Finding 968836 (2023-002)

Criteria: Per 2 CFR Appendix A to Part 170, recipients (i.e. direct recipients) of grants or cooperative agreements are required to report first-tier sub-awards $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Sub-Award Reporting System (FSRS). The non-Federal entity must report each obligating action no later than the end of the month following the month in which the obligation was made. Condition/context: During testing, it was determined the Department did not submit the required reports to the FSRS following the obligation of federal funds, as required under the FFATA. Cause: The Department did not have adequate controls in place to verify the necessary reports were being properly submitted within the required time period under FFATA. Effect: Per 2 CFR 200.339, if a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in §200.208 Specific conditions. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances: (a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or pass-through entity. (b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. (c) Wholly or partly suspend or terminate the Federal award. (d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency). (e) Withhold further Federal awards for the project or program. (f) Take other remedies that may be legally available. Questioned costs: None. Identification as a repeat finding: No. Recommendation: We recommend the Department review its internal controls surrounding FFATA reporting and train all program managers responsible for federal funds on the processes in place to ensure all individuals responsible for completing and submitting the reports are properly trained to do so. Views of responsible officials: Management concurs with the finding. See Exhibit I for corrective action plan.