EIN: 205601947
UEI: E12MWCLMZLK4
Audited by: Forvis Mazars
Oversight agency: 12 [Department of Defense]
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Data as of August 31, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on February 11, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by August 11, 2026 (22 days ago).
What is a management decision? →FAC accepted this audit on January 17, 2025 — management decision was due July 17, 2025.
The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with procurement requirements. Consequently, for one (1) of six (2) contracts tested, the procurement policy was not followed and no documentation to reflect compliance with Uniform Guidance requirements related to procurement could be provided. Cause: The procurement policy retained by the Organization has not been updated to conform with the Organization’s current operations. Effect or potential effect: The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization updated its procurement policy to reflect current operations, but did not go back and document procurement compliance against existing vendors. The Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2023-005
Show full finding ▾Hide full finding ▴Procurement Suspension & Debarment Significant Deficiency in Internal Control over Compliance Research and Development Cluster Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurement standards conform to the applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with procurement requirements. Consequently, for one (1) of six (2) contracts tested, the procurement policy was not followed and no documentation to reflect compliance with Uniform Guidance requirements related to procurement could be provided. Cause: The procurement policy retained by the Organization has not been updated to conform with the Organization’s current operations. Effect or potential effect: The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization updated its procurement policy to reflect current operations, but did not go back and document procurement compliance against existing vendors. The Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2023-005
Management concurs with this finding. Management has taken steps to review and revise its procurement policies to comply with state and local laws, the standards of the CFO, as well as current operating procedures. The fining relates to contracts that were originally procured prior to the change in policies, with only renewals in the financial statement periods. Going forward, Management will document basis for procurement for renewals of contracts that originated prior to the new policies and procedures implementation.
2023-005
FAC accepted this audit on May 31, 2024 — management decision was due December 1, 2024.
During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, for one (1) of the contracts that contained a key personnel provision, the identified key person was removed from the contract and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect or potential effect: The Organization did not comply therefore with the provisions of the contract. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization’s compliance with these provisions and documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-002
Show full finding ▾Hide full finding ▴Special Tests and Provisions Material Weakness in Internal Control over Compliance and Material Noncompliance Research and Development Cluster Criteria: The Organization is required to maintain controls to ensure compliance with the terms of the contracts and/or grants which it negotiated with the federal government and is required to comply with the terms of the contract or grant agreements. Condition: During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, for one (1) of the contracts that contained a key personnel provision, the identified key person was removed from the contract and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect or potential effect: The Organization did not comply therefore with the provisions of the contract. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization’s compliance with these provisions and documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-002
Management concurs with this finding. Management has focused its attention on both the determination and designation of key personnel within a contract as well as the ongoing compliance of key personnel designations. Management has implemented control provisions to highlight and approve future key personnel designations within future contracts. Further, a semi-annual review process will be undertaken to review and document ongoing contractual compliance which will include reference to and consideration of key personnel designations.
2022-002
The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Show full finding ▾Hide full finding ▴Subrecipient Monitoring Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should institute a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-004
Management concurs with this finding. As noted in the response to Subrecipient Monitoring – Improper Communication to Subrecipient, Subrecipient vs. contractor differentiation has been an area of continued improvement. Management believes recent efforts to properly differentiate between subrecipients and contractors has resulted in accurate determinations. However, documentation, ongoing monitoring, and communication are areas for further improvement. To that end, Management has implemented a new subrecipient/contractor determination form that includes both documentation of the determination and a checklist for ongoing compliance and monitoring for both subrecipients and contractors. This form requires that a subrecipient monitoring plan be put in place which will address compliance with all applicable federal award conditions including Single Audits. Management believes implementation of this form/process will reduce the risk of further noncompliance.
