Finding Text
FINDING 2023-009
Information on the federal program:
Federal Agency: Department of the Treasury
Pass-Through Entity: The Indianapolis Foundation and The City of Indianapolis
Federal Program: Coronavirus State and Fiscal Recovery Funds
Assistance Listing Number: 21.027
Compliance Requirement: Subrecipient Monitoring
Audit Findings: Material Weakness, Qualified Opinion
Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients.
Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that management did not have support indicating monitoring of subrecipients was performed to ensure the subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. This instance was noted for the subrecipient for the Education-to-Employment Pipeline and Talent Pipeline grants.
Additionally, Crowe noted that Training for Success was written into the Elevation grant as EmployIndy’s partner. However, expenditures to Training for Success were not reported as subrecipient funding on the SEFA. As EmployIndy did not report Training for Success as a subrecipient, EmployIndy did not perform monitoring procedures.
Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review SLFRF subaward activity.
Effect: Due to lack of required information being present, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients.
Questioned costs: There are no questioned costs.
Context: Subrecipients represented approximately 51%, $508,035, of the total ALN award, $987,698. The condition reported was prevalent across each subrecipient participating in the award.
Identification as a repeat finding, if applicable: This is not a repeat finding.
Recommendation: We recommend that EmployIndy review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award.
Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.