Community Partners

Subrecipient Monitoring Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare crisis (93.931). Criteria: The Uniform Guidance in 2 CFR Section 200.332 states that pass-through entities 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.” Condition and context: The Organization did not have a subrecipient risk assessment process in place that corresponded with a risk-based monitoring plan. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: Yes, see finding 2022-006. Recommendation: We recommend that the Organization implement a formal risk assessment process to monitor its subrecipients. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.

Subrecipient Monitoring Finding Type: Material Weakness in Internal Controls over Compliance and Noncompliance Federal Program Title and AL Number: Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis (93.391). Criteria: 2 CFR Section 200.332 states that pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501 as well as folow up and ensure the subrecipients take timely and appropriate action on all deficiencies pertaining to the federal award, including actions taken to address single audit findings. Condition and context: Subrecipients were required to certify whether a single audit was required; and if completed, to report any findings. We were unable to obtain documentation that management followed up on the reported findings for two out of the nine statistically valid samples. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: No. Recommendation: We recommend that the Organization implement a process to follow up with subrecipients to ensure compliance with 2 CFR Section 200.332. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.

Period of Performance Finding Type: Material Weakness in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: According to 2 CFR Section 200.403 (g) and (h), costs must be adequately documented and incurred during the approved budget period. Additionally, per 2 CFR Section 200.334, non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report. Condition and context: During our period of performance testing, management was unable to provide documentation to support one out of the eight statistically valid samples. Cause: The Organization did not have controls in place to maintain documentation of project expenses. Effect: Failure to obtain sufficient support for payments made could result in inappropriate costs charged to the federal award during the approved budget period. Questioned Costs: $77,862 (known). $174,680 (likely). Repeat finding: No. Recommendation: We recommend that the Organization implement procedures to maintain adequate records. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.

Allowable Costs/Cost Principles - Payroll Allocations Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: According to 2 CFR Section 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition and context: Payroll costs charged to the program were not based on actual hours worked. This condition was noted for two statistically valid samples. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.430. Effect: Estimated payroll charges to the federal award were not adjusted to reflect actual time spent. Questioned Costs: $15,701 (known), $94,514 (likely). Repeat finding: No. Recommendation: We recommend the Organization implement procedures to review and approve time spent on each award. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.

Subrecipient Monitoring Finding Type: Significant Deficiency in Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: The Uniform Guidance in 2 CFR Section 200.332 (b) states that pass-through entities 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.” Condition and context: The Organization did not have a subrecipient risk assessment process in place that corresponded with a risk-based monitoring plan. Cause: The Organization’s internal controls did not ensure compliance with 2 CFR Section 200.332. Effect: The Organization did not comply with subrecipient monitoring requirements. Questioned Costs: Questioned costs are not able to be determined. Repeat finding: No. Recommendation: We recommend that the Organization implement a formal risk assessment process to monitor its subrecipients. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.

Reporting Finding Type: Material Weakness Internal control over compliance and noncompliance Federal Program Title and AL Number: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (93.323). Criteria: According to 2 CFR Section 200.329 (c)(1), the non-federal entity must submit performance reports at the interval required by the pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually, and a subrecipient must submit to a pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. Condition and context: The Organization could not provide the final reports for two different grants, nor did they maintain adequate documentation that reports were reviewed and filed. This condition was noted during the testing of four statistically valid samples. Cause: The Organization had ineffective controls in place for reporting and related recordkeeping in accordance with 2 CFR Section 200.329 (c)(1). Effect: Without adequate controls in place to ensure projects submit accurate reports on a timely basis, reporting requirements may not be met or reporting could be inaccurate. Questioned Costs: None. Repeat finding: No. Recommendation: We recommend that the Organization implement policies and procedures to ensure federally required reports prepared by their projects are reviewed. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.