2022-004
The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with procurement requirements. Consequently, for four (4) of four (4) contracts tested, the procurement policy was not followed and no documentation to reflect compliance with Uniform Guidance requirements related to procurement could be provided. Cause: The Organization did not have proper controls in place to monitor compliance with the procurement. Effect or potential effect: The procurement policy retained by the Organization has not been updated to confirm to the Organization’s current operations. The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned costs: None Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-003
Show full finding ▾Hide full finding ▴Procurement Suspension & Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Research and Development Cluster Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurement standards conform to the applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with procurement requirements. Consequently, for four (4) of four (4) contracts tested, the procurement policy was not followed and no documentation to reflect compliance with Uniform Guidance requirements related to procurement could be provided. Cause: The Organization did not have proper controls in place to monitor compliance with the procurement. Effect or potential effect: The procurement policy retained by the Organization has not been updated to confirm to the Organization’s current operations. The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned costs: None Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2022-003
Management concurs with this finding. Management is reviewing and revising its procurement policies to comply with state and local laws, the standards of the CFR, as well as reflect current operating procedures.
2022-003
FAC accepted this audit on April 1, 2024 — management decision was due October 1, 2024.
Two (2) of the four (4) contracts selected for testing contained a key personnel provision in the contract. The key person was not required to work a specified amount of hours, but the Organization was required to inform the Contracting Officer regarding any changes to the key personnel listing. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, for one (1) of the contracts that contained a key personnel provision, the identified key person was removed from the contract and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect or potential effect: The Organization did not comply therefore with the provisions of the contract. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization’s compliance with these provisions and documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2021-004
Show full finding ▾Hide full finding ▴Special Tests and Provisions Material Weakness in Internal Control over Compliance and Material Noncompliance Research and Development Cluster Criteria: The Organization is required to maintain controls to ensure compliance with the terms of the contracts and/or grants which it negotiated with the federal government and is required to comply with the terms of the contract or grant agreements. Condition: Two (2) of the four (4) contracts selected for testing contained a key personnel provision in the contract. The key person was not required to work a specified amount of hours, but the Organization was required to inform the Contracting Officer regarding any changes to the key personnel listing. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, for one (1) of the contracts that contained a key personnel provision, the identified key person was removed from the contract and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect or potential effect: The Organization did not comply therefore with the provisions of the contract. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization’s compliance with these provisions and documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2021-004
Management concurs with this finding. Management has focused its attention on both the determination and designation of key personnel within a contract as well as the ongoing compliance of key personnel designations. Management has implemented control provisions to highlight and approve future key personnel designations within future contracts. Further, a semi-annual review process will be undertaken to review and document ongoing contractual compliance which will include reference to and consideration of key personnel designations.
2021-004
The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with procurement requirements. Consequently, for four (4) of four (4) contracts tested, the procurement policy was not followed and no documentation to reflect compliance with Uniform Guidance requirements related to procurement could be provided. Cause: The Organization did not have proper controls in place to monitor compliance with the procurement. Effect or potential effect: The procurement policy retained by the Organization has not been updated to confirm to the Organization’s current operations. The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2021-005
Show full finding ▾Hide full finding ▴Material Weakness in Internal Control over Compliance and Material Noncompliance Research and Development Cluster Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurement standards conform to the applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with procurement requirements. Consequently, for four (4) of four (4) contracts tested, the procurement policy was not followed and no documentation to reflect compliance with Uniform Guidance requirements related to procurement could be provided. Cause: The Organization did not have proper controls in place to monitor compliance with the procurement. Effect or potential effect: The procurement policy retained by the Organization has not been updated to confirm to the Organization’s current operations. The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2021-005
Management concurs with this finding. Management is reviewing and revising its procurement policies to comply with state and local laws, the standards of the CFR, as well as reflect current operating procedures.
