Overview
The Executive Office for Administration and Finance’s (A&F’s) Federal Funds Office (FFO) did not collect all necessary supporting documentation during its desk review process. Specifically, for 1 of the 35 desk reviews in our sample, FFO could not provide us with evidence that the expenditure was incurred during the period March 1, 2020 through December 31, 2021.2
If FFO does not collect all necessary supporting documentation, then it cannot ensure that it reviews each Coronavirus Relief Fund (CvRF) Municipal Program expenditure for compliance with the Coronavirus Aid, Relief, and Economic Security Act. This could then lead the Federal government to recoup funds received through the CvRF.
Authoritative Guidance
The Office of the Comptroller of the Commonwealth’s “Sub-Recipient Monitoring Policy” states,
State departments that accept federal funds are responsible for monitoring the use of those funds, even when the grants are sub-awarded to one or more non-profit providers or other government entities (subrecipients). Even though a department does not directly expend the funds for program/grant use, the department is responsible for sufficient oversight of the award to ensure funds are spent in accordance with the federal grant requirements.
Section 601(d) of Title VI of the Social Security Act requires that CvRF payments can only cover expenses that “were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.”
Reasons for Issue
FFO did not provide a reason why it did not collect the necessary supporting documentation for the one expenditure in question.
Recommendation
FFO should collect all necessary supporting documentation from the municipalities it sampled during its desk review process.
Auditee’s Response
To mitigate risk associated with timeliness of expenditures, the Executive Office for Administration & Finance’s Federal Funds Office (“FFO”) has performed in-depth desk reviews of 108 municipalities, representing 33% of Massachusetts municipalities in receipt of Coronavirus Relief Fund (“CvRF Municipal Program”) administered through FFO. In addition, FFO completed comprehensive programmatic closing efforts, inclusive of the identified municipality, and in accordance with US Treasury guidance to close and report the CvRF Municipal Program. This review process included a review of each line-item appropriating federal funds to assess whether each expenditure funded by these line-items was reasonably related to an eligible use category.
FFO notes the Office of the State Auditor’s (“SAO”) findings and its recommendations. The CvRF Municipal Program, which was the subject of this finding, had closed. However, if a similar program is implemented in the future, FFO will be sure to establish policies that ensure that all necessary supporting documentation for each review is collected.
Auditor’s Reply
FFO notes in its response to our audit that it completed a “review of each line-item appropriating federal funds to assess whether each expenditure funded by these line-items was reasonably related to an eligible use category.” However, FFO could not provide documentation confirming that one of the expenditures was incurred during the period March 1, 2020 through December 31, 2021, as required. We believe that during its desk review process, FFO should collect and review supporting documentation (as FFO did for the other 34 desk reviews we tested) related to any grant activity taken by its subrecipients to ensure that corresponding expenditures comply with the guidelines of the grant.
We encourage FFO to ensure that it collects all necessary supporting documentation during desk reviews for similar programs as well. As part of our post-audit review process, we will be following up on this issue in the near future.
| Date published: | May 29, 2024 |
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