Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Community Development Block Grant/Entitlement Grants
Assistance Listing Number: 14.218
Award Period: June 23, 2009 through September 1, 2029
Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA)
Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance
Condition: The County did not report required subaward information to FSRS for first-tier subawards of $30,000 or more.
Criteria or specific requirement:
Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.
The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)
Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Context: Three of five subawards selected for testing were improperly reported to FSRS. Total subawards tested was $801,983, and only $314,269 was reported as required by FFATA requirements.
Questioned costs: None noted.
Cause: The County’s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors.
Effect: Subawards were not reported to FSRS in accordance with FFATA requirements.
Recommendation: We recommend that the County subsequently report the subawards not reported in FSRS. We further recommend the County strengthen controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS.
Views of responsible officials: Management agrees with the finding. Community Services was made aware of the FFATA issue at the end of FY22. The Department developed and executed a Standard Operating Procedure (SOP) to ensure all awards over $30,000 were submitted to the FSRS system within the required time. In FY23 we entered the FY22 and FY23 sub-recipient awards in FSRS. In FY23 there were expenses for sub-recipient awards that were issued in FY20 and FY21, which was identified by CLA. The Department will modify our SOP to require all sub-recipient awards be entered regardless of the fiscal year they were awarded; this ensures accurate and up-to-date reporting.