2021-003-Activities Allowed or Unallowed and Allowable Costs/Cost Principles Finding Type: Internal control over compliance ? Material weakness Federal program title and Assistance Listing Number: U.S. Department of Treasury ? Coronavirus Relief Fund (21.019) Criteria: Title 2 CFR Section 200.303 (a) requires non-federal entities to 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). Condition: We selected a statistically valid sample of 16 payroll and benefit transactions during the year. The Organization was unable to provide documentation to support the approval for 6 of the timecards to support the expense. Questioned Costs: None. Cause: Although the employees selected completed a timecard, and the entry of the payroll transaction for that project was reviewed prior to being posted, the direct supervisor did not approve the timecard. Effect: The control over payroll existed however it was not operating as designed in order to ensure compliance with 2 CFR Section 200.303 (a). Repeat finding: No. Recommendation: We recommend the Organization implement procedures to ensure the retention of approval of timecards for each payroll period. Views of responsible officials and planned corrective actions: Management concurs with the finding. Please see attached corrective action plan.

2021-004-Activities Allowed or Unallowed and Allowable Costs/Cost Principles Finding Type: Internal control over compliance ? Material weakness Federal program title and Assistance Listing Number: U.S. Department of Justice-Crime Victim Assistance (AL 16.575) Criteria: Title 2 CFR Section 200.403 (g) and (h) costs must be adequately documented and must be incurred during the approved budget period. Condition: During our testing, we noted the Organization claimed approximately $966,667 for reimbursement when incurring approximately $825,078 in allowable costs. Context: The Organization did not appropriately identify the terms and conditions of the grant. The revenue was billed based on the agreed-upon milestone amounts instead of actual costs incurred. As a result, the related revenue recorded for the federal program was in excess of the actual expenses incurred. Questioned Costs: $141,589. Cause: The Organization did not have an effective procedure in place to ensure compliance with 2 CFR Section 200.403. Effect: The Organization did not comply with the federal cost principles requirements. Repeat finding: No. Recommendation: We recommend the Organization implement procedures to ensure the compliance with the federal cost principles requirements. Views of responsible officials and planned corrective actions: Management concurs with the finding. Please see attached corrective action plan.

2019-001 Community Development Block Grants/Entitlement Grants ? CFDA 14.218 Criteria: Under the funding terms and conditions of the contract section 601 - Reporting Requirements, the Organization shall submit the Expenditure Report on or before the 15th day of each month to the City of Los Angeles (the ?City?), which reflects accrued expenditures as of the previous month on forms provided by the City. Condition: The Organization did not comply with this requirement. Cause: The Organization did not adhere to the required filing deadlines or obtain an extension from the City and the Organization?s controls failed to prevent the instances of noncompliance. Effect: The expenditure reports were not submitted within the time frame required by the contract. Questioned Costs: None. Context: During the audit procedures over reporting, it was noted the expenditure reports for the months of December 2018 and May 2019 were submitted past the 15-day deadline. The Organization?s controls failed to prevent the late filing. Repeat finding: This is not a repeat finding. Recommendation: The Organization should implement appropriate controls to ensure timeliness of reporting or obtain an appropriate documented extension if the Organization is unable to meet the deadline. Views of responsible officials: Management has shortened the close cycle to allow the grants team additional days to generate invoices and increased accountability. Management has reinforce current controls in place to meet the deadlines and will communicate with funding agencies if an extension is needed.

2019-002 State and Public Health Actions to Prevent Diabetes, Obesity, Heart Disease and Stroke ? CFDA 93.757 Criteria: Under the funding terms and conditions of the contract paragraph 5 ? Invoices and Payments, Section C, the Organization shall submit invoices within thirty calendar days after the close of each calendar month to the County of Los Angeles (the ?County?). Condition: The Organization did not comply with this requirement. Cause: The Organization did not adhere to the required filing deadlines or obtain an extension from the County and the Organization?s controls failed to prevent the instances of noncompliance. Effect: The billing was not submitted within the time frame required by the contract. Questioned Costs: None. Context: During our audit procedures, we noted the billing for September 2018 was not submitted within thirty calendar days. The Organization?s controls failed to prevent the late filing. Repeat finding: This is not a repeat finding. Recommendations: The Organization should implement appropriate controls to ensure invoices are submitted for payment within the required time frame or obtain appropriate documented extension if the Organization is unable to meet the deadline. Views of responsible officials: Management has shortened the close cycle to allow the grants team additional days to generate invoices and increased accountability. Management has reinforced current controls in place to meet the deadlines and will communicate with funding agencies if an extension is needed.