Sneak Preview: HHS, DOI Found Lax in Issuing Management Decisions
(The following was excerpted from a recent Thompson Grants Compliance Expert article). Officials with the departments of the Interior (DOI) and Health and Human Services (HHS) explain that their agencies now have processes in place to issue timely management decisions in response to their grant recipients’ single audit findings. However, in light of a recent Government Accountability Office (GAO) report that found the agencies did not submit timely management decisions in response to audits submitted by the Federated States of Micronesia (FSM), Republic of the Marshall Islands (RMI) and Republic of Palau, the agencies agreed to review the processes surrounding issuance of these decisions to ensure they are conducted appropriately.
GAO recently reviewed 35 single audit reporting packages submitted by FSM, RMI and Palau for federal fiscal years (FY) 2015 through 2019 — the most current reports available. The U.S. has maintained compacts with FSM and RMI since 1986 and with Palau since 1994. Under the compacts and related agreements, the U.S. has annually provided millions of dollars of economic assistance to the countries through grant awards and other means.
FSM, RMI and Palau each met the $750,000 single audit threshold (§200.501) to be required to submit single audit packages for various federal award programs. Within six months after acceptance of a single audit reporting package by the Federal Audit Clearinghouse (FAC), a federal awarding agency must communicate a written management decision to the award recipient (§200.521). The management decision must clearly state, among other things, whether the audit finding is sustained and what corrective action is expected. After issuing the decision, an agency must conduct follow-up that includes monitoring the recipient’s implementation of appropriate and timely corrective action. If an agency has not issued the management decision and is not conducting follow-up two years after the recipient submitted a single audit report to the FAC, the recipient may assert that follow-up of audit findings and questioned costs is no longer warranted (§200.511(b)(3)).
GAO found DOI and HHS did not consistently issue management decisions for audit findings related to grants to FSM, RMI and Palau. During the audit period, HHS failed to issue seven out of 11 management decisions with a total amount of about $1.4 million in questioned costs during the required timeframe. DOI did not issue seven out of 12 management decisions in a timely manner with a total questioned cost amount of more than $2.04 million. For example, in March 2023, HHS issued a management decision for a 2019 single audit finding more than 21 months after the six-month deadline. Both agencies attributed the lack of timely decisions to staffing gaps experienced during the audit period.
(The full version of this story has now been made available to all for a limited time here.)
Join us for our following Thompson Grants events:
Thompson Grants Workshop: Procurement | Nov. 16, 2023 | Virtual Event
Federal Grants Forum | Dec. 6-8, 2023 | San Juan, P.R.
