FAC Explorer

Finding 575242 (2023-002)

Significant Deficiency Repeat Finding
Requirement
M
Questioned Costs
-
Year
2023
Accepted
2025-08-29
Audit: 365302
Organization: Houston Regional Hiv/aids Resource Group, Inc. (TX)
Auditor: Carr Riggs & Ingram LLC

AI Summary

  • Core Issue: The Resource Group failed to conduct timely financial monitoring of subrecipients, leading to non-compliance with grant requirements.
  • Impacted Requirements: This situation violates 2 CFR Section 200.332, which mandates that pass-through entities monitor subrecipients effectively.
  • Recommended Follow-Up: The Resource Group should adhere to its policies for fiscal monitoring and ensure proper training and staffing for compliance.

Finding Text

2023-002 Compliance and Internal Controls over Subrecipient Fiscal Monitoring (Significant Deficiency) (Repeat) U.S. Department of Health and Human Services 93.917 – HIV Care Formula Grants Passed through Texas Department of State Health Services Award Periods: April 1, 2022 to March 31, 2024 Contract No. HHS001022300001 Texas Department of State Health Services HIV Care Formula Grants Award Periods: April 1, 2022 to March 31, 2024 Contract No. HHS001022300001 Texas Department of State Health Services State HIV Service Grants Award Periods: April 1, 2022 to August 31, 2024 Contract No. HHS001022300002 Criteria: Pass-through entities are required to monitor subrecipients in accordance with 2 CFR Section 200.332. Further, under 2 CFR Section 200.303a, non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statutes, regulations, and the terms and conditions of the award. Condition: For the fiscal year ended December 31, 2023, The Resource Group did not timely perform financial monitoring of its subrecipients. Cause: Initially subrecipient monitoring was suspended due to COVID-19 in 2020 and reinstated late 2021. The Resource Group restarted their monitoring of subrecipients, however the monitoring was done by two individuals, one for programming and the other for financial monitoring. Monitoring of programming was completed timely, while the financial monitoring was not. Further, the Finance Director, who was responsible for the financial monitoring, resigned in 2023 and the successor Finance Director was hired in August 2023. After completing training to perform financial monitoring, the Finance Director completed financial monitoring during 2024. Effect: As a result of not completing all financial monitoring and the turnover in Finance Director, The Resource Group is not in compliance with grant requirements. Questioned Costs: None Noted Recommendation: The Resource Group should follow its policies to perform fiscal monitoring on its subrecipients in accordance with 2 CFR Section 200.332. Views of Responsible Officials: See corrective action plan.

Corrective Action Plan

2023-002 Compliance and Internal Controls over Subrecipient Fiscal Monitoring (Significant Deficiency) Corrective Action: In accordance with 2 CFR Section 200.332, The Resource Group as the pass-through entity will ensure subrecipient fiscal monitoring is completed in 2024 to ensure compliance with federal and state requirements. The Finance Director is responsible for oversight and administration of fiscal monitoring. Fiscal monitoring will be conducted at least annually in accordance with HRSA Monitoring Standards 45 CFR 74.51 and 45 CFR 75.352. As a pass-through entity, fiscal monitoring will include at minimum reviews of financial performance and compliance with federal and state statues, regulations and terms and conditions. The process will include desktop/remote verification of applicable financial policy and procedures and an onsite review. A standardized monitoring tool will be used to evaluate financial compliance. The fiscal monitoring observations will result in a monitoring report, disseminated to the subrecipient within 60 days of the onsite review. Progress to date: 1. To support the financial monitoring efforts, technical assistance was received on February 5-7, 2024, from the DSHS Fiscal Support and Oversight Department. The primary objective of the visit was to discuss financial monitoring requirements as it applies to state and federal regulations, statues and terms and conditions. The standardized monitoring tool was also evaluated for compliance. 2. The Finance Director developed and implemented a comprehensive fiscal monitoring schedule for calendar year 2024. In alignment with strengthened oversight practices, onsite fiscal reviews of subrecipients commenced in February 2024. As part of the enhanced monitoring approach, the testing period for subrecipient fiscal reviews was expanded beyond the standard scope to include transactions and activities from both Fiscal Year 2022 and Fiscal Year 2023. 3. As of September 2024, the Finance Director completed 100% of fiscal monitoring visits. a. Support Documentation: to establish additional guidelines for fiscal monitoring, the Fiscal Monitoring Policy was drafted and approved by the Board on November 18, 2024. 3 Responsible Party: Finance Director, Garland Thompson Date Complete: November 18, 2024

Categories

Subrecipient Monitoring Reporting Significant Deficiency

Other Findings in this Audit

  • 1151684 2023-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.917 Hiv Care Formula Grants $6.86M
14.241 Housing Opportunities for Persons with Aids $1.91M
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $1.05M
93.153 Coordinated Services and Access to Research for Women, Infants, Children, and Youth $944,183