2021-005
The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. However, it was noted that the Organization implemented a process during the year to properly document whether a company is a contractor or a subrecipient. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are in compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should have instituted a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2021-006
Show full finding ▾Hide full finding ▴Material Weakness in Internal Control over Subrecipient Monitoring and Material Noncompliance Research and Development Cluster Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not document its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For three (3) of the three (3) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. However, it was noted that the Organization implemented a process during the year to properly document whether a company is a contractor or a subrecipient. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect or potential effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient’s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization is not appropriately monitoring whether subrecipients are in compliance with grant requirements. Questioned costs: None. Context: Our sample was not intended to be statistically valid. Recommendation: The Organization should have instituted a process whereby all entities that receive federal funds have proper documentation supporting their classification as a subrecipient or a contractor for the entire year. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval. Views of responsible officials and planned corrective actions: Management's response is reported in "Management's Views and Corrective Action Plan" included at the end of this report. Identification of prior year finding: 2021-006
Management concurs with this finding. As noted in the response to Subrecipient Monitoring – Improper Communication to Subrecipient, Subrecipient vs. contractor differentiation has been an area of continued improvement. Management believes recent efforts to properly differentiate between subrecipients and contractors has resulted in accurate determinations. However, documentation, ongoing monitoring, and communication are areas for further improvement. To that end, Management has implemented a new subrecipient/contractor determination form that includes both documentation of the determination and a checklist for ongoing compliance and monitoring for both subrecipients and contractors. This form requires that a subrecipient monitoring plan be put in place which will address compliance with all applicable federal award conditions including Single Audits. Management believes implementation of this form/process will reduce the risk of further noncompliance.
2021-006
FAC accepted this audit on December 1, 2022 — management decision was due June 1, 2023.
The Organization failed to submit its 2017-2020 audit reports and data collection forms (Form SF-SAC) to the Federal Audit Clearinghouse within the required timeframe. Cause: The Organization failed to receive an audit report in a timely manner in order to submit the financial statements and data collection form. Effect: The Organization automatically becomes a high risk entity and could face discipline from the cognizant agency. Questioned Costs: None. Recommendation: The Organization should receive and submit audit reports timely in the future to avoid penalties from the cognizant agency.
Show full finding ▾Hide full finding ▴Finding 2021-003 CFDA No. 12.RD ? Research and Development Cluster Compliance Finding Untimely filing of Data Collection Form (DCF) Criteria: The DCF must be submitted to the Federal Audit Clearinghouse the earlier of 30 days after receipt of the auditor?s reports or nine months after the end of the audit period. Condition: The Organization failed to submit its 2017-2020 audit reports and data collection forms (Form SF-SAC) to the Federal Audit Clearinghouse within the required timeframe. Cause: The Organization failed to receive an audit report in a timely manner in order to submit the financial statements and data collection form. Effect: The Organization automatically becomes a high risk entity and could face discipline from the cognizant agency. Questioned Costs: None. Recommendation: The Organization should receive and submit audit reports timely in the future to avoid penalties from the cognizant agency.
Management Response and Corrective Action Plan: Management concurs with this finding. Management is actively working to resolve this issue and will get all prior filings caught up and monitor ongoing future compliance. Efforts to reach prior audit firms who need to assist with these filings have been less than successful, but Management will continue to press. Compliance will also require timely coordination and completion of the annual financial statement audit.
2020-003
Two (2) of the eight (8) contracts selected for testing contained a key personnel provision in the contract. The key person was not required to work a specified amount of hours, but the Organization was required to inform the Contracting Officer regarding any changes to the key personnel listing. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, for one (1) of the contracts that contained a key personnel provision, the identified key person was removed from the contract and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect: The Organization did not comply with the provisions of the contract, which could have resulted in immediate termination of the contract. Questioned Costs: None. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization?s compliance with these provisions and documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable.
