Finding 616557 (2022-004)

Material Weakness
Requirement
M
Questioned Costs
-
Year
2022
Accepted
2023-02-09

AI Summary

  • Core Issue: Warren County Fiscal Court did not implement adequate internal controls for monitoring subrecipients, specifically failing to receive required quarterly reports from Live the Dream Development, Inc.
  • Impacted Requirements: This oversight violates compliance requirements under 2 CFR 200.332 for monitoring subrecipient activities and ensuring federal funds are used appropriately.
  • Recommended Follow-Up: Establish a clear process for tracking and obtaining required reports from subrecipients to ensure compliance and prevent unallowable activities from going unnoticed.

Finding Text

The Warren County Fiscal Court Failed To Implement Adequate Internal Controls Over Subrecipient Monitoring Federal Program: 21.027 COVID-19 - Coronavirus State And Local Fiscal Recovery Funds Award Number and Year: 1505-0271 2021 Name of Federal Agency and Pass-Thru Agency (if applicable): U.S. Department of the Treasury Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness Amount of Questioned Costs: None Opinion Modification (if applicable): Yes, Qualified COVID Related: Yes The Warren County Fiscal Court failed to implement adequate internal controls over subrecipient monitoring. The fiscal court granted a subaward of Coronavirus State And Local Fiscal Recovery Funds to Live the Dream Development, Inc. in the amount of $1,000,000 for an affordable housing project. As a requirement of the subaward, the subrecipient is required to submit quarterly progress and financial reports to the fiscal court. The fiscal court did not receive any quarterly subrecipient progress or financial reports during the 2021-2022 fiscal year. Awards unspent as of December 31, 2024 are required to be returned to the Warren County Fiscal Court. The award of $1,000,000 was paid on February 14, 2022. Subrecipient reports were not submitted by the subrecipient for quarters ending on March 31, 2022 or June 30, 2022. This was caused by an oversight of the fiscal court. The county treasurer was unaware that reports needed to be submitted to the fiscal court even if none of the funds have been spent by the subrecipient. The treasurer was under the assumption that the project had not been started as of June 30, 2022. By not receiving adequate subrecipient monitoring documentation, the fiscal court is unable to document their supervision of the subaward to the agency to ensure requirements for the federal monies are being followed. Additionally, unallowable activities could go unnoticed due to the lack of oversight. In addition, the opinion was modified. 2 CFR 200.332 lists the requirements for pass-through entities. 2 CFR 220.332(d) requires all pass-through entities to ?Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity.? Additionally, 2 CFR 200.501(a) states ?A non-federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part.? This is not a repeat finding from the previous year.

Categories

Subrecipient Monitoring

Other Findings in this Audit

  • 40115 2022-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Covid-19 - Coronavirus State and Local Fiscal Recovery Funds $7.32M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $359,338
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $190,000
16.738 Edward Byrne Memorial Justice Assistance Grant Program $117,974
95.001 High Intensity Drug Trafficking Areas Program $36,897
16.745 Criminal and Juvenile Justice and Mental Health Collaboration Program $36,820
97.039 Hazard Mitigation Grant $33,400
16.588 Violence Against Women Formula Grants $11,310