THE AMERICAN SOCIETY OF HEMATOLOGY, INC.Non-Profit

Condition Certain required monitoring measures, such as verifying a subrecipient is audited as required by the Uniform Guidance, did not happen. There was also no documentation that the initial risk assessment had been updated to determine if the Society?s initial risk assessment had changed. Criteria The Uniform Guidance requires federal award recipients to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. The federal award recipients should evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for determining the appropriate subrecipient monitoring and such risk assessment should be re-evaluated on an annual basis. The federal award recipients should also verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth by the Uniform Guidance. The recipient should determine that the subaward was included on the subrecipeint?s SEFA. In addition, Section 200.213 of the Uniform Guidance states that non-federal entities are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Context Certain required monitoring measures, such as verifying a subrecipient is audited as required by the Uniform Guidance, did not happen. There was also no documentation that the initial risk assessment had been updated to determine if the Society?s initial risk assessment had changed. The Society has only one subrecipient and we noted that the Society did not perform suspension and debarment verification before awarding federal awards to its subrecipients. Our sample was not statistically valid. Cause The cause of this finding is related to the awareness of the Society?s explicit requirements around subrecipient monitoring activities. Specifically, the ongoing risk assessment and monitoring requirements were not included in the Society?s fiscal policy and procedure manual. The Society was also unaware of the suspension and debarment check requirement for subrecipients under the Uniform Guidance. Effect Lack of ongoing risk assessment and improper monitoring may result in insufficient supervision of subrecipient(s) necessary to satisfy the responsibilities prescribed by the standards. The Society was not in compliance with the suspension and debarment compliance requirement. Questioned Costs None. Recommendation We recommend that the Society develop a comprehensive subrecipient checklist to ensure that all required procedures are performed annually to comply with the prescribed requirements. In addition, the Society?s staff should develop procedures to ensure that suspension and debarment verifications are performed on subrecipients when initially awarded and on an annual basis to update the risk assessment. This verification should also be updated annually and the search results should be maintained in the vendor file as evidence of the procedures. Repeat Finding No. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2021-002: Review and Approval of Reports and Federal Drawdowns Information on the Federal Programs: All Federal Programs Criteria: According to Title 2 CFR 200.303, the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Condition: During our audit, we noted that there was no evidence of review and approval for submitted Federal Financial Reports, quarterly progress reports, drawdowns, and indirect calculations. Cause: During the year under audit, there was no policy or procedure in place for documented review and approval to take place. While this process did take place informally, there was no audit trail to evidence the review occurring. Effect: Without proper review, there may be potential misstatements within the reporting process, or an under- or over-draw on Federal funds. Questioned Costs: None Context: 2 of 2 Federal Financial Reports, 2 of 2 Progress Reports and 1 drawdown sampled did not have evidence of approval by a supervisor. It appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend all reconciliations, along with reports filed in connection with the Federal awards should be reviewed and approved. Evidence of such review and approval should be indicated, either via email, an encrypted electronic signature, or physical signature on documents. Anticipated Completion Date: Completed. Responsible Official: Tiffany Ake, Chief Financial Officer

