ERC/Resource & Referral, Inc. d/b/a Child Care Aware of Eastern KansasNon-Profit

Section III. Findings and Questioned Costs for Federal Awards Finding 2020-001 Significant Deficiency Federal Program - Coronavirus Relief Fund (CFDA No. 21.019), U.S. Department of the Treasury, Passed through Douglas County, Kansas and Shawnee County, Kansas. Compliance Requirement - Subrecipient Monitoring Condition - The Organization's monitoring procedures for their two subrecipients had the following deficiencies: I. The Organization did not document a formal risk assessment process prior to entering into the agreements with the subrecipients, II. The grant agreements with subrecipients did not contain all the required elements, such as the federal award identification number and CFDA number, subrecipient's DUNS number, the federal award date and the indirect cost rate for the award, III. The Organization did not document as verifying that subrecipients expected to have a single audit, met this requirement, IV. The Organization did not perform a check to verify their subrecipients were not suspended or debarred prior to entering into the agreement with them. Criteria ? Uniform Guidance requires a pass-through entity to perform a risk assessment process of their subrecipients, to include required elements in grant agreements with their subrecipients, to verify that subrecipients expected to have an audit under 3 CFR Part 200, Subpart F, met this requirement, and to perform a suspension and debarment check on their subrecipients. Cause ? The Organization was not fully informed by both grantors about the subrecipient monitoring requirements and had not had a single audit in the past. As a result, the Organization was not fully aware of the subrecipient monitoring requirements of the Uniform Guidance. Effect ? Although the Organization performed extensive monitoring of their subrecipients, the Organization?s subrecipients may not have all the required information they need to report on their grant from the Organization. Questioned Costs ? None noted. Recommendation ? The Organization should implement a formal policy that would include all required elements to comply with Uniform Guidance?s requirements for subrecipient monitoring. Auditee Contact ? Reva Wywadis, Executive Director Management?s Response/Corrective Action Plan (Unaudited) ? ERC Resource & Referral, Inc. had not had a single audit in the past. Because of the role played in distributing federal funding through the Coronavirus Relief Fund (CFDA No. 21.019) in 2020, a single audit was required. The agency was not fully informed by both grantors about the subrecipient monitoring requirements, and as a result was not fully aware of the subrecipient monitoring requirements of the Uniform Guidance. A corrective action plan has been developed to address this finding. A new financial policy was developed that outlines all expectations of subrecipients of federal funding so that in the future a process is in place that meets all federal requirements. The policy is being reviewed by the agency's finance and budget committee and the audit committee. It is on the agenda for approval at the November 17, 2021 executive committee meeting and will be effective immediately. These guidelines will be applied to any future subrecipients, ensuring that all expected compliance guidelines are met going forward.