Show full finding ▾Hide full finding ▴Finding 2021-004 CFDA No. 12.RD ? Research and Development Cluster Compliance Finding and Other Matter in Internal Control over Compliance Special Tests and Provisions ? Noncompliance with key personnel provisions Criteria: The Organization is required to maintain controls to ensure compliance with the terms of the contracts and/or grants which it negotiated with the federal government and is required to comply with the terms of the contract or grant agreements. Condition: Two (2) of the eight (8) contracts selected for testing contained a key personnel provision in the contract. The key person was not required to work a specified amount of hours, but the Organization was required to inform the Contracting Officer regarding any changes to the key personnel listing. During the period of the contracts with these provisions, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, for one (1) of the contracts that contained a key personnel provision, the identified key person was removed from the contract and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect: The Organization did not comply with the provisions of the contract, which could have resulted in immediate termination of the contract. Questioned Costs: None. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization?s compliance with these provisions and documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable.
Management Response and Corrective Action Plan: Management concurs with this finding. Management has focused its attention on both the determination and designation of key personnel within a contract as well as the ongoing compliance of key personnel designations. Management has implemented control provisions to highlight and approve future key personnel designations within future contracts. Further, a semi-annual review process will be undertaken to review and document ongoing contractual compliance which will include reference to and consideration of key personnel designations.
2020-004
The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. Cause: The procurement policy retained by the Organization has not been updated to conform with the Organization?s current operations. Effect: The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned Costs: None. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR.
Show full finding ▾Hide full finding ▴Finding 2021-005 CFDA No. 12.RD ? Research and Development Cluster Material Weakness in Compliance and Internal Control over Compliance Procurement Suspension & Debarment ? Noncompliance with procurement policy Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurement standards conform to the applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. Cause: The procurement policy retained by the Organization has not been updated to conform with the Organization?s current operations. Effect: The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned Costs: None. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR.
Management Response and Corrective Action Plan: Management concurs with this finding. Management is reviewing and revising its procurement policies to comply with state and local laws, the standards of the CFR, as well as reflect current operating procedures.
2020-005
The Organization does not consistently documents its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the seven (7) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, for the one (1) entity that did have such documentation, the documentation did not include an evaluation and rationale for the Organization?s classification as a subrecipient. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For two (2) of the two (2) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient?s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to the dollar amounts being expended to subrecipients and becoming ineligible to receive funds or having to issue refunds to federal agencies. Questioned Costs: None. Recommendation: The Organization should institute a process whereby all entities that receive federal funds over a certain threshold as determined by the procurement policy have proper documentation supporting their classification as a subrecipient or a contractor. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval.
Show full finding ▾Hide full finding ▴Finding 2021-006 CFDA No. 12.RD ? Research and Development Cluster Material Weakness in Internal Control over Compliance Subrecipient Monitoring ? Inadequate controls over subrecipient monitoring Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not consistently documents its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For three (3) of the seven (7) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, for the one (1) entity that did have such documentation, the documentation did not include an evaluation and rationale for the Organization?s classification as a subrecipient. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For two (2) of the two (2) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance. Effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient?s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to the dollar amounts being expended to subrecipients and becoming ineligible to receive funds or having to issue refunds to federal agencies. Questioned Costs: None. Recommendation: The Organization should institute a process whereby all entities that receive federal funds over a certain threshold as determined by the procurement policy have proper documentation supporting their classification as a subrecipient or a contractor. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval.
Management Response and Corrective Action Plan: Management concurs with this finding. As noted in the response to Subrecipient Monitoring ? Improper Communication to Subrecipient, Subrecipient vs. contractor differentiation has been an area of continued improvement. Management believes recent efforts to properly differentiate between subrecipients and contractors has resulted in accurate determinations. However, documentation, ongoing monitoring, and communication are areas for further improvement. To that end, Management has implemented a new subrecipient/contractor determination form that includes both documentation of the determination and a checklist for ongoing compliance and monitoring for both subrecipients and contractors. This form requires that a subrecipient monitoring plan be put in place which will address compliance with all applicable federal award conditions including Single Audits. Management believes implementation of this form/process will reduce the risk of further noncompliance.
2020-006
FAC accepted this audit on December 1, 2022 — management decision was due June 1, 2023.