Finding 2021-003: Subrecipient Management and Monitoring Policies and Procedures Federal Programs: CFDA 93.137 Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities (i.e. the Society) must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient (i.e. pre-award risk assessment procedures). Our audit work over subrecipient expenditures revealed instances where pre-award risk assessment procedures were not performed. We also noted that these requirements were not incorporated into the Society?s current policies and procedures. Condition: Our audit work over subrecipient expenditures revealed that while the Society did perform preaward risk assessment and monitoring procedures, the Society does not have formalized policies and procedures in place. Our audit procedures consisted of substantive testwork over a sample of subrecipient expenditures that were selected based on a threshold. We consider our sample to be representative of the population. Cause: The Society did not have appropriate policies and procedures in place to ensure that pre-award risk assessment and monitoring procedures were performed (and documented). Effect: The Society could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (monitoring) to ensure that subrecipients are expending funds in accordance with the provisions and terms of the subaward. Questioned Costs: None Context: When inquired on documented policies and procedures for subrecipients, none could be provided. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend the Society update its policies and procedures surrounding subrecipients to incorporate these requirements. Recommended updates are as follows: ? Establish criteria to be used in the evaluation of the risk of noncompliance associated with the intended subrecipient for the purpose of determining the expected level of oversight during the period of performance. This evaluation should include a scaling system, such as high, moderate or low risk (for example), and the monitoring tools and procedures to be performed at each of these levels (additional training, on-site reviews, types of and frequency of reporting, etc.). ? Although the Society is currently compliant with 2 CFR 200.331 part (a), which states that all passthrough entities must ensure that every subaward is clearly identified to the subrecipient as a subaward, and that the award documents must include certain data elements from the passthrough entity?s award, we noted that this was not included within the Society?s current policies and procedures. To ensure a complete and thorough policy surrounding subrecipient management and monitoring, we further recommend that the Society also incorporate such requirements into its policies and procedures. Anticipated Completion Date: Completed. Responsible Official: Tiffany Ake, Chief Financial Officer

Finding 2021-004: FFATA Reporting for Subrecipients Federal Programs: CFDA 93.137 Criteria: The Federal Funding Accountability and Transparency Act (FFATA) requires most recipients of new Federal funds awarded on or after October 1, 2010 to report on subawards/subcontracts/consortiums equal to or greater than $30,000. This includes awards that are initially below $30,000 but subsequent grant modifications result in an award equal to or greater than $30,000. Recipients are required to report subrecipient information to the FFATA Subaward Reporting System (FSRS). Grantees are required to register with FSRS, collect the necessary data from subawardees, and file subaward reports by the end of the month following the month in which the prime grantee awards any subaward greater than $30,000. Condition: Our inquiries with management during our audit conclude that FFATA reporting did not occur for the subrecipients of Federal awards, where awards, including grant modifications exceeded the threshold of $30,000. Cause: The Society was not aware of the FFATA reporting requirement for its subrecipients. Effect: Subrecipients that receive the Federal funding will not be included in the FSRS site, which is meant to be a collection tool for subaward data which will is ultimately distributed for publication and display on USASpending.gov. Questioned Costs: None Context: When inquired on FFATA reporting for subrecipients, management noted it was not performed. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend the Society be aware of all the compliance requirements included on its Federal funding to ensure all compliance requirements are met, including FFATA reporting requirements. For first-tier subawards involving an obligation of $30,000 or more in Federal funds, prime Federal fund recipients must report the following information: 1. Name of the entity receiving the award; 2. Amount and date of the award; 3. Funding agency; 4. Catalog of Federal Domestic Assistance (CFDA) number; 5. Award title descriptive of the purpose of each funding action; 6. Location of the sub-recipient receiving the award and primary location of performance under the award, including city, state, congressional district, and country; 7. DUNS number of the sub-recipient receiving the award and the parent entity of the sub-recipient, should the entity be owned by another entity. Anticipated Completion Date: Completed. Responsible Official: Tiffany Ake, Chief Financial Officer

Finding 2021-005: Procurement Policy Information on the Federal Programs: All Federal Programs Criteria: Title 2 CFR ? 200.318 states the non-Federal entity must have and use documented procurement procedures, consistent with regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327.? This is also in accordance with Title 45 Part 75. Condition: The Society did not have a procurement policy in place during the year under audit. Cause: The Society did not include procurement requirements that were in compliance with Uniform Guidance. Effect: Without proper procurement policy and documentation, there is a risk the Society will not perform proper evaluation of each element of cost to determine reasonableness, allocability and allowability. Questioned Costs: Undeterminable Context: When inquired on whether there was a procurement policy in place during the year under audit, management noted it had not yet been formalized and implemented. Recommendation: We recommend that the Society adopt a formal procurement policy. All documentation in connection with every procurement action should be filed in the procurement files. Anticipated Completion Date: Completed. Responsible Official: Tiffany Ake, Chief Financial Officer