ICLEI - LOCAL GOVERNMENTS FOR SUSTAINABILITY U.S.A., INC.Non-Profit

2024-002 - Lack of Independent Review and Approval Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Allowable Costs/Cost Principles, Cash Management and Reporting) Program. Environmental and Scientific Partnerships and Programs; U.S. Department of State; ALN Number 19.017; Award Number SAQMIP23CA0021 Criteria. Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal controls over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. Condition. During our testing of Allowable Costs/Cost Principles, of the 12 items tested, we noted all 12 instances where time sheets were missing evidence of review and approval. In addition, there were no evidence of review and approval of the hourly rate or salary for all the employees tested. During Cash Management testing, of the three items tested, all three drawdown requests were missing evidence of review and approval. Finally, during our testing of Reporting, all four of the reports selected for testing lacked evidence of review and approval. Cause. This condition is the result of management not adhering to the Organization's internal control policies and procedures. Effect. The Organization did not comply with the federal requirements as noted per 2 CFR 200.303. Questioned Costs. None Recommendation. We recommend the Organization adheres to their internal control process of an independent review and approval of transactions, cash management and reporting related to federal grant programs. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

2024-003 - Federal Funding Accountability and Transparency Act (FFATA) Reporting Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Reporting). Program. Environmental and Scientific Partnerships and Programs; U.S. Department of State; ALN Number 19.017; Award Number SAQMIP23CA0021 Criteria. Title 2 U.S. Code of Federal Regulations (CFR) Part 170 Appendix A requires prime recipients of grants or cooperative agreements to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFAATA) Subaward Reporting System (FSRS). Prime recipients must report key data by registering through the FSRS and reporting subaward data through that system. Prime recipients that are awarded a federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than$30,000. Condition. The Organization did not register or submit any subaward information through the FSRS reporting system as required by the Uniform Guidance. Cause. The Organization was not aware of this requirement and therefore does not have the proper internal controls in place to ensure that FFATA reporting is completed promptly in accordance with the requirements Effect. The Organization did not follow federal requirements for FFATA reporting through the FSRS and as a result has not completed the appropriate subaward reporting that is required for prime recipients. Questioned Costs. None Recommendation. We recommend that the Organization establish and implement procedures for FFATA reporting through FSRS and ensure that all key data are reported timely moving forward. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

2024-004 - Subrecipient Monitoring Activities Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Subrecipient Monitoring) Programs. Environmental and Scientific Partnerships and Programs; U.S. Department of State; ALN Number 19.017; Award Number SAQMIP23CA0021 Criteria. Under 2 CFR Part 200.332(b), a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information required per the Uniform Guidance. Condition. During subrecipient monitoring testing, the ALN number and award number were not included in the four subrecipient agreements subjected to testing. Additionally, the Organization does not have a policies/procedures in place to evaluate and address subrecipient's fraud risk and risk of noncompliance. Cause. The Organization does not have the proper internal controls in place to ensure all aspects of subrecipient monitoring were performed in accordance with the requirements of the Uniform Guidance. Effect. Although certain subrecipient monitoring activities were performed, the Organization did not comply with all the federal requirements for subrecipient monitoring for pass-through entities. Questioned Costs. None Recommendation. We recommend that the Organization adopts additional policies and procedures related to subrecipient monitoring to ensure compliance with Uniform Guidance. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

2024-005 - Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment) Programs. Environmental and Scientific Partnerships and Programs; U.S. Department of State; ALN Number 19.017; Award Number SAQMIP23CA0021 Criteria. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. Condition. During Procurement, Suspension and Debarment testing, the Organization could not provide evidence that they determined whether vendors are suspended or debarred. Cause. The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect. Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Questioned Costs. None Recommendation. We recommend that the Organization adhere to the policy over suspension and debarment review to ensure they are contracting with vendors that are allowable. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

2024-006 - Failure to Maintain Standards for Documentation of Personnel Expenses Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance (Allowable Costs/Cost Principles). Programs. Environmental and Scientific Partnerships and Programs; U.S. Department of State; ALN Number 19.017; Award Number SAQMIP23CA0021 Criteria. Per 2 CFR 200.430 (g), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be incorporated into the official records of the recipient. Condition. During our testing of Allowable Costs, for all 12 disbursements tested we noted that the hourly rate charged under the grant was higher than the actual hourly rate noted in personnel files. Cause. This condition appears to have been caused by a lack of knowledge of applicable federal compliance requirements causing the grant to be incorrectly charged. Effect. As a result of this condition, the Organization did not fully comply with the Uniform Guidance by not charging the proper hourly rate to the grant. Questioned Costs. No costs are required to be questioned as a result of this finding, in as much as the actual and projected error was de minimis. Recommendation. We recommend that the Organization use actual rates per approved compensation records when charging costs to the grants. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.