For one (1) of the four (4) subrecipients selected for subrecipient monitoring testing, the subrecipient was initially classified as a contractor rather than a subrecipient. The Organization later revised its determination, but did not inform the subrecipient of the change in status. Accordingly, the subrecipient was unaware of its status as a subrecipient under the federal grant. Cause: The Organization did not have an effective process in place to determine whether organizations receiving federal disbursements are subrecipients or contractors. Effect: The subrecipient was not aware that it was a subrecipient and, accordingly, was not aware of its requirements under the Uniform Guidance. Questioned Costs: None. Recommendation: The Organization should institute a review process over the subrecipient or contractor classification. If any errors are identified, the Organization should notify the relevant entity as soon as practicable.
Show full finding ▾Hide full finding ▴Finding 2020-002 CFDA No. 12.RD ? Research and Development Cluster Material Weakness in Compliance Subrecipient Monitoring ? Improper communication to subrecipient Criteria: In accordance with 2 CFR 200.33, the pass-through entity is required to ensure that every subaward is clearly identified to the subrecipient as a subaward and include required information for the subrecipient?s financial reporting determination. Condition: For one (1) of the four (4) subrecipients selected for subrecipient monitoring testing, the subrecipient was initially classified as a contractor rather than a subrecipient. The Organization later revised its determination, but did not inform the subrecipient of the change in status. Accordingly, the subrecipient was unaware of its status as a subrecipient under the federal grant. Cause: The Organization did not have an effective process in place to determine whether organizations receiving federal disbursements are subrecipients or contractors. Effect: The subrecipient was not aware that it was a subrecipient and, accordingly, was not aware of its requirements under the Uniform Guidance. Questioned Costs: None. Recommendation: The Organization should institute a review process over the subrecipient or contractor classification. If any errors are identified, the Organization should notify the relevant entity as soon as practicable.
Management Response and Corrective Action Plan: Management concurs with the finding. Subrecipient vs. contractor differentiation has been an area of continued improvement. Management believes recent efforts to properly differentiate between subrecipients and contractors has resulted in accurate determinations. However, documentation, ongoing monitoring, and communication are areas for further improvement. To that end, Management has implemented a new subrecipient/contractor determination form that includes both documentation of the determination and a checklist for ongoing compliance and monitoring for both subrecipients and contractors. Management believes implementation of this form/process will reduce the risk of further noncompliance.
The Organization failed to submit its 2017-2020 audit reports and data collection forms (Form SF-SAC) to the Federal Audit Clearinghouse within the required timeframe. Cause: The Organization failed to receive an audit report in a timely manner in order to submit the financial statements and data collection form. Effect: The Organization automatically becomes a high risk entity and could face discipline from the cognizant agency. Questioned Costs: None. Recommendation: The Organization should receive and submit audit reports timely in the future to avoid penalties from the cognizant agency.
Show full finding ▾Hide full finding ▴Finding 2020-003 CFDA No. 12.RD ? Research and Development Cluster Compliance Finding Untimely filing of Data Collection Form (DCF) Criteria: The DCF must be submitted to the Federal Audit Clearinghouse the earlier of 30 days after receipt of the auditor?s reports or nine months after the end of the audit period. Condition: The Organization failed to submit its 2017-2020 audit reports and data collection forms (Form SF-SAC) to the Federal Audit Clearinghouse within the required timeframe. Cause: The Organization failed to receive an audit report in a timely manner in order to submit the financial statements and data collection form. Effect: The Organization automatically becomes a high risk entity and could face discipline from the cognizant agency. Questioned Costs: None. Recommendation: The Organization should receive and submit audit reports timely in the future to avoid penalties from the cognizant agency.
Management Response and Corrective Action Plan: Management concurs with the finding. Management is actively working to resolve this issue and will get all prior filings caught up and monitor ongoing future compliance. Efforts to reach prior audit firms who need to assist with these filings have been less than successful, but Management will continue to press. Compliance will also require timely coordination and completion of the annual financial statement audit.
