consistent practice of subrecipient monitoring has not been able to be established. This result of not performing consistent site visits and monitoring and formally communicating the results can result in delays in identifying noncompliance or not identifying noncompliance at all. Questioned Costs: None Repeat Finding: Yes Recommendation: Management should prioritize the completion in formalizing its policies and procedures as it relates to subrecipient monitoring for this program and these procedures should be consistent with other organizational monitoring programs. These procedures should include the process and timetable in which results will be communicated with the subgrantees and internally. Elevate must also complete its documentation on the site visits and communicate the results of the visits to its subgrantees and internally. Views of Responsible Official and Corrective Action Plan Management acknowledges and understands this finding. A response to the finding is noted in the Corrective Action Plan on pages 38-39.