NATIONAL SORGHUM PRODUCERS ASSOCIATION

2025-001

Federal Agency - Department of Agriculture

Federal Program Title - Partnerships for Climate-Smart Commodities

Assistance Listing Number - 10.937

Federal Award Identification Number - NR233A750004G023

Award Period - 10/1/24 - 9/30/25

Type of Finding - Significant Deficiency in Internal Control over Compliance; Compliance, Other Matters

Condition - No monitoring policies or procedures have been implemented for NSPA's subrecipient awards, and NSPA did not include required information in the subrecipient subaward agreement. Criteria - Uniform Guidance requires all pass-through entities ensure that every subaward is clearly identified to the subrecipient as a subaward and include information to comply with Federal statutes, regulations, and the terms and conditions of the award. The required information includes the subrecipient's DUNS number, ALN and name, federal award date, and further additional requirements. When some of this information is not available, the pass-through entity shall provide the best information available to describe the Federal award. Uniform Grant Guidance requires nonfederal entities receiving Federal awards monitor the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, in compliance with compliance with Federal statutes, regulations and the terms and conditions of the subaward and the performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial reports and performance reports required by the pass–through entity and (2) following up and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on site reviews and other means. Uniform Grant Guidance requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Questioned Costs - N/A

Context - We tested subrecipient awards made by NSPA related to our audit period and determined that no monitoring procedures were performed. Additionally, out of 9 subrecipients, we identified 6 subrecipients that did not have the required information included in the subaward agreement.

Cause - This grant program and the reporting requirements were new for NSPA in fiscal year 2024. NSPA did not have effective controls in place to ensure subrecipient monitoring was complete and timely. Effect - Failure to monitor subawards may result in unauthorized uses of federal funds passed-through to subrecipients.

Recommendation - We recommend that NSPA implement policies and procedures to ensure controls are in place to properly monitor subrecipient awards.

Views of Responsible Officials - Management agrees with the finding and has developed a plan to correct the finding.

2024-001

Federal Agency - Department of Agriculture

Federal Program Title - Partnerships for Climate-Smart Commodities

Assistance Listing Number - 10.937

Federal Award Identification Number - NR233A750004G023

Award Period - 10/1/23 - 9/30/24

Type of Finding - Significant Deficiency in Internal Control over Compliance; Compliance, Other Matters

Condition - No monitoring policies or procedures have been implemented for NSPA's subrecipient awards, and NSPA did not include required information in the subrecipient subaward agreement.

Criteria - Uniform Guidance requires all pass-through entities ensure that every subaward is clearly identified to the subrecipient as a subaward and include information to comply with Federal statutes, regulations, and the terms and conditions of the award. The required information includes the subrecipient's DUNS number, ALN and name, federal award date, and further additional requirements. When some of this information is not available, the pass-through entity shall provide the best information available to describe the Federal award. Uniform Grant Guidance requires nonfederal entities receiving Federal awards monitor the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, in compliance with compliance with Federal statutes, regulations and the terms and conditions of the subaward and the performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial reports and performance reports required by the pass–through entity and (2) following up and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on site reviews and other means. Uniform Grant Guidance requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.

Questioned Costs - N/A

Context - We tested subrecipient awards made by NSPA related to our audit period and determined that no monitoring procedures were performed. Additionally, out of 9 subrecipients, we identified 6 subrecipients that did not have the required information included in the subaward agreement.

Cause - This grant program and the reporting requirements were new for NSPA in fiscal year 2024. NSPA did not have effective controls in place to ensure subrecipient monitoring was complete and timely.

Effect - Failure to monitor subawards may result in unauthorized uses of federal funds passed-through to subrecipients.

Recommendation - We recommend that NSPA implement policies and procedures to ensure controls are in place to properly monitor subrecipient awards.

Views of Responsible Officials - Management agrees with the finding and has developed a plan to correct the finding.

2024-002

Federal Agency - Department of Agriculture

Federal Program Title - Partnerships for Climate-Smart Commodities

Assistance Listing Number - 10.937

Federal Award Identification Number - NR233A750004G023

Award Period - 10/1/23 - 9/30/24

Type of Finding - Significant Deficiency in Internal Control over Compliance; Compliance, Other Matters

Condition - NSPA does not have adequate procedures in place regarding timesheets and allocation of payroll costs to ensure USDA federal funds were not spent on disallowed costs.

Criteria - Uniform Guidance requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to ensure compliance with federal laws, regulations, and program compliance requirements. Expenditures of federal awards should be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles.

Questioned Costs - N/A

Context - During testing, we were unable to locate timesheets to determine appropriate allocation of time spent towards the federal award. Additionally, payroll allocations could not be verified back to the budget submitted for the federal award.

Cause - NSPA does not have an effective controls in place to ensure payroll transactions are properly coded between federal and nonfederal funds.

Effect - Failure to properly record federal and nonfederal funds may result in inaccurate reporting of disallowed costs on the Schedule of Expenditures of Federal Awards.

Recommendation - We recommend that NSPA implement policies and procedures to ensure controls are in place to properly allocate payroll costs to federal awards.

Views of Responsible Officials - Management agrees with the finding and has developed a plan to correct the finding.