One (1) of the five (5) contracts selected for testing contained a key personnel provision in the contract. The key person was not required to work a specified amount of hours, but the Organization was required to inform the Contracting Officer regarding any changes to the key personnel listing. During the period of the contract, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, during the contract, an employee identified as a key person was terminated and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect: The Organization did not comply with the provisions of the contract, which could have resulted in immediate termination of the contract. Questioned Costs: None. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization?s compliance with these provisions and any documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable.
Show full finding ▾Hide full finding ▴Finding 2020-004 CFDA No. 12.RD ? Research and Development Cluster Compliance Finding and Other Matter in Internal Control over Compliance Special Tests and Provisions ? Noncompliance with key personnel provisions Criteria: The Organization is required to maintain controls to ensure compliance with the terms of the contracts and/or grants which it negotiated with the federal government and is required to comply with the terms of contracts or grant agreements. Condition: One (1) of the five (5) contracts selected for testing contained a key personnel provision in the contract. The key person was not required to work a specified amount of hours, but the Organization was required to inform the Contracting Officer regarding any changes to the key personnel listing. During the period of the contract, the Organization did not have a control structure in place to monitor compliance with these key personnel provisions. Consequently, during the contract, an employee identified as a key person was terminated and not replaced. The Contracting Officer was not informed of this change. Cause: The Organization did not have controls in place to monitor compliance with the key personnel provisions. Effect: The Organization did not comply with the provisions of the contract, which could have resulted in immediate termination of the contract. Questioned Costs: None. Recommendation: The Organization should incorporate a step in their contract review process that identifies any key personnel requirements. The Organization should discuss with the Contracting Officer prior to signing the contract the reasonableness of the provision. Additionally, for any key personnel provisions in contracts negotiated with the federal government, the Organization should ensure that it has controls in place to monitor compliance with these provisions. This control apparatus should include regular review of the Organization?s compliance with these provisions and any documented instances of noncompliance should be communicated to the Contracting Officer as soon as practicable.
Management Response and Corrective Action Plan: Management concurs with the finding. Management has focused its attention on the determination/designation of key personnel within a contract as well as the ongoing compliance of key personnel designations. Management has implemented control provisions to highlight and approve future key personnel designations within future contracts. Further, a semi-annual review process will be undertaken to review and document ongoing contractual compliance which will include reference to and consideration of key personnel designations.
The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. Cause: The procurement policy retained by the Organization has not been updated to conform with the Organization?s current operations. Effect: The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned Costs: None. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR.
Show full finding ▾Hide full finding ▴Finding 2020-005 CFDA No. 12.RD ? Research and Development Cluster Material Weakness in Compliance and Internal Control over Compliance Procurement Suspension & Debarment ? Noncompliance with procurement policy Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurement standards conform to the applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The Organization has a procurement policy in place; however, the Organization is not consistently following the procurement policy. Cause: The procurement policy retained by the Organization has not been updated to conform with the Organization?s current operations. Effect: The Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to vendors. Additionally, the Organization could become ineligible to receive funds from federal entities or may have to issue refunds to federal entities. Questioned Costs: None. Recommendation: The Organization should update its procurement policy to reflect current operations. Additionally, the Organization should review the current procurement operations in conjunction with the review of the procurement policies to ensure that all practices and policies conform to the standards promulgated by the CFR.
Management Response and Corrective Action Plan: Management concurs with the finding. Management is reviewing and revising its procurement policies to comply with state and local laws, the standards of the CFR, as well as reflect current operating procedures.
The Organization does not consistently documents its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For two (2) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, for the one (1) entity that did have such documentation, the documentation did not include an evaluation and rationale for the Organization?s classification as a subrecipient. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For two (2) of the two (2) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance.Effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient?s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to the dollar amounts being expended to subrecipients and becoming ineligible to receive funds or having to issue refunds to federal agencies. Questioned Costs: None. Recommendation: The Organization should institute a process whereby all entities that receive federal funds over a certain threshold as determined by the procurement policy have proper documentation supporting their classification as a subrecipient or a contractor. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked as to whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval.
