FAC Explorer

Finding 597591 (2022-003)

Significant Deficiency
Requirement
M
Questioned Costs
-
Year
2022
Accepted
2023-09-28
Audit: 21681
Organization: Pierce County (WA)
Auditor: Office of the Washington State Auditor

AI Summary

  • Core Issue: The County lacked adequate internal controls for monitoring compliance with federal subrecipient requirements, missing key elements in six subaward agreements.
  • Impacted Requirements: Federal regulations mandate that subaward agreements include 14 specific identification elements to ensure subrecipients understand their obligations.
  • Recommended Follow-Up: The County should enhance its contracting procedures to ensure all required elements are included in future subaward agreements and monitor compliance effectively.

Finding Text

2022-003 The County did not have adequate internal controls for ensuring compliance with federal subrecipient monitoring requirements. Assistance Listing Number and Title: 21.027 ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: US Department of the Treasury Federal Award/Contract Number: AWD-100786 Pass-through Entity Name: City of Lakewood Washington State Department of Commerce Pass-through Award/Contract Number: 2021-363 21-4619C-121 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program is to respond to the COVID-19 pandemic?s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer or broadband infrastructure. During 2022, the County spent $49,228,275 in program funds to cover expenditures related to supporting public health and safety services, paying employees who perform essential government services, and investing in water, sewer, and broadband infrastructure. The program funds included $31,950,387 passed through to 33 subrecipients in 2022 to fulfill components of the program?s objectives. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. When the County passes on federal funds to subrecipients, federal regulations require the County to ensure every subaward agreement clearly identifies that it is a federal award and includes the applicable federal requirements. The County is required to report 14 federal award identification elements in each subaward agreement. Whenever passing federal funding to subrecipients, federal regulations require the County to monitor them and ensure they comply with the terms and conditions of the federal award. Description of Condition Our audit found the County?s internal controls were ineffective for ensuring it included all 14 required elements in six subaward agreements established in 2022. The missing elements included: ? Subrecipients? Unique Entity Identifier ? Federal Award Identification Number (FAIN) ? Federal award date ? Amount of federal funds obligated ? Total amount of the federal award committed ? Name of the federal awarding agency ? Assistance Listing Number and program title We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition County staff relied on the agreement templates developed at the time it established contracts for SLFRF subawards, and did not ensure that the template included all required elements. Further, the County experienced turnover in the program specialist positions responsible for managing this program, and it lacked adequate staffing resources to ensure the six federal subaward agreements contained all the required contract elements. Effect of Condition When subaward agreements do not include the required information, subrecipients are at an increased risk of not knowing they received federal funding and need to comply with specific program requirements, which could lead to spending the funds for unallowable purposes. Due to turnover in the program specialist positions, the County was unable to confirm that it subsequently shared the missing information with the subrecipients. Recommendation We recommend the County ensure it includes all required elements in federally funded subaward agreements. County?s Response Pierce County understands the importance of providing all necessary information and expectations to subrecipients. Pierce County Human Services has taken steps to improve contracting oversight procedures for 2023 so that contracts with subrecipients will contain the required elements. Auditor?s Remarks We appreciate the County?s commitment to resolve this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for passthrough entities, establishes subrecipient monitoring and management requirements for pass through entities.

