Finding Text
2022 ? 001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Award Identification Number and Year: SLT0198 Pass-Through Agency: County of Los Angeles Pass-Through Number: Unknown Award Period: March 1, 2020 through December 31, 2021 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: A pass-through entity (PTE) must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: ? Reviewing financial and programmatic (performance and special reports) required by the PTE. ? Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Condition: During our testing, we noted LAHSA did not have adequate internal controls designed to properly monitor its? subrecipients. Questioned costs: Unable to determine. Context: During our testing of subrecipient monitoring, it was noted that LAHSA did not monitor 1 out of 8 subrecipients tested. The subrecipient received $169,035 for the fiscal year ended June 30, 2022. Cause: LAHSA's new subrecipient monitoring process was not implemented until January 2022. At that time, the subrecipients that were not monitored did not have an active contract with federal funding. As such, they were deemed to be low risk. LAHSA does not have a policy in place to ensure that the subrecipient monitoring plan and risk assessment is revisited throughout the year to ensure new contracts are assessed and monitored appropriately. Effect: LAHSA did not perform required monitoring over subrecipients of federal funding. The lack of internal controls over this compliance requirement provides an opportunity for noncompliance by subrecipients of the grant. Repeat Finding: Yes. Recommendation: We recommend LAHSA implements controls to ensure that the subrecipient monitoring plan is revisited at the time contracts are entered into in order to ensure proper coverage. Views of responsible officials: There is no disagreement with the audit finding.