Finding Text
Finding 2022-002: Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Community Mental Health Services Substance Abuse and Mental Health Services Administration Federal Assistance Listing Number: 93.958 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: As a federal prime awardee that passed-through funding to a related party, Easter Seals New Jersey, Inc. is required to submit a filing evidencing such subaward in accordance with the Federal Funding Accountability and Transparency Act ("FFATA") as defined under 2 CFR Chapter 1, Part 170. Condition and Context: Easter Seals New Jersey, Inc. was the prime awardee of ALN 93.958 during the year ended August 31, 2022. Easter Seals New Jersey, Inc. elected to passthrough the funding received from ALN 93.958 to CenterPath Wellness, Inc., a related entity included in the August 31, 2022 consolidated financial statements. As the subaward exceeded $30,000, Easter Seals New Jersey, Inc. was required to file a FFATA subaward report evidencing the amounts awarded to CenterPath Wellness, Inc. During our testing of the reporting compliance requirement, it was noted that Easter Seals New Jersey, Inc. did not report the subaward information. Cause: Due to the related party nature of the subaward, Easter Seals New Jersey, Inc. did not believe the FFATA subaward reporting requirement was applicable to the transaction. As such, Easter Seals New Jersey, Inc. did not report the subaward information. Subsequent filing of the FFATA subaward reporting has yet to be completed due to system errors that Easter Seals New Jersey, Inc. is working with the grantor to rectify. Effect: Due to Easter Seals New Jersey, Inc. not completing a FFATA subaward report, Easter Seals New Jersey, Inc. did not adhere to requirements defined under 2 CFR Chapter 1, Part 170. Questioned Costs: None Identification as a Repeat Finding: No Auditor's Recommendation: We recommend Easter Seals New Jersey, Inc. establish processes to ensure that passthrough funding arrangements are identified and proper subaward reporting requirements are completed in a timely manner in accordance with 2 CFR Chapter 1, Part 170. Easter Seals should also provide appropriate training to staff who are assigned to monitor and review reporting compliance. Views of Responsible Officials: Easter Seals agrees with the auditor?s findings. We are establishing new procedures that will strengthen communication between Finance and Program staff and have adopted controls with regards to obtaining, providing, and reporting subaward reporting requirements in accordance with 2 CFR Chapter 1, Part 170.