Show full finding ▾Hide full finding ▴Finding 2020-006 CFDA No. 12.RD ? Research and Development Cluster Material Weakness in Internal Control over Compliance Subrecipient Monitoring ? Inadequate controls over subrecipient monitoring Criteria: In accordance with 2 CFR 200.331, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Additionally, in accordance with 2 CFR 200.332(b), the pass-through entity must evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining the appropriate subrecipient monitoring. In furtherance of this, the pass-through entity should inquire as to whether or not the subrecipient was subject to a Single Audit. If the subrecipient was subject to a Single Audit, the pass-through entity must request the Single Audit report and review for any findings or questioned costs. In accordance with 2 CFR 200.521, the pass-through entity should issue a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as applicable. Condition: The Organization does not consistently documents its evaluation of each party that it engages in business with as to whether they are a contractor or a subrecipient. For two (2) of the three (3) such parties selected for testing, the Organization did not maintain documentation regarding whether the entity was a subrecipient or a contractor. Furthermore, for the one (1) entity that did have such documentation, the documentation did not include an evaluation and rationale for the Organization?s classification as a subrecipient. Furthermore, as it relates to the monitoring of entities determined to be subrecipients, the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients are in compliance with federal statutes, regulations, and the terms and conditions of the subawards. For two (2) of the two (2) subrecipients selected for testing, the Organization did not inquire as to whether the entity was subject to a Single Audit. Consequently, the Organization did not request the Single Audit report nor did they review them for any findings pertinent to the federal award provided to the subrecipient from the pass-through entity. Cause: The Organization did not have an effective process in place to determine whether entities receiving pass-through funds are subrecipients or contractors. Furthermore, once that determination has been made, the Organization did not have a process in place for evaluating subrecipients and their compliance with the applicable requirements of the Uniform Guidance.Effect: Lack of proper consideration of subrecipient or contractor status may result in the Organization improperly classifying a recipient of federal funds, which may impact the recipient?s compliance with the Uniform Guidance. Furthermore, by not performing adequate monitoring over subrecipients, the Organization could become noncompliant with the requirements of the Uniform Guidance, resulting in future findings and questioned costs related to the dollar amounts being expended to subrecipients and becoming ineligible to receive funds or having to issue refunds to federal agencies. Questioned Costs: None. Recommendation: The Organization should institute a process whereby all entities that receive federal funds over a certain threshold as determined by the procurement policy have proper documentation supporting their classification as a subrecipient or a contractor. Additionally, the Organization should maintain a standardized checklist for all such entities that support their rationale for the classification. This checklist should be prepared by an employee with knowledge of the grant and approved by a second individual. Furthermore, as it relates to subrecipient monitoring, the Organization should institute an annual process whereby all subrecipients are asked as to whether they received a Single Audit. If the subrecipient was subject to a Single Audit, the Organization should receive and review the Single Audit report. The reviewer should submit a memorandum of any findings relevant to their federal grant, which should then be submitted to the project manager or other designated person for approval.
Management Response and Corrective Action Plan: Management concurs with the finding. As noted in the response to Subrecipient Monitoring ? Improper Communication to Subrecipient finding, Subrecipient vs. contractor differentiation has been an area of continued improvement. Management believes recent efforts to properly differentiate between subrecipients and contractors has resulted in accurate determinations. However, documentation, ongoing monitoring, and communication are areas for further improvement. To that end, Management has implemented a new subrecipient/contractor determination form that includes both documentation of the determination and a checklist for ongoing compliance and monitoring for both subrecipients and contractors. This form requires that a subrecipient monitoring plan be put in place which will address compliance with all applicable federal award conditions including Single Audits. Management believes implementation of this form/process will reduce the risk of further noncompliance.