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles

Other Findings in this Audit

  • 21139 2022-002
    Significant Deficiency
  • 21140 2022-002
    Significant Deficiency
  • 21141 2022-002
    Significant Deficiency
  • 21142 2022-001
    Material Weakness
  • 21143 2022-001
    Material Weakness
  • 21144 2022-001
    Material Weakness
  • 21145 2022-001
    Material Weakness
  • 21146 2022-001
    Material Weakness
  • 21147 2022-001
    Material Weakness
  • 21148 2022-003
    Significant Deficiency
  • 21149 2022-003
    Significant Deficiency
  • 21150 2022-003
    Significant Deficiency
  • 597581 2022-002
    Significant Deficiency
  • 597582 2022-002
    Significant Deficiency
  • 597583 2022-002
    Significant Deficiency
  • 597584 2022-001
    Material Weakness
  • 597585 2022-001
    Material Weakness
  • 597586 2022-001
    Material Weakness
  • 597587 2022-001
    Material Weakness
  • 597588 2022-001
    Material Weakness
  • 597589 2022-001
    Material Weakness
  • 597590 2022-003
    Significant Deficiency
  • 597592 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.023 Covid 19 - Emergency Rental Assistance Program $32.20M
21.027 Covid 19 - Coronavirus State and Local Fiscal Recovery Funds $14.30M
93.778 Medical Assistance Program $5.96M
93.563 Child Support Enforcement $3.56M
97.036 Covid 19 - Disaster Grants - Public Assistance (presidentially Declared Disasters) $3.20M
14.218 Covid-19 Community Development Block Grants/entitlement Grants $1.68M
14.231 Covid 19 - Emergency Solutions Grant Program $1.61M
93.045 Special Programs for the Aging, Title Iii, Part C, Nutrition Services $1.42M
14.231 Emergency Solutions Grant Program $1.18M
20.205 Highway Planning and Construction $1.03M
14.218 Community Development Block Grants/entitlement Grants $729,265
84.181 Special Education-Grants for Infants and Families $672,041
14.881 Moving to Work Demonstration Program $364,648
93.052 Covid 19 - National Family Caregiver Support, Title Iii, Part E $360,221
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $334,527
20.106 Airport Improvement Program, Covid-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs $292,701
16.590 Grants to Encourage Arrest Policies and Enforcement of Protection Orders Program $285,009
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States $253,432
97.025 National Urban Search and Rescue (us&r) Response System $205,846
93.053 Nutrition Services Incentive Program $167,381
93.052 National Family Caregiver Support, Title Iii, Part E $156,149
97.029 Flood Mitigation Assistance $155,256
97.111 Regional Catastrophic Preparedness Grant Program (rcpgp) $142,506
81.042 Weatherization Assistance for Low-Income Persons $141,982
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $110,859
93.044 Covid 19 - Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $108,903
97.042 Emergency Management Performance Grants $108,887
93.569 Community Services Block Grant $103,945
20.224 Federal Lands Access Program $103,481
97.039 Hazard Mitigation Grant $99,277
10.665 Schools and Roads - Grants to States $98,530
15.616 Clean Vessel Act $78,035
93.568 Low-Income Home Energy Assistance $74,552
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $72,444
93.048 Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $45,534
16.609 Project Safe Neighborhoods $42,799
93.043 Special Programs for the Aging, Title Iii, Part D, Disease Prevention and Health Promotion Services $41,608
16.034 Covid 19 - Coronavirus Emergency Supplemental Funding Program $41,017
16.922 Equitable Sharing Program $39,407
93.048 Covid 19 - Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $35,835
14.267 Continuum of Care Program $26,561
14.239 Home Investment Partnerships Program $26,055
93.110 Maternal and Child Health Federal Consolidated Programs $18,512
16.588 Violence Against Women Formula Grants $18,114
93.045 Covid 19 - Special Programs for the Aging, Title Iii, Part C, Nutrition Services $16,463
97.012 Boating Safety Financial Assistance $13,839
16.738 Edward Byrne Memorial Justice Assistance Grant Program $9,472
93.044 Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $8,337
16.575 Crime Victim Assistance $8,060
93.041 Special Programs for the Aging, Title Vii, Chapter 3, Programs for Prevention of Elder Abuse, Neglect, and Exploitation $6,325
66.123 Geographic Programs - Puget Sound Action Agenda: Technical Investigations and Implementation Assistance Program $2,896
10.576 Senior Farmers Market Nutrition Program $2,310
20.600 State and Community Highway Safety $1,334
97.026 Emergency Management Institute Training Assistance $1,274
66.460 Nonpoint Source Implementation Grants $1,161
10.763 Emergency Community Water Assistance Grants $1,020
10.558 Child and Adult Care Food Program $657
97.067 Homeland Security Grant Program $152
20.616 National Priority Safety Programs $125