Bering Sea Fishermen's AssociationNon-Profit

2025-001 - Material Weakness in Internal Control and Material Compliance over Subrecipient Monitoring: Incomplete Subaward Agreements Identification of federal programs: Federal Agency: Department of Commerce (DOI) ALN: 11.438 – Pacific Coast Salmon Recovery Pacific Salmon Treaty Program Award Numbers: NA22NMF4380226, NA20NMF4380258, and NA21NMF4380467 Criteria: Per 2 CFR 200.332(a), pass-through entities must provide specific information to subrecipients at the time of the subaward, including but not limited to:  Subrecipient name, UEI, and contact information  Federal Award Identification Number (FAIN)  Federal award date  Period of performance  CFDA/ALN number and program name  Total amount of federal funds obligated  All requirements imposed by the pass-through entity  Indirect cost rate information  Provisions for closeout Failure to include the required information limits the subrecipient’s ability to comply with federal requirements. Condition: During our testing of subrecipient monitoring, we noted that the subawards were missing elements under 2 CFR 200.332(a), including the assistance listing number and amount of federal funds obligated. Further, these relevant compliance requirements were not communicated to the subrecipients at any other time in writing. The entity made subaward payments totaling $784,907 during the audit period without maintaining complete documentation demonstrating compliance with federal subaward requirements. Cause: Pass through funding through subawards was new for the Organization and they were not familiar with subrecipient disclosure requirements. Effect or potential effect: Failure to issue complete subaward agreements increases the likelihood that subrecipients may not comply with federal requirements. These deficiencies represent a material weakness because they indicate a reasonable possibility that material noncompliance with federal requirements could occur and not be prevented or detected. Questioned Costs: None. Context: There were seven subrecipients under the program. In 2025, subrecipient expenditures totaled $784,907. Identification of Repeat Finding: Not applicable. Recommendations: Management should implement a standardized subaward agreement template that incorporates all elements required by 2 CFR 200.332(a). Views of Responsible Officials: See Corrective Action Plan.

2025-002 Material Weakness in Internal Control and Material Compliance over Subrecipient Monitoring: Failure to Verify Single Audit Requirement and Follow Up on Findings Identification of federal programs: Federal Agency: Department of Commerce (DOI) ALN: 11.438 Pacific Coast Salmon Recovery Pacific Salmon Treaty Program Awards: NA22NMF4380226, NA20NMF4380258, and NA21NMF4380467 Criteria: The entity did not verify whether subrecipients who expended $750,000 or more in federal funds obtained the required single audit. Additionally, the entity did not document any follow-up or management decisions on potential subrecipient audit findings. Under 2 CFR 200.332(f)–(g), pass-through entities must:  Verify that subrecipients expending $750,000 or more in federal awards during the fiscal year have obtained a single audit in accordance with Subpart F.  Review subrecipient audits to determine whether findings related to the program exist.  Issue management decisions on audit findings, when applicable, and ensure timely corrective action. Condition: During our testing of subrecipient monitoring, we identified significant deficiencies in the entity’s processes for determining whether subrecipients were required to obtain a Single Audit and for following up on known audit findings:  The entity did not document whether the subrecipient spent $750,000 or more in federal awards and therefore did not determine whether a Single Audit was required under 2 CFR 200.501(a).  One subrecipients had publicly available Single Audit reports that included material weaknesses, yet the entity did not obtain the audit reports, review them, or follow up on corrective action plans.  No documentation was maintained to demonstrate that the entity performed annual verification of audit status, reviewed the Federal Audit Clearinghouse, or communicated with subrecipients regarding audit results. Recommendations: We recommend the entity develop and implement written procedures to: Annually assess subrecipient federal expenditures to determine single audit requirements, obtain and review subrecipient audit reports, including follow-up on any findings, document management decisions and track corrective action until resolution. Views of Responsible Officials: See Corrective Action Plan. Cause: The entity lacks formal policies and procedures for monitoring subrecipients in conformance with Uniform Guidance, including annual confirmation of federal expenditures and review of audit reports. Effect or potential effect: Failure to verify audit requirements and follow up on findings limits the entity’s ability to ensure subrecipients comply with federal regulations. This increases the risk of unaddressed noncompliance, misuse of federal funds, and potential liability for the pass-through entity. Questioned Costs: None. Context: There were seven subrecipients under the program of which 4 subrecipients were reviewed related to the monitoring of audit requirements. In 2025, subrecipient expenditures totaled $784,907. Identification of Repeat Finding: Not applicable.

2025-003 Material Weakness in Internal Control over Period of Performance: Costs Charged Outside the Period of Performance Identification of federal programs: Federal Agency: Department of Commerce (DOI) ALN: 11.438 Pacific Coast Salmon Recovery Pacific Salmon Treaty Program Award: NA20NMF4380258 Criteria: In accordance with 2 CFR 200.309, a non-Federal entity may charge to a Federal award only allowable costs incurred during the approved period of performance. Costs incurred outside the approved period of performance are not allowable unless explicitly authorized by the federal awarding agency. Condition: During testing of expenses, the auditors noted one expense that was individually significant related to a grant with a performance period ended on June 30, 2025. The expense was paid out in April 2025 consisted of a prepayment of a contract amount, of which management believed would be completed by the end of the performance period. Management was unable to provide documentation demonstrating the follow-up that the related services were performed or costs were incurred during the approved period of performance. Cause: Management did not have adequate internal controls in place to ensure that contract expenses charged to the federal award were supported by documentation demonstrating that costs were incurred within the approved period of performance. In this specific case, the contract was originally intended to be administered and paid through a subawardee; however, the payment was ultimately made directly by the Organization. While the Organization did receive documentation of work to be done, it didn’t receive documentation supporting progress, services performed, and work completed. Effect or potential effect: Because sufficient documentation was not available to demonstrate that the prepaid contract costs were incurred during the approved period of performance, the expenditure is considered unallowable and questioned. This represents noncompliance with federal program requirements applicable to a major program. Questioned Costs: $65,438 Context: During testing of compliance for the period of performance, one instance showed a prepayment of contracted services. Upon further inquiry and review it was noted that the Organization had no further documentation supporting the dates of services performed nor had confirmation that services had been performed by June 30, 2025, the requirement grant ending performance date, been obtained. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that management implement stronger controls over contract payments charged to federal awards to ensure that expenditures are supported by documentation demonstrating that costs are incurred within the approved period of performance. Management should also consult with the federal awarding agency or pass-through entity to determine the appropriate resolution of the questioned costs. Views of Responsible Officials: See Corrective Action Plan.

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