FAC accepted this audit on December 1, 2022 — management decision was due June 1, 2023.
During out testing of subrecipient monitoring compliance requirements, it was noted that the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients and/or subcontractors are in compliance with Federal statutes, regulations and terms and conditions of the subawards. For two (2) of three (3) subrecipients tested to ensure that the Organization was monitoring subrecipients for compliance with Federal statues, regulations and terms and conditions of sub-awards, it was noted the Organization failed to verify that subrecipients with annual federal grant expenditures exceeding $750,000 complied with the Uniform Guidance audit requirements. In addition, for four (4) of five (5) subrecipients and/or subcontractors, the Organization did not properly report sub-award and executive compensation data on the FFATA Subaward Reporting System (FSRS). Effect: The Organization could become noncompliant with requirements of Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to subrecipients and becoming ineligible to receive funds or having to issue refunds to cognizant agencies. Questioned Costs: None Our Recommendation: We recommend the Organization establish formal subrecipient monitoring policies and procedures which ensure compliance with Uniform Guidance requirements. Additionally, we recommend that the Organization provide trainings to its contracting officers regarding subrecipient compliance requirements. Management?s Views and Corrective Action Plan: Management concurs with the finding. Subsequent to fiscal year ended June 30, 2019, management has implemented formal policies and procedures to ensure the Organization complies with the Uniform Guidance subrecipient monitoring compliance requirements. Management will also implement trainings for its contracting officers to properly report sub-award and executive compensation data on the FFATA Subaward Reporting System (FSRS).
Show full finding ▾Hide full finding ▴Criteria: OMB Uniform Guidance ?200.331(b) states that a pass-through entity must ?Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and then terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? Condition: During out testing of subrecipient monitoring compliance requirements, it was noted that the Organization has not formally documented its subrecipient monitoring procedures to ensure that subrecipients and/or subcontractors are in compliance with Federal statutes, regulations and terms and conditions of the subawards. For two (2) of three (3) subrecipients tested to ensure that the Organization was monitoring subrecipients for compliance with Federal statues, regulations and terms and conditions of sub-awards, it was noted the Organization failed to verify that subrecipients with annual federal grant expenditures exceeding $750,000 complied with the Uniform Guidance audit requirements. In addition, for four (4) of five (5) subrecipients and/or subcontractors, the Organization did not properly report sub-award and executive compensation data on the FFATA Subaward Reporting System (FSRS). Effect: The Organization could become noncompliant with requirements of Uniform Guidance, resulting in future findings and questioned costs related to dollar amounts being expended to subrecipients and becoming ineligible to receive funds or having to issue refunds to cognizant agencies. Questioned Costs: None Our Recommendation: We recommend the Organization establish formal subrecipient monitoring policies and procedures which ensure compliance with Uniform Guidance requirements. Additionally, we recommend that the Organization provide trainings to its contracting officers regarding subrecipient compliance requirements. Management?s Views and Corrective Action Plan: Management concurs with the finding. Subsequent to fiscal year ended June 30, 2019, management has implemented formal policies and procedures to ensure the Organization complies with the Uniform Guidance subrecipient monitoring compliance requirements. Management will also implement trainings for its contracting officers to properly report sub-award and executive compensation data on the FFATA Subaward Reporting System (FSRS).
Management?s Views and Corrective Action Plan: Management concurs with the finding. Subsequent to fiscal year ended June 30, 2019, management has implemented formal policies and procedures to ensure the Organization complies with the Uniform Guidance subrecipient monitoring compliance requirements. Management will also implement trainings for its contracting officers to properly report sub-award and executive compensation data on the FFATA Subaward Reporting System (FSRS).
2018-001
FAC accepted this audit on December 1, 2022 — management decision was due June 1, 2023.
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
Show full finding ▾Hide full finding ▴FAC accepted this audit on September 27, 2022 — management decision was due March 27, 2023.
FAC accepted this audit on March 27, 2017 — management decision was due September 27